In January I noted that there were more iPads sold by Apple than PCs from HP, the largest PC vendor in the fourth quarter. Including all tablets, this is the distribution of market shares by units shipped.
Note the different color palettes for Windows and non-Windows.
By the metric of tablets+PC's Apple appears to be the leading vendor. However, if we consider only the Mac, Apple is still well behind. The historic unit volumes of the two is shown below:
Although Apple has nearly doubled its shipment volumes since 2008, it's still only one third that of HP. In addition to comparing volumes, we can also measure profitability. In this case HP's PSG (Personal Systems Group) reports operating profits and we can estimate the same from Apple based on a gross margin estimate and an operating expense estimate (as percent of sales).
The comparison looks like this:
The operating profit for Apple is 2.7 times higher from a third the units. This gap is a result of a vast difference in profitability. HP's operating margin for PCs is 5% while Apple's is 21%.
A few days ago I highlighted that Apple's iPhone yields disproportionate profits because of the way it performs the jobs its hired to do by consumers and operators.
With the Mac the story is that Apple's OS X is primarily responsible for delivering quadruple hardware margins vis-a-vis the most successful PC vendor.
Both iPhones and Macs are sold as hardware products and the entire econometric analysis of Apple depends on hardware cost structures. This is because hardware lends itself to easy measurement. However, a casual observer would be stumped by a comparison with competitors which cannot come near the profitability Apple enjoys. How can the same bundle of components (admittedly mostly off-the-shelf) be sold at triple the margins?
It comes down to software. Apple has a monopoly on iOS and OS X and charges for it through its hardware. That's a very valuable monopoly. It's worth at least $1 billion per quarter.
Last week I made an attempt to measure the iPhone's manufacturing cost given new data points from the Foxconn field trip. The post generated a great amount of new knowledge and the feedback was very valuable.
The main value to me came from stepping back and looking at the entire cost and value structure for the iPhone. Putting costs into perspective is as valuable as knowing what they are.
The following diagram shows my estimates for this cost structure for the fourth quarter given both bill of materials estimates and the other parts of the cost of goods sold and operational expenses and even ancillary sources of revenue.
There are several observations easily made from this view:
The manufacturing cost ($15 may be very generous i.e. high) but it still amounts to a tiny fraction of the device cost and hence value-add. The direct labor part of that cost is tinier still.
Depreciation on capital equipment (Apple owned) amounts to $10 per device, probably higher than the direct labor cost.
External developers as a group receive more app income than the salaries and costs associated with Apple's own developers working on the product.
The gross margin percent is 58%.
The operating margin is estimated at 51%
The high margin that the product generates is even more surprising given the industry average as seen in this summary view of the industry's performance over three years' fourth quarters.
The operating margin is the ratio of solid colors to the entire bar.
As someone pointed out on twitter: one of these is not like the others.
The question should be: How is this possible? What does this product have that gives it such a pricing advantage? Note the the ratio was preserved through the three years shown and has persisted for nearly five years.
The answer to this paradox is in data that is not visible in any of the diagrams above: The largest revenue attached to the iPhone comes into the mobile network operators. We don't have global averages but the revenue the iPhone generates over its lifetime is probably two to three times the revenues that Apple directly receives. The ARPU iPhones are attached to allows for a substantial subsidy, but more importantly, loyalty (or churn)
As seen in the small but clearly visible US market, being an operator having iPhone exclusivity generates above-average growth and being the only operator to be excluded from the product generates above average subscriber losses.
It quickly becomes obvious that ranging the iPhone has moved from being an advantage to not doing so becoming a serious disadvantage. The product and its high up-front costs are "hygiene factors" for operators. The sine qua non status means that it can still be priced with the extraordinary built-in margin shown above.
The global mobile OS market shares for Q4 shows a continuing (but diminished) leading share.
At the end of last year Android's unit share reached 51% which is down from about 57% during the third quarter. iOS reached 23%, followed by Symbian at 12%, RIM at 9%, Bada at 2.4%, Windows Phone at 1.6% and Other at 1%.
When seen on a year/year basis Android gained 18 points of share in Q4 while Symbian lost 18 points. iOS gained 6 points of share and RIM lost 6 points. Bada gained 2.5 points and Windows lost 1.5 points.
This symmetry can also be observed in another set of data. Published in The Guardian Kantar Worldpanel ComTech data shows the OS share changes for January on a year/year basis for a select set of countries.
Android share gains do seem to be mirrored by Symbian share losses on a country-level.
This should be most interesting to Nokia and Microsoft as both have a lot riding on Windows Phone replacing Symbian sales. If there should be a recovery in the fortunes of these companies, it would seem that their strategies should focus primarily on stemming and then reversing the losses to Android.
Microsoft's strategy of increasing the cost structure for Android through IP licensing is certainly part of this picture but it's a slow process to turn that disincentive for Android into a large incentive for Windows Phone.
Indeed, the speed with which Android handsets can be developed seems to be a key value of that operating system and one for which Microsoft does not have a good answer. Nokia is now one year into its commitment to the Microsoft platform and it has a very limited portfolio to show for it (and limited sales as well.) As a result, Nokia's Symbian business evaporated very rapidly. More rapidly than the company anticipated.
The dilemma for other vendors may well be how long will it take for them to develop a replacement for their Android portfolio in Windows Phone.
The opportunity cost of this switch is subtle and insidious but may be the root of why we don't see a stampede toward Microsoft. Conversely, Android contract-free, implement-at-will availability may be its greatest selling point.
This 55 is something no one would have guessed. Including us. To put it in context, it took us 22 years to sell 55 million Macs. It took us about 5 years to sell 22 million iPods, and it took us about 3 years to sell that many iPhones. And so, this thing is, as you said, it's on a trajectory that's off the charts.
That gave me an idea. Here is a plot of each major computing product Apple sold throughout its history shown as a cumulative total since product launch.
The iOS platform as a whole reached 316 million cumulative units at the end of last year. The iOS platform overtook the OS X platform in under four years and more iOS devices were sold in 2011 (156 million) than all the Macs ever sold (122 million).
It's perhaps fitting that an industry that produces illusions is in itself an illusion. The absence of public scrutiny of its finances and business model leads to a lot of myths or misconceptions. Some of these are discussed anecdotally in books and other works[1], but the absence of data makes the anecdotal evidence unsatisfying to an analyst.
What if we could find patterns in data about the industry to confirm or deny these oral histories? Fortunately some data actually exists. There are collections of data about movies released and some of the attributes of these releases such as box office receipts, theaters opening, budgets (sparsely), and distributors. This data is typically used for marketing purposes to celebrate the "hits" and thus entice more people to see the movies.
However, other information can also be obtained through analysis of the data. In fact, a rather compelling story can be told. That's the purpose of this post. Our story will be expanded over time but this first draft should be enough to allow a discussion to begin. The story is built in four sub-stories:
Drama / Comedy vs. Adventure / Fantasy: Why the Ancient Greeks had it all wrong.
The magic of summertime: Market access and school schedules
The perpetual incumbency: What happens to Hollywood startups
The Popcorn economy: The peculiar power of theaters in an age of television
These stories were the result of observations in data alone. We have no first-hand knowledge of the industry and have only used basic software tools to seek out patterns in public data[1].
The data set includes approximately 12,000 titles released between 1975 and present with various degree of completeness. Some of these years are not completely populated and some data is undoubtedly in error. However the large sample should offer enough substance for patterns to emerge in spite of this.
Drama / Comedy vs. Adventure / Fantasy: Why the Ancient Greeks had it all wrong
Storytelling has not changed throughout history. The same types of stories affect audiences the same way since stories were first told. The earliest known "genres" were tragedy and comedy and they are still seen as the bedrock of theater today. The same is true for movies. The following bar chart shows the distribution of genres as cited by movies over our data set.
Drama and comedy are about 50% of all movies made. If we add romance they are 60% of cited genres. This is understandable given the history of theater. However the profitability (or revenue potential) of those genres is not as strong as Action, Adventure and Fantasy. The following chart shows the same count of genre citation but only for movies grossing over $200 million (which we chose to call "blockbusters").
Action, adventure and fantasy handily beat Comedy and even SciFi beats drama. Romance, musicals and and mystery genres typically associated with female audiences are very rarely successful as blockbusters. The overall data is shown in the following table. The rows represent gross revenues and the columns genres cited ranked in order of frequency. One can easily observe the density of low earning drama and comedy (grey colored) vs. the more lucrative instances of fantasy and adventure. These male-dominated genres have consistent success into middle, high and very high revenue tiers.
The reason for this blockbuster attention to action and adventure is probably the prevailing theater-going audience demographic: adolescent males. The industry still produces the classic genres but less profitably than what the current targeted markets.
Indeed, these genres were very uncommon in eras predating the late 1970s. More "adult-oriented" movies like romance (Gone with the Wind), musicals (The Sound of Music) and epic movies (Ben Hur, The Ten Comandments) were common in the "golden age" of Hollywood. As we'll see in the next section, the age of the audience is a now driving more than just genre selection.
The magic of summertime: Market access and school schedules
Using the word "Summer" before "Blockbuster" has become almost redundant. What is less understood is that watching movies in the summer is rather a new idea. It started effectively with Jaws in 1975 and ever since major film studios have planned their annual marketing around a summer schedule. There is clear evidence for this in the data. Here is a table showing the blockbuster release months since 1975. (The number of titles grossing over $200 million and the months in which they were released).
The same pattern repeats for the next tier of highly successful movies--those grossing between $100 and $200 million.
But what about the less successful movies? Those earning less than $50 million actually show a counter-success pattern.
To contrast this further, here is a stacked bar chart comparison between frequency of release by month for the most successful tier vs. the least successful tier (colors represent years with oldest at the bottom).
It would seem that summer and success are in a causal relationship. There is a clear pattern with the only non-summer months having blockbuster releases being November and December.
But there is more to this pattern.
The blockbuster schedule happens to coincide with the school holiday schedule in the US. This again points to the "profitable" audience being school-age children, and mostly male.
The perpetual incumbency: Where are the Hollywood startups?
The third observation has to do with the major film studios. We took the box office revenues and allocated them to the studios over time. The following chart shows the share of those revenues for the top 30 studios.
The top five were earning 64% of revenues in 1975 and the top five were earning 60% in 2011. One of the top five from 1975 is no longer in the running this year (MGM) and one new major was added (Buena Vista, owned by Disney).
There has been one other notable change: Columbia was acquired by Sony but stayed out of the top 5. Beside Disney there is one new significant entrant in Dreamworks gaining share in the last decade.
But the prevailing impression from the data is that the incumbents remained as such during the last four decades. There are many small studios but they have not "disrupted" the market by shifting significant revenues out of the hands of the majors. Indeed the typical strategy seems to be to start a studio with the hope of it being acquired by a major.
Even the entrants are industry insiders: Disney and Dreamworks are not asymmetric in their business models in any way. In fact, when viewing the data by blockbuster creation, the majors feature prominently. There are only a handful of blockbusters from the smaller companies.
When looking at overall production rates, again the majors (and their subsidiaries) dominate. Here are the top 75 distributors of movies showing nearly 9000 movies (click image for full-size):
The conclusion from this data might be that Hollywood does not change all that much in terms of who makes the money. But that itself is a symptom of a deeper reality: that there is little that changes at all.
We can even perhaps hypothesize that there is no business model innovation taking place. Any such innovation is usually manifested in a reversal of fortunes for incumbents.
But technological change is happening. The following section describes how this appears in the data.
The Popcorn economy: The peculiar power of theaters in an age of television
The data we are sampling (box office gross revenues) is actually a small and shrinking subset of what movies generate. In addition, there are international revenues, media sales (DVD, video tape), TV rights, and merchandise to name a few. But theaters are still an important part of the picture.
Although they make up less than 20% of gross, their importance is disproportionate due to the signal they send other markets about the popularity of a movie. In other words, a movie must first be proven in a US theater before its value is priced by the other channels.
However, this essential theatrical release has changed in one fundamental way. Releases are now geared for larger initial scopes with shorter runs and less dependency on "word of mouth" to increase sales.
Consider the following view of release breadth (how many theaters are in an opening) by openings over time. The columns represent the number of theaters used in the opening of a movie in increments of 100. The rows are years. The cells contain the number of movies opening with that size footprint.
The pattern shows the number of theaters used in openings increasing steadily. the mean number of releases is shifting to the right. Part of the reason is that theaters shrank in size over time, but there is also the factor of needing to create a large audience at the outset of a release. The increase in "footprint" at launch (a factor of 10) is in excess of the slicing of theater sizes (a factor of two)
This broadening of launch is coincident with a decrease in viewers. As a result the notion of how movies are marketed has changed. The idea that a movie could start small and gain a following gradually through word of mouth is obsolete. That low cost approach to marketing (called "earned media exposure" in marketing) is unreliable and completely discounted.
Instead, studios manufacture an audience through paid advertising and promotion. This initial burst of viewers is essential not just for generating revenues. It's essential to driving long-term revenues.
The reason is that technology now allows the movie to be "monetized" through multiple channels. Recorded media, broadcast rights and even in-flight entertainment are all there to milk a franchise. But there is a need to get that initial vote of confidence from one crucial audience. That happens to come only from theatrical release.
So with the scheduling pressures, the narrow window of purchased release buzz, the onus is on a broad release as quickly as possible. This holds especially true if we filter out only the blockbusters. Note how the release has increased steadily as well and that since 2000 all blockbusters released to over 3000 theaters. Compare that to Star Wars in 1977 releasing to only 30 theaters.
Data sources: Coolector, Imdb, BoxOfficeMojo, The-numbers.com
Many thanks to David McCandless and the Information is Beautiful folks (http://www.informationisbeautiful.net) for setting up the Hollywood Budgets Award that provided us with much motivation for researching this topic.
Apple retained its top rank in profitability and regained the top spot in mobile phone revenues.
The relative shares of revenues and profits are shown below:
Individually, Apple's share of units, revenues and profits is chronicled below:
Apple reached 75% of profit share, nearly 40% of revenue share and 9% of units share.
Apple and Samsung combined for about 91% of profits with RIM third at 3.7%, HTC fourth at 3.0% and Nokia last at 1.8% of a $15 billion total for the quarter.
In terms of revenues, Apple had 39% to Samsung's 25%. Third was Nokia with 12.6% and fourth RIM at 8%. HTC only managed 5.5%, Motorola 4%, LG 3.3% and Sony Ericsson 2.7%.
In a previous series of articles we discussed the capital Apple expends on equipment, real estate, leasehold improvements and data centers. Cost structure analysis reveals subtle shifts in strategy and the CapEx analysis demonstrates Apple's increasing integration into its supplier network and integration into the distribution and service infrastructure that sustains its ecosystems.
Another form of investing (spending now, reaping benefits later) is the spending on research and development (R&D). Let’s have a look at Apple’s R&D expenses by quarter since Q1/2006.
Apples R&D expenses as percentage of sales have been declining from almost 4% to close to 2% in the last six years as shown in the following chart:
While Apple's absolute R&D expenses have grown at an annual rate of 33% they have not kept up with the far higher sales growth rate. Apple's current rate of R&D expenditure is compared to a peer group [1] below.
Apple's R&D/sales ratio is between Dell and HP, companies which do not develop their own software or hardware.
Beside the absolute, relative to sales and relative to peers, another perspective is to measure relative growth. The following chart represents shows the 5 year average growth of R&D expenses and on the y-axis the size of last 12 months R&D expenses as a multiple of Apple's R&D costs [2].
Acer's R&D expenses for example are almost non-existent compared to Apple, but have grown almost 100% per year while Microsoft’s last 12 months R&D expenses are almost 4x that of Apple's and have only grown slightly over the past five years. Google's R&D costs have grown at a similar rate compared to Apple, but remained double those of Apple’s throughout the last five years.
Finally, we should look at the payoff from R&D spending over the last five years. R&D growth should result in margin improvement, but does it? The following chart shows the relationship between spending (size of bubble), margin improvement (x-axis) and sales growth (y-axis).
Of our sample, only three companies have achieved sales growth AND simultaneous margin improvement over the last five years. But while Microsoft and Dell have achieved sales growth and margin improvement slightly above zero, Apple has improved its bottom line by 13 percentage points and its top line by an average rate of 45%.
In spite of Microsoft's, Google and Nokia's massive R&D growth, their returns from that investment have been meagre to negative in terms of margin and only Google showed appreciable sales growth.
Discussion
R&D expenditures on a stand-alone basis, in absolute or relative terms, do not correlate with disruptive growth. Essentially, you cannot buy innovation.
In fact, sometimes it's nearly free. Most startups spend less on R&D than large companies do on stationery and yet the bulk of wealth creation has come from these tiny companies. The challenge is, in fact, that if you have resources you find ways of spending them (the quaint American cliche of 'cash burning a hole in your pocket'). The temptation is always there to fund a new initiative which bright people can always envision.
Leadership in innovation is not the courage to spend but the courage to focus.
“Focus is about saying 'No'. And the result of that focus is going to be some really great products where the total is much greater than the sum of the parts.”, Steve Jobs (1997)
[1] Our set of peer companies as shown in previous posts but excluding LG, Lenovo and Motorola Mobility due to lack of data, but including Sony Ericsson and Nokia’s mobile phone division Devices & Services.
[2] In this post “year” and “last 12 months” refers to the time frame from Q4/(year-1) year to Q3/year due to lack of published data regarding Q4/2011. Five year data runs from Q3/2006-Q3/2011.
[3] A note on capitalized R&D: Most of the companies analyzed do not have capitalized R&D costs. Some have small capitalization, but so small that the inclusion would not change the decimal points of percentages. The only significant amount of capitalized R&D appeared in Amazon's earnings releases: capitalized R&D cost were USD 100 million in Q3/2011. The amortization of theses costs in included in Amazon's EBIT (Operating imcome).
The iPad and Mac businesses both grew well in the last quarter. Tim Cook said they are observing some cannibalization of Mac from the iPad but much more switching to iPad is coming from the Windows PC market.
The evidence is still hard to pin down directly but the fact that PC sales (excluding the Mac) are down gives credence to the claim. Mac growth, in contrast, is largely unaffected. The following chart shows the the iPad volumes vis-a-vis Mac volumes and the Mac growth through recent history.
The iPad has out-sold the Mac since inception and is now about three times the volume. However, the growth rate in the Mac has not changed much.
The impact on the PC market has been discussed recently and the data in the following chart is an update given more precision on the units from Apple:
The new data shows that the iPad alone would be the largest PC vendor and Apple with iPad and Mac combined is selling 5 million more units (or 30%) than the top PC vendor.
The impact of the iPad is not specific to any single vendor (Apple included). It competes for time and purchase decisions across all computing alternatives and though many times it's additive, it is also substitutive and will become increasingly so.
Tim Cook mentioned on the earnings conference call that Apple sees the iPad as addressing a market larger that the PC market:
I truly believe, and many others in the company believe, that there will come a day that the tablet market in units is larger than the PC market. In fact, it's interesting to note that in the U.S., it's clear from the IDC's recent data on desktop PCs in the U.S., that tablets exceeded desktop PC sales last quarter in the U.S.
Yesterday's post described the history of personal computing platforms over the past 37 years. It showed a distinct shifting of "eras" between traditional personal computing and the emergent mobile computing represented by device-based platforms.
Underlying these lives (and deaths) of platforms were the growth (and decline) of fortunes of companies and people. I hoped that by observing these patterns insight could be gained into the conditions for success or failure.
The following graph shows the companies which were predominant (in the top five ranking by shipments[1]) during each year of the industry's history and the volumes they were able to obtain during that period. I also added Nokia and RIM as examples of the challengers coming from mobile devices.
It's a difficult graph to interpret. The pattern I observed was that most companies were not able to sustain presence in the top five ranking for long. Indeed, regardless of having one's own platform or being a licensee, companies seemed to fade reliably. Some were acquired, some sold their operations but there is a distinct impermanence to their prosperity.
To sharpen this perspective of longevity I indexed each company to the point when they entered the "prosperity zone" and measured their staying power within it. The following graph shows these indexed lives.
Apart from Apple, IBM remained in the business the longest (24 years). Compaq was second with 20 years before being bought by HP. HP and Dell are still operating after 15 years, having tied Atari and Commodore. After these ancients, the upstarts Nokia and RIM are struggling to remain relevant after 10 to 12 years.
Then there are the transients like Packard-Bell/NEC, Toshiba, Radio Shack and Fujitsu which lasted less than 10 years. The newest PC companies are all from China or Taiwan: Acer, Asus and Lenovo. Their longevity cannot be called yet though Acer seems to be in decline. Lenovo, which took over IBM's brands continues to grow. However, as yesterday's post showed, without diversification into devices, pure PC makers are likely to fade.
But besides this interesting history lesson, there is a deeper, unsettling observation. The scale of these periods of prosperity is far shorter than the average person's career. Indeed, the entire time span of the study is 35 years, about the time an average person will be employed. All the companies failed to maintain prosperity over this time frame.
These are a small sample, flawed by showing only hardware units, but I consider it a proxy for the overall technology market. Software-only or services companies have had no better records.
The implications for company managers and workers is profound. Chances are that the business you work for will not prosper for more than a decade and will reward you for an even shorter period. Similarly, as witnessed by the P/E ratios, investors have given up on this industry as one with any quality of earnings.
There is no "rule" that this has to be so. The high mortality rate and short longevity of technology companies is a consequence of a failure to manage innovation and disruption. Apple may be an exception--one I think worth studying. Though not always prosperous, it has managed to survive, being the only company from the early era of personal computing to still be operating in the industry. Indeed, it's now the most prosperous. Maybe it's a fluke, but I rather think it's due to an ability to re-define itself as the market shifts. Its essential quality being an ability to disrupt itself.
And if we think about it this way, ultimately, longevity is more important than prosperity. Without patience there is nothing but chance determining prosperity. The fate of more than company finances rests in the balance.
Notes:
Apple did not maintain a position in the top 5 throughout this period but is shown as a benchmark as it remained in the same business throughout this period.
Thanks to Jeremy Reimer I was able to create the following view into the history of computer platforms.
I added data from the smartphone industry, Apple and updated the PC industry figures with those from Gartner. Note the log scale.
The same information is available as an animation in the following video (Music by Nora Tagle):
httpv://www.youtube.com/watch?v=8h-C6u4yLj4
This data combines several "categories" of products and is not complete in that not all mobile phone platforms are represented. However, the zooming out offers several possible observations into the state of the "personal computing" world as of today.
We cannot consider the iPad as a "niche". The absolute volume of units sold after less than two years is enough to place it within an order of magnitude of all PCs sold. We can also observe that it has a higher trajectory than the iPhone which became a disruptive force in itself. Compare these challengers to NeXT in 1991.
The "entrants" into personal computing, the iPad, iPhone and Android, have a combined volume that is higher than the PCs sold in the same period (358 million estimated iOS+Android vs. 336 million PCs excluding Macs in 2011.) The growth rate and the scale itself combine to make the entrants impossible to ignore.
There is a distinct grouping of platform options into three phases or eras. The first lasting from 1975 to 1991 was an era of rapid growth but also of multiple standards and experiments. It was typical of an industry in emergence. The personalization of computing brought about a new set of entrants. The second phase lasted between 1991 and 2007 and was characterized by a near monopoly of Microsoft, but, crucially one alternative platform did survive. The third phase can be seen as starting five years ago with the emergence of the iPhone and its derivatives. It has similarities to the first phase.
We can also look at the data through a slightly different view: market share. Share is a bit more subjective because we need to combine products in ways that are considered comparable (or competing).
First, this is a "traditionalist" view of the PC market as defined by Gartner and IDC, and excluding tablets and smartphones.
This view would imply that the PC market is not changing in any substantial way. Although the Mac platform is gaining share, there is no significant erosion in the power of the incumbent.
Second, is a view where the iPad is added to the traditionalist view.
This view is more alarming. Given the first chart, in order for the iPad to be significant, it would need to be "visible" for a market that already ships over 350 million units. And there it is. If counted, the iPad begins to show the first disruption in the status quo since 1991.
The third view is with the addition of iPhone and Android.
This last view corresponds to the data in the first graph (line chart). If iOS and Android are added as potential substitutions for personal computing, the share of PCs suddenly collapses to less than 50%. It also suggests much more collapse to come.
I will concede that this last view is extremist. It does not reflect a competition that exists in real life. However, I put this data together to show a historic pattern. Sometimes extremism is a better point of view than conservatism. Ignoring this view is very harmful as these not-good-enough computers will surely get better. A competitor that has no strategy to deal with this shift is likely to suffer the fate of those companies in the left side of the chart. Treating the first share chart as reality is surely much more dangerous than contemplating the third.
I've used anecdotes in the past to tell the story of the disruptive shift in the fortunes of computing incumbents and entrants. I've also shown how the entry of smart devices has disrupted the telecom world and caused a transfer of wealth away from the old guard.
The data shown here frames these anecdotes. The data is not the whole story but it solidifies what should be an intuition.
However, according to Gartner, HP shipped 14.7 million PCs in the last quarter. While we don't have the total global figure for Apple, my estimates are 5.2 million Macs and 14.7 million iPads, for a total of 19.9 million computers in the same period.
There might be an error in both Gartner's and my numbers, but the gap of over five million in Apple's favor is unlikely to disappear.
The history of shipments from these vendors is shown below.
The market shares are also shown here:
I included the market shares thee years ago, and the rankings with the iPad excluded.[1] Apple went from 3.42% share at the end of 2008 to 5.6% share today excluding the iPad or 17.6% including the iPad. HP went from 19.3% in 2008 to 16% today or 13% if iPad is included.
Apple is ahead of schedule on their taking[2] the top spot in terms of units.
Notes:
Although vendors other than Apple also sell tablets, their totals are unpublished and I am not aware of any estimates so. If anyone has seen estimates I would be happy to amend the data.
Throughout the history of the industry, Apple never held the top spot. The Apple II peaked at 15.8% in 1984 and the Mac at 12% in 1992.
