Who You Callin' 'Super-Small-Market Share Guy,' Bill?

Because they’re the super-small-market share guy, they get all these statements about them.”

–Microsoft Chairman Bill Gates, 2005

Much has been said of the iPod’s “halo effect”–the notion that the device has so enhanced perceptions of the Apple brand that consumers are migrating over to its Macintosh platform. And analysts routinely cite it as a reason for bolstering their outlook for the company, despite its relatively paltry share of the global computer market. And for good reason.

The iPod “halo effect” is indeed having a hell of an effect on Apple’s global market share. According to Bernstein Research analyst Toni Sacconaghi Jr., Apple’s global PC market share has risen in 10 of the last 11 quarters. What’s more, the company has managed to claim a remarkable 29% share of the U.S. laptop market top fifth, or quintile, of the U.S. laptop market.

An impressive achievement. But one not without its downside. Apple, as it so often does, is playing in the high-end market here, one without much room for growth. “Accordingly,” says Sacconaghi, “we believe Apple faces a trade-off in its Mac business over the next two to three years: either lower price (and margin percentage) to sustain share gains, or retain its current price premiums and face slowing unit growth.”