Leopard Sets Operating System Sales Records For Apple - InformationWeek

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Leopard Sets Operating System Sales Records For Apple

In the first full month of sales, Mac OS X 10.5 raked in 32.8% more money than its predecessor, according to The NPD Group.

Apple's launch of Leopard in late October was the company's best introduction ever of a Mac operating system, an indication that the computer maker's share of the PC market is growing steadily, a market research firm said Tuesday.

In the first full month of sales, Leopard, officially called Mac OS X 10.5, raked in 32.8% more money than its predecessor Tiger, OS X 10.4, according to The NPD Group. Tiger had outsold all previous versions of the OS when it was launched in late April 2005.

In terms of unit sales, Apple moved 20.5% more copies of Leopard than Tiger, NPD said. The research firm based its findings on point-of-sale data provided by almost 50 U.S. retailers, including Apple. Besides brick-and-mortar operations like Best Buy, Office Depot, and Target, the pool of retailers also included Web sites like Amazon.com, Buy.com, and NewEgg.com. All the sales counted were for standalone versions of the OS, and did not include versions of the software shipping with Macs.

In outselling Tiger, Leopard ran past older versions of the OS, including Panther (OS X 10.3), and Jaguar (OS X 10.2). The Tiger launch outsold Panther and Jaguar in terms of units by 30% and 100%, respectively. "You're seeing Apple move the needle when it comes to growing its installed base," NPD analyst Chris Swenson, told InformationWeek.

Worldwide, Apple's share of the PC market remains at less than 5% because the company does not have retail partners or stores in many countries, Swenson said. But in areas where the company is strong, Apple is increasing market share. In terms of units, Apple desktops and notebooks in September accounted for 12.2% of all indirect U.S. sales, which means sales in online and offline stores, according to NPD. In January 2006, that number was 6.56%.

If one considers only premium PCs, which NPD defines as those costing more than $1,000, Apple accounted for 57.53% of shipments in September, compared to 17.91% in January 2006. Therefore, Apple in September accounted for 22.9% of dollars spent on PCs in U.S. stores. "Apple is really on fire lately," Swenson said. "And it's spilling over on to the software market."

In 2006, for example, 18.2% of software sold in the U.S. could run on the Mac. In 2003, the number was 11%, according to NPD. Fully 20% of Microsoft Office sales from U.S. retailers are for the Mac.

The success of Leopard can be attributed, in part, to launching the software in November, which along with December are the biggest months of the year for consumer shopping. In addition, Leopard was helped by the rapid growth in the number of Apple retail stores. Since Tiger, Apple has roughly doubled the number of stores. "With every new OS outperforming previous versions, it's clear that Apple has hit upon the right strategy for rolling out new versions of its OS," Swenson said.

Apple has also been successful in selling Leopard "family packs," which are basically five copies of the OS for the price of two. Fully 32.8% of Leopard unit sales in the first month were of the family pack version, compared to 20.4% for Tiger. By comparison, family packs accounted for 9% of Panther unit sales and 5% of Jaguar sales. "Windows people are buying Macs, and existing Mac users are increasing the number of Macs in their households," Swenson said.

The success in selling family packs boosted the average selling price of Leopard to $144.30 in November, compared to $128.50 in May 2007 for Tiger, NPD said. Also contributing to the rise in ASPs was the small number of retailers offering rebates or discounts on the OS during the launch.

One thing Apple did differently in launching Leopard was dropping what the company called its "Free Human With Purchase" promotion that Apple offered with Tiger. The promotion included a free installation of Tiger if it was purchased at an Apple retail store, or a free hour-long training session on how to use the OS.

"I'm guessing that Apple calculated that it would simply be too cost prohibitive to offer a similar promotion for Leopard," Swenson said. Also, Apple ships a "migration assistant" with the Mac OS that makes upgrades far easier than in the past. Microsoft offers a similar utility in Vista.

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