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So that¿s where all those Mac laptops were hiding!

I have long suspected that Macs had made more headway in capturing market share than the periodic research reports have indicated. Finally, we have a report that explains why.

A Bernstein Research report by Toni Sacconaghi, Jr., which I discovered via Philip Elmer-DeWitt's Apple 2.0 blog at Fortune, provides some fresh numbers on the Mac, particularly its laptops.

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The Bernstein report differs from other market share reports I've seen in that it breaks the data into five price "quintiles." Mac laptops have a whopping 29.4 percent of the top quintile (machines over $1,300) and 9.3 percent of the second. When you drop the two quintiles in which Apple does not compete (the bottom two fall under $1,100), Mac laptops still net a 13.8 percent market share in the U.S. While still a long way off from parity with the Windows competition, these numbers jibe better with real-world observations than the 5 to 6 percent numbers that reflect sales of mountains of cheap PCs to businesses.

One of the charts included in the Bernstein report includes a line that breaks out Apple's U.S. market share in the highest price category in the education and consumer markets, excluding the corporate market that the company historically has ignored. Mac laptops comprise 45.8 percent of that market. Wow.

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While anecdotal proof for the Mac's increasing popularity has been building for several years, the market share numbers have not reflected what seemed obvious. True, the Mac's overall market share has doubled since 2004 (from 3.2 percent in the U.S. to 6.7 percent and from 1.8 percent worldwide to 2.9 percent, according to Gartner data), but all those glowing Apple logos on laptops on college campuses, at technical conferences and in public Wi-Fi areas argued for higher numbers.

Apple's laptop share worldwide has shown a similar pattern. Mac laptops do best in the highest price quintile with 11.2 percent, and have 8.1 percent of the second most expensive one. Mac desktops have 8.1 percent of the top quintile of the global market (but almost nothing in the other four). While these figures are far from dominating, compared to Apple's scrawny worldwide share overall, they're startling.

Another surprise in the Bernstein report is that Apple's surge in the high-priced categories is a relatively recent phenomenon. In 2000, Mac laptops held 3.6 percent of the top quintile in the U.S. and 4 percent of the second. The highest percentage, 6.1 percent, was in the lowest-priced quintile. By 2004, the Mac laptops had risen to 7.6 percent of the top quintile and 7.2 percent of the second. That year Apple had the highest share in the third quintile at 9.7 percent.

Despite what appears to be great news for Apple laptop sales – rapidly increasing market share in the highest-priced, most profitable quintiles -- Sacconaghi's report points to dark consequences. It views Apple's rapidly increasing share of the pricey end of the laptop market as a limiting factor to growth in the years ahead, particularly in light of the Mac's increasing average price versus that of a typical PC laptop.

I had almost forgotten this, but the iBook a few years ago started at $999. The increase in price of the entry-level MacBook to $1,099 combined with the perpetual fall of Windows-based laptops has had the net effect of making Macs more and more expensive relative to their PC counterparts. Sacconaghi theorizes this will narrow the potential market for Mac laptops and pressure Apple to drop the entry-level price back to $999 or lower to perpetuate the rate of growth it has enjoyed over the past two years. Combined with Apple's determination not to go after the corporate market, further limiting its overall market share growth, I have to concede that Mac laptop sales could hit a wall at some point.

Sacconaghi does not note in his report that Mac laptops, while costlier on average when compared to the entire Windows PC market, are priced about the same as PCs of comparable abilities (Charles Gaba's System Shootouts site has many examples of this). Apple refuses to make cheap Macs because it wants to maintain its image as a maker of quality computers and because it disdains low-margin hardware. But in doing so, Apple has written off a significant chunk of the PC market.

This could present a problem as Apple's market share grows, but one of the notable aspects of the company's recent increases in market share is that they have come despite the higher average selling prices of Macs. Consumers are voting for the Mac with their pocketbooks, and there are no signs yet the trend is slowing.

Even if Sacconaghi's scenario materializes (he projects sales into 2011), Apple's generous margins always give it the option of prudent price cuts to goose market share. Case in point: the controversial $200 iPhone price cut resulted in a sustained 56 percent increase in sales, according to Piper Jaffray's Gene Munster.

But for the near future, I see Apple standing pat. Wall Street should be more than satisfied with the boatload of good news Apple will deliver in its fourth quarter earnings report Oct. 22.

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