The Mac 'Seems to Defy the Laws of Economics' [Charts]

The Mac 'seems to defy the laws of economics', says Needham's Charlie Wolf. Apple's computers cost more than its competitors at an average $700 but its market share has grown in 10 out of the last 11 years.

"The only explanation that we see," writes Wolf, "is the now-mythical halo effect. Beginning with the iPod in the middle of the past decade and then extending to the iPhone and iPad, a meaningful number of Windows users who bought these products seem to have switched from a PC to a Mac... What should be underscored is how unique the Mac phenomenon is. Indeed, it's the only situation we've encountered where shifts in the demand curve completely swamped movements along the curve itself. In the face of rising relative prices, we view the Mac's success as the rare instance where sales increased in the face of rising prices."

This same situation does not apply to the iPhone; however, Wolf says this may have more to do with geography and carrier business models than the belief that screen size is a major factor.


"The iPhone's loss of worldwide market share," he writes, "chiefly reflects the shift in smartphone market share from developed, postpaid markets to emerging, prepaid markets. This shift was not driven by a change in consumer behavior but rather by rapidly falling prices of smartphones, especially in Asia Pacific, which induced feature phone users to switch to smartphones. We calculate that the iPhone's share of the smartphone market would be over ten percentage points higher were it not for the migration of smartphone sales from developed to emerging regions."

Take a look at the charts below for more details...

[via Fortune]