Why Apple is Dominating the Premium Computer Market

Among computer shoppers looking to spend at least $1000, 91 percent choose Macs. That's according to research from the NPD Group, in a CNET report. How different is the Apple market from its competitors? The average price for a Windows PC is $515. For Macs, it's $1,400. Is that good news or bad news for Apple?

Well, it's a bit of both. On the one hand, clearly the company has tapped into a ferociously loyal band of consumers who are willing to pay 4-digits for their laptop. That's good, and Apple's Mac sales are up 13 percent. On the other hand, some analysts fear that Apple's reluctance to build a decent computer for $800 will cut them out of market share when more consumers turn to netbooks -- smaller, cheaper laptops designed mostly to work online.

As NDP analyst Stephen Baker points out in the article, Apple has been very good at cannibalizing its iPod to open the spectrum of prices for its product. Today iPods go as cheap as $79 (the Shuffle) to $399 (the iPod Touch with the most memory). There's no reason to believe that they couldn't do something similar with their Mac laptops, the cheapest of which is more than $1000 including taxes. Apple is dominating the premium computer market for them same reason it's dominating the music player market: Its products are higher quality, full stop, and Apple knows that enough mainstream consumers will notice and value the difference. After all if you want to buy cheap, as one commenter pointed out, then dude, you're getting a Dell.