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The latest figures from NPD regarding share of the retail computer sales market make for very interesting reading. Apple is doing extraordinarily well in the market for PCs costing more than $1000 (about £500), grabbing a 66% share. Surprisingly, given that it has been doing much better in recent years in the laptop market, it is desktop sales that have the larger market share, according to NPD's figures.

Before we get too excited, however, it is worth taking a minute to think through exactly what these figures tell us. Most importantly, they relate only to retail sales, and so do not include online or mail order catalogue sales. Retail is a relatively small and declining channel for computer sales as a whole, as indicated by the recent decision of the Dixons Store Group to close almost half of its Currys.digital stores.

Second, the figures only relate to computers that cost more than $1000. Most PC manufacturers have a number of both desktops and laptops in the sub-$1000 price range. Dell, for example, has no fewer than six laptops with prices starting at $999 or less. By comparison, Apple has one desktop model, the Mac mini, at that price point. That means almost all of Apple's marketing is targeted at the mid- to upper-ends of the market and that its sales are disproportionately represented in these figures. Trying to extrapolate anything regarding the health or otherwise of Apple's overall sales or market position from these numbers would be plain daft, but they do highlight a couple of important points about the way Apple does business.

The first point concerns

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the retail business. Apple is by far the biggest worldwide retailer of its own computers. As such, every time it opens a new store it is adding significantly to the growth of Macs sold at retail. The company now has more than 200 stores worldwide. Of those, 34 opened last year and eight have opened so far in 2008, according to ifoapplestore.com. With that kind of expansion, it is no wonder the NPD sales for retail show Apple grabbing such a large slice of the action.

Apple's rapid expansion in retail would seem to buck the trend, particularly when placed against the DSG announcement. However, that ignores one key element of Apple's success: it is not really a computer retailer. From the beginning, when it launched its first retail store in 2001, Apple set out to be a boutique retailer of highly desirable computers. It does not cram every square foot of floor space with display boxes and its assistants do not attempt to sell you extended warranties at every opportunity. The stores are admired as much for their design and layout as they are for the products they sell. And Apple has been very careful in its choice of location, opting for upmarket shopping malls and streets that house shops with similar aspirations. The result is that it has hit upon a winning formula, one that seems to work in every country where Apple has so far tried it. It works so well, that, according to analysts Sanford C. Bernstein, Apple generates around $4000 per square foot of retail space per annum. That compares to a US average of about $300. Combine that formula with the rapid growth rate of stores and it is no wonder that Mac retail sales have grabbed a large percentage of the market.

The other element of Apple's strategy highlighted by the NPD figures is its focus on margins rather than volume. Rather than compete with Dell and HP on price, Apple focuses on making its products desirable enough that we are prepared to pay a little extra to own a Mac, even if we know, somewhere deep in the back of our minds, that it is overpriced. By keeping the price high, Apple not only keeps its profit margin healthy, but it reinforces its own image and that of the Mac and iPod as premium brands.