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Everyone who loves the Mac can't help but be concerned with the barely 3% market share held by Apple. Apple's share of the consumer pie is shrinking even as its installed base increases. It is a game of numbers that Apple may be beginning to lose. Perhaps Apple should consider doing some of those things consumers have been demanding for years.

When Steve Jobs effectively took over Apple in 1998, the company stood at around 5%. Slowly, Apple is being squeezed from all sides and is slipping to frighteningly low market share levels. Sure, you could argue that by volume a 3% market share today is as large as a 10-15% market share in 1992, but that is of little comfort. The computer market pie might be much larger today than in 1992, but a company that doesn't grow must either become a producer of niche products for the rich or go out of business. Ferrari and Jaguar make good analogies. To stay in the middle or upper-middle markets, Apple might try the following strategies:

Reduce Gross Profit

Unfortunately, the company with some of the highest gross margins in the industry will have to take a hit and lower prices. Dell, Compaq, and Gateway routinely sell their previous year's stock for $599 or $699. Their newest, latest, greatest Windows boxes that have the fastest Pentium processors, the largest hard drives, and the best video cards are priced at about the same level as Apple's newest offerings. Unfortunately for Apple, most people are perfectly happy with having last year's model for a deep discount. Couple that with a $150 rebate for signing up to a year of MSN, well, you begin to see my point. I am willing to bet that because Apple doesn't compete in the ultra low end market that the company will never be the majority producer. Even so, I am equally convinced that with a not unsubstantial drop in Apple's prices, enough people will be wooed by the superior platform, aggressively priced.

New Look

Don't get me wrong, I like the frosted white look of the iMac, eMac, and iBook, but surely, they can come up with something more dazzling. Although brushed metal works great for the PowerBooks, it really wouldn't work for the desktop models. Why not go for a metallic blue, metallic red, metallic green, or bronze look. Instead of painting the inside casing of the iMac in white, why not try a metallic color. Apple has never tried this one before. Metallic paint is great and would definitely lend a freshness so lacking in the plain-old white Macs.

Low Cost Mac

Apple really needs a low cost, bare desktop unit. The buyer could build it up as he sees fit. I simply cannot understand why Apple doesn't exploit this market. People that buy iMacs are not inclined to buy stripped-down bare desktop units. LC sales would not cannibalize iMac sales. Remember, Apple is losing market share under its current product scheme. Something has to be done. Apple should have plenty of last year's boards to use. They could offer a decent LC box with an older Mac board priced at a huge savings over a brand new Power Macintosh. This would definitely increase overall sales.

New Upgrade Policy

Everyone knows Apple's upgrade policy stinks. Why do people try to defend it? We pay the highest upfront cost to buy a Macintosh and now Apple wants $129 for every major OS upgrade. If a customer decides he wants to sign up for a dotmac account, the price increases by another $100 a year. Mac users must fork out $229 a year just to stay current with the whole Apple experience. You could decide not to get dotmac and miss out on a great (albeit expensive) online experience. You could also decide not to update regularly and miss out on Apple's new freeware iApps, which for some reason will only work with the newest released version of its OS. Apple should reward loyalty. Buyers of previous OS's should be given a deep discount, within reasonable time limits. It is ridiculous to charge people who purchased a previous OS or new Macintosh computer $129 to upgrade in the same year as the previous purchase. Maybe Apple should set up a subscription service of say $10 a month. This would entitle the subscriber to dotmac and all compatible, major OS upgrades. The current system doesn't reward loyalty.

Apple should look into ways to improve their business model. They cannot afford to keep going under their current plan. It is just not working. I'll use a Mac as long as there is an Apple. Hopefully, that will be for the rest of my life.

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