Why Market Share is an even more worthless metric than you think

Great article on Roughly Drafted.com about how "Market Share" gets distorted to make brands look good, rather than getting used as any sort of meaningful yardstick. In this case, how it is used by Microsoft to massage it's numbers, rather than identify real opportunities or problems:

Analysts and reporters like to talk about market share statistics, but the conclusions they draw are often misleading. Here's a look at how those numbers are used to paint grossly inaccurate portrayals of the market share of the Zune among iPods, and alternatively the Mac among PCs.

Market share simply refers to the portion of a vendor’s unit sales compared to the overall market. However, most large markets include specialized niches that each act as a market. For example, within the overall market for vehicles are passenger cars, and buried within that major segment is the small but profitable luxury car market.

BMW doesn't compete against ship and plane builders, nor even the entire line of cars built by GM. It would therefore be absurd to talk about BMW's small share of the "vehicle market," or even to compare its market share among other car makers. It's simply pointless and irrelevant.


Why is market share so important in the PC world, particularly for Apple?

The Slippery Numbers of Market Share
Microsoft-enamored analysts have long been titillated to report Apple's small Mac market share in comparison to all PCs sold worldwide.

They are not as quick to mention that the definition of “the PC market” ballooned as PCs makers pushed into markets unrelated to Apple's business, resulting in a commensurate decrease of Apple's share as the overall PC market rapidly expanded into unrelated directions.

By referring to Apple at every opportunity as having "less than a 3% share of the market," it enables them to casually suggest that a $77 billion company with the world's hottest consumer brand is really just of little consequence.

Just read the whole thing!

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