Installed base of a product is the number of units that are currently in use by customers. It provides a measurement of a company's existing customer base and the extent of their investment in a particular product or technology. In contrast to

market share Market share is the percentage of the total revenue or sales in a Market (economics), market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those ...

, which only reflects sales over a specific period and relative to the total market, the installed base represents the number of units currently in use. This information can be used to evaluate a company's customer base, investment, and market position. The installed base plays a significant role in various industries, including computing, automotive, medical devices, and home appliances. It can impact the level of support, availability of replacement parts, and other factors. Some companies that have leveraged their installed base include Apple, Microsoft, Nintendo in the computing industry, and Tesla in the automotive industry.

Significance

The installed base of company's products represents a valuable customer base that is already using their products, services or systems. This provides companies with an opportunity to upsell and cross-sell their products to existing customers, as well as to use the information about their customer base to inform future product development and marketing efforts. Companies can use their installed base to determine the average lifespan of their products, which can inform product development and planning, as well as to assess their market position and to track the success of their product over time.

Characteristics

There are several key characteristics that define an installed base, including:

Size

The size of a company's installed base reflects the number of products, systems, or services currently in use by customers. This can be used as a measure of a company's market position and customer base.

Composition

The composition of an installed base can be evaluated to determine the types of products, systems or services in use, and the demographics of the customers using them. This information can be used to inform product development, marketing, and sales efforts.

Products' lifespan

The lifespan of products in the installed base can provide important information about the average lifespan of a company's products and systems. This information can be used to inform product development and planning.

Location

The geographic location of customers using a company's products, systems or services can be used to inform sales and marketing efforts.

Upgrades and replacements

The rate at which customers upgrade or replace products in the installed base can provide important information about the success of a company's product and the willingness of customers to invest in new or upgraded versions.

Relevant industries and markets

Computing-related industries and markets

The installed base of computer systems, such as operating systems and video game consoles/platforms, is a significant factor in their respective industries. In these markets, the size of the installed base is a key indicator of the reach and influence of a particular product or platform.

Other industries and markets

Installed base is also a significant factor in other industries, such as automotive, medical devices, and home appliances. In these markets, the size of the installed base of a particular product or platform can impact the level of support and availability of replacement parts and accessories.

Applications

The installed base is used in a variety of applications, including:

Market analysis

The installed base is used to determine the size and growth potential of a particular market.

Product planning

Manufacturers use the installed base information to plan the development of new products and services, and to determine the potential for future sales.

Customer support

Service providers use the installed base information to determine the level of support required for a particular product or service, and to allocate resources accordingly.

Sales forecasting

Sales teams use the installed base information to make informed decisions about sales targets and to allocate resources accordingly.

Pricing strategy

Manufacturers and service providers use the installed base information to determine the optimal price for their products and services, taking into account the size of the market and the competition.

Example companies

Apple Inc.

Apple's installed base of iOS devices, such as the

iPhone The iPhone is a line of smartphones developed and marketed by Apple that run iOS, the company's own mobile operating system. The first-generation iPhone was announced by then–Apple CEO and co-founder Steve Jobs on January 9, 2007, at ...

and

iPad The iPad is a brand of tablet computers developed and marketed by Apple Inc., Apple that run the company's mobile operating systems iOS and later iPadOS. The IPad (1st generation), first-generation iPad was introduced on January 27, 2010. ...

, has allowed the company to offer a wide variety of accessories and services. Apple's app store and media offerings are tailored to its device ecosystem, providing customers with a seamless experience.

Microsoft Corporation Microsoft Corporation is an American multinational corporation and technology company, technology conglomerate headquartered in Redmond, Washington. Founded in 1975, the company became influential in the History of personal computers#The ear ...

Microsoft's installed base of

Windows Windows is a Product lining, product line of Proprietary software, proprietary graphical user interface, graphical operating systems developed and marketed by Microsoft. It is grouped into families and subfamilies that cater to particular sec ...

operating systems has provided the company with a platform to offer a diverse array of software and services. Its suite of productivity tools, including Microsoft Office, are designed to be used with Windows computers.

Nintendo is a Japanese Multinational corporation, multinational video game company headquartered in Kyoto. It develops, publishes, and releases both video games and video game consoles. The history of Nintendo began when craftsman Fusajiro Yamauchi ...

Nintendo has a large installed base of its video game consoles, which it leverages to sell more games and accessories. For example, the company has a suite of video game series, such as

Mario Mario (; ) is a Character (arts), character created by the Japanese game designer Shigeru Miyamoto. He is the star of the ''Mario (franchise), Mario'' franchise, a recurring character in the ''Donkey Kong'' franchise, and the mascot of the Ja ...

and Zelda, that are designed to work best on Nintendo consoles.

Tesla, Inc.

Tesla's installed base of

electric vehicle An electric vehicle (EV) is a motor vehicle whose propulsion is powered fully or mostly by electricity. EVs encompass a wide range of transportation modes, including road vehicle, road and rail vehicles, electric boats and Submersible, submer ...

s provides the company with an opportunity to offer related products and services, such as charging stations and

energy storage system Energy storage is the capture of energy produced at one time for use at a later time to reduce imbalances between energy demand and energy production. A device that stores energy is generally called an accumulator or battery. Energy comes in ...

s. The company has also leveraged the data generated by its vehicles to improve its self-driving technology.

External links

Web browsers' indications of operating system usage from w3schools.com
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