Power of Market Share

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Power of Market Share
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     People are asking a question about last month's issue  -- if Apple did well on the iPod, why isn't the Mac doing well on the PC market? So, here's why.
 
History
     When IBM and Apple were fighting over the desktop computer market, Mac had a GUI (Graphical User Interface) and mouse; however, a limited number of software ran on the Mac. On the other hand, IBM computer had classic command line interface (running MS-DOS; IBM called it PC-DOS), but there was tons of software for MS-DOS. Even though Mac's GUI was "insanely beautiful," with limited number of software, Mac was less useful. So, people opted to IBM computers.
 
     Then, without IBM's participation or approval, Compaq started selling so-called "IBM PC compatible" computers. And they chose MS-DOS for OS. As other companies followed Compaq, MS-DOS was gaining market share. This led Microsoft to success.
 
The Power
     Marketing text books teach us that once a business acquires 50% market share, no one can beat that business unless they do extremely stupid things. If 50% is that good, acquiring more than 90% of the market share makes Microsoft invincible. In fact, the US government failed to split Microsoft due to alleged violation of anti-trust law. Even though Apple's "Switch to Mac" campaign is good, it cannot do too much. For the same reason, since iPod has gotten more than 50% of the market share, Zune (Microsoft's portable music player) won't win over iPod.
 
© January, 2008
 
 
    

 
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