Just to preface things, it is crazy to call either Exxon or Apple a niche player. I hope that was clear in my original post as I obviously understand Exxon is not a niche player. I was pointing out the stupidity of saying that percentage of the market determines whether you are a niche player or not. Your original post implicitly argues that a company with a small percentage of the market must by definition be a niche player. I was pointing out the absurd (and appropriate given the topic’s subjects) comparison that Exxon has an even smaller percentage of the oil market than Apple has of the cell phone market and nobody on the planet would consider Exxon to be a niche player. Now you have come back and changed your argument entirely, which is a little unfair in a debate.
Second, Apple doesn’t even fit into the categories that you believe they do. Do you honestly think RIM has 25% of the cell phone market while Apple has 4%? That’s absurd. You are mixing data to try to make your argument. RIM may have 25% of the smart phone market and Apple may have 4% of the overall mobile phone market, but that’s an absurd comparison. Clearly Apple operates in the smart phone market as does RIM. RIM is larger than Apple in the smart phone market, but not by much. Further, Apple will probably pass RIM this year. Apple is a dominant force with a huge percentage of the market in smart phones. On the personal computer side, there is a similar although not as severe problem with your comparison. You are effectively comparing one company that has a very high percentage of the retail consumer personal computer market (Apple) to another that has a big presense in both that market and the professional personal computer market (HP). I’d say that Apple compares fairly well against the other large companies like HP, Dell, Toshiba, etc. in the retail consumer pc market and would be considered to be one of the dominant players. Finally, a big portion of Apples’s business is in the digital music industry, which they are dominant in without really any noteworthy competitors. You completely left that out.
Third, product differentiation is simply not possible in a commodity exploration and production industry. If that is the benchmark then there are no niche players in any commodity production industry. At that point, your definition of niche has lost any utility as a word. The differentiation comes not in product differentiation but in the form of geography, conventional / unconventional, onshore / offshore, exploration focused / development focused, etc.
Exxon has an overall business strategy just like Apple does. Exxon is trying to discover and develop new fields just like Apple is trying to invent and develop new tech products. Each is in multiple lines of business - (Exxon: oil and gas, refining, chemicals, etc.), (Apple: Smart phones, personal computers, digital music). Each has an overall industry: energy and technology, respectively; each has a vertically integrated approach to that industry; and each is the largest public company in their respective industries. Calling Apple a niche player is just ridiculous.
For the home PC market, the top 2 companies account for around 50% of the market - HP is around 27% and Dell is around 20%. Apple is 7%. Even eliminating servers, less than one in ten people buying choose to buy Apple. And this is actually a vast improvement for them.
Cell phones are similar, although as you point out then you get into issues of are we talking all cell phones or just smart phones. Personally, I don’t view smart phones as a separate market. It’s high-end vs low-end of the same market. But industry analysts say smart phones are a separate market. I don’t agree, but alright, I’ll play along. When viewed as such, Apple is #2. So perhaps I should modify my statement to say if the market is a niche market to begin with (only one in five cell phones are smart phones), then Apple can hold it’s own.
As for mp3 players, they created that market. I give them full props for doing so, but still it’s different when you’re the company that made the entire market. It’s kinda of like if a decade after Ford started selling automobiles someone pointed out how large a % of automobile sales they have. Yeah, no shit. What a shocker. Even so, Apple is down to 75% of the MP3 market. Ford hadn’t lost one in four customers just a decade after it started, but Apple has. Which can be viewed as when a market becomes competitive, as opposed to Apple being the only player because it created the market, then Apple loses it’s lead fairly quickly.
I’m not dissing Apple here really. They are very profitable. They are innovative. They do hold a large influence over other companies products. However, they have chosen business practices that mean, despite this, they aren’t the dominate player in most of their markets.
Which relates back to the OP. Apple is a niche player. People don’t get pissed off about what niche players do. However, people get pissed about what the big boys do. Since Exxon’s market is vastly different, so it’s 2.8% is viewed as a big boy. Thus the public will get pissed at Exxon but not Apple.
Indeed, and I suspect their share would be smaller if they didn’t have the buzz of the consumer market behind them. They were practically irrelevant before the iPod.
You need to consider margins also. The margin of a smartphone is a lot higher than that of a low end cellphone which is given away. Also remember that Apple got that share with only one provider partner, which is pretty impressive. (And not even the dominant provider.) Also remember that Apple arranged for the iPhone to be the Apple iPhone, not the AT&T iPhone, which let them leverage it for the iPad.
I’d have to look it up, but I doubt Ford had 75% of the car market 10 years after introduction - and things moved more slowly back then. (Not that Ford invented cars.) MP3 players are not exactly difficult items to copy. They win not by making better players, but having a better distribution system.
Niche players don’t set market direction. Niche players don’t have people lining up to buy their products. Niche players don’t get immense amounts of media coverage for a product rollout.
BTW, I am not an Apple fan. I don’t own any Apple hardware, which I consider overpriced and not nearly as user friendly as people think. But I have to give them their due.