IDC Numbers: Apple’s Doing Just Fine, Thank You

24 Comments

idc_1q_09

Here’s a piece on IDC’s PC Tracker numbers for the first quarter of the year. They’re quite revealing when you look at them soberly.

The first thing you have to do, as I’ve argued before, is pull Apple (s aapl) out of the “PC” mix, so Apple (Mac) can be compared against all the others (PC). Comparing Apple’s figures to an overall figure that includes Apple’s totals makes no sense.

In the U.S., we can pull Apple’s figures from the PC total and come up with 13,835 for 1Q ’09, and 14,297 for 1Q ’08, for PCs. Some quick math shows that to be an overall Y/Y drop of 3.23 percent.

Apple’s figures, as the number 4 vendor, show a drop of 1.22 percent.

Right off the bat you can see PC sales dropped 2 percent more than Macs. It would be hard (impossible, really), based on these numbers, to say that Apple was doing anything but better than the PC industry. And the real story goes even deeper than that.

Consider this:

  • Lots of noise is made over HP’s (s hpq) and Acer’s gains, but clearly these have come at the expense of Dell (s dell) and “Others.” You can’t change the fact that overall the PC industry is down over three points.
  • Millions and millions of netbooks have been sold, without which the PC figure would be worse. Why does this matter? Ultimately unit sales mean nothing, what matters is profits, and netbooks are even more razor-thin than cheap laptops.
  • Speaking of cheap laptops, those are practically being given away. The deals at HP and others are so “good” right now that there’s even less money in it for the vendor.
  • Apple, meanwhile, dropped by a much smaller amount than the PC industry.
  • A good portion of the quarter Apple didn’t even have their latest models available, being launched in March.
  • Apple did not have to rely on a “netbook” to drive its sales; profit margins are still good.
  • Apple also did not have to rely on giveaways or free upgrades.

I realize the above figures are U.S.-only, but it’s where IDC has provided detailed Apple figures. Besides, it’s silly to think that globally this overall trend for Apple will be different. Especially since — as PC supporters frequently point out — Apple is a smaller player on the global front.

And, no, I’m not saying a year-over-year drop is a good thing. Of course it isn’t. I’m saying it’s all relative, and one must consider the conditions under which the drop occurred.

The bottom line is this: For all the ranting and raving by analysts about lowering prices in this economy, which PC vendors have done, Apple has continued to produce quality Macs at good profit margins and still dropped less than the PC industry.

24 Comments

vdb

There are two studies out,
one that projects a total decline of -3.1 and another -0.3 for the US … both have Apple around -1.2 …
If you look at the total market you see that you have 2 camps, those who lower pricing, and can’t (or not enough) compensate with unit growth, and the ones that keep ASP unchanged ….
More interesting would be to create a new categorie of ultra portable devices … and just look at the “real” PC numbers …
Most of the people I know bought a netpc as a second/third machine not really expanding market share …

Pedro Cardoso

Not sure I agree with your interpretation at all. Take a look at this perspective, on the same data. The bottom line is, Apple has lost market share, and will continue to do so, as there is no room for a premium product in this consumer category. The value proposition just simply is not supported, and to compare one’s laptop to one’s vehicle, from a socio-economic “perceptionary” perspective is just ridiculous. Welcome your thoughts, here on my blog post I have provided..

http://blogs.itworldcanada.com/idol/2009/04/15/apple_falling_netbooks_soaring/

I do enjoy following your blog, and though there is typically an “appple” bias to your posts, this is accepted and most of the time, balanced appropriately. This post however, appears to reflect a reluctance to face the brutal facts. This brand is in trouble, and would be even with Jobs on the scene – but without him, believe the leading indicators are clearly “on the wall”…

Brian Hogg

“It takes a misreading of my post for one to draw that conclusion. I made this clear in my first comment above.”

No, your explanations don’t really relate to my comment. I’m saying that you’re insisting on some very specific re-reading of the numbers to make Apple look even more popular, because, gosh, it can’t be that Apple’s not at the top of this list, can it? Who cares if they’re not at the top of the list? Their market segment went up, and they’re still selling lots of computers. Investor confidence is high. Who cares if they’re not kicking the competition’s butts?

The apologist criticism is appropriate because you first off go to pains to say why none of the numbers matter at all because the structure of the chart is wrong, and that the Mac is separate and wonderful and unique and must be considered differently, then you list seven reasons why the numbers don’t really matter again, which feels very much like an apologist’s viewpoint.

Again, why does it matter? Does it take away from your enjoyment of the computer you use? Of the Apple brand? Why do you even feel the need to redress the sales charts?

Brian Hogg

@18

Well, sure, if the numbers were different, then they’d be different. So what? A netbook is a type of computer, so it makes sense to have them in a computer sales chart.

Brian Hogg

“The Mac is a SUPERSET of a PC.”

Supreme ego of that comment aside, it doesn’t hold up, because a Mac is a PC, and as such can run on standard PC hardware. It’s built using standard hardware. A person can install OS X on the same hardware that runs Linux and Windows.

So if a Mac is a Superset of a PC, then so is a Dell, because you can install Windows, PC, and OS X. Should that also be taken off the list you show in the article? If so, then the “PC industry” experiences a good jump while the Mac and Dell industries take a dive …

tom B

The Mac line got a refresh part way through the quarter, which probably means the January numbers were lower than they could have been.

ALL the numbers are highly suspect for several reasons: Netbooks shouldn’t be counted as PC’s. A large fraction of them run LINUX instead of Windows. And the Netbooks, in capabilities can’t be compared firectly to real laptops, because they basically have fewer features than an iPod Touch/iPhone, IMHO. If you take the Netbbok numbers OUT, PC shipments look pretty pathetic.

Pats

The problem with these statistics is right now they are estimates. Apple does not report earnings until next week, and a small change will turn the negative to positive. It is obvious Apple’s rate of growth in the PC market has slowed, but Apple does a bit more then sell PCs so when you add up all the business segments Apple is growing at a very respectable rate for a recession. Most companies have negative earnings during a recession and Apple reported their best quarter ever last quarter. We spend way too much effort talking about netbooks and product categories. If you look at use cases, the Itouch and Iphone can fill most if not all of the use cases for a netbook so if we add the 30M units into the mix the growth numbers and worldwide percentage might look slightly different. The numbers crunchers at IDC make an arbitrary cutoff to use netbooks in the PC category, Iphones in the smart phone category and Itouch in the MP3 category. Guess what if your using it to surf the web, you can use any of the devices I just described. If your a stock holder then the revenue matters and for Apple it has about 30% of the US pc revenue. If you are a buyer, buy what you want and hopefully you enjoy your purchase.

Constable Odo

Apple should continue to sell computers exactly the same way they’ve been selling them as long as they are making overall profits to keep the company well into the green. I wonder if any of those PC makers have any long-range vision of running a profitable business.

It’s a lot easier to increase market share than it is to increase profit margins. If a company is willing to practically give away it’s products and don’t concern themselves with losing money on each product they sell, then it’s easy to gain market share from people that are only interested in paying less money. It’s much harder to make profits unless you can prove to potential buyers your product has some higher intrinsic value.

You can tell customers it’s got better parts or you’ll offer better customer service or the whole package just works better than the average product. Maybe a lot of it is due to advertising hype. But one thing that does stand out with Apple products is that apparently far more customers are happy with using Apple products than similar Windows PCs. Windows PC fanboy users say that Apple Mac buyers are being tricked, in some way, into paying more for almost exactly the same quality product. Yet, overall, Windows PC users don’t give their computers the same high-quality rating that Mac users do.

There must be something to that. Does Apple put some sort of pheremone in their computers to make users enjoy them more and rate them higher?

I’m not a Windows PC hater. I use Windows XP in BootCamp on my MacBook Pro and I have absolutely no problems with it. I run Kaspersky AV and have never had a problem with malware or virii since installing it. I’ve never seen a BSOD in the years I’ve used Windows but I do reinstall Windows every couple of years or so. However, I just like using Macs since they’ve always been reliable for me for 20 plus years or so.

So, since I can afford at least some range of Macintosh computer I would never consider switching to a Windows PC. I would never want Apple to just lower prices if they’re going to cut corners in some way. A refurb is usually a few hundred dollars cheaper, so I could always purchase one of those.

I don’t feel I’m being tricked into buying an Apple computer for more money. I’m an Apple shareholder and I’m going to support the company. If the stock goes up, then the computer gets paid for when I sell SOME of my stock. Besides, after all these years, I like being part of the “cool” crowd.

Tom Reestman

Brian,

“A Mac IS a PC.”

Microsoft, with the PC vendors and marketing machine, are spending hundreds of millions of dollars disagreeing with you. The “I’m a PC” campaign does not include Macs.

Your statement is misleading at best. The Mac is a SUPERSET of a PC. Sure, it can run the Windows and Linuxes of the world, which PCs can do. But it also runs the Mac OS, with all its advantages, and affords the tight integration between hardware and software which is the hallmark of the Mac platform. Put bluntly, it’s easy for a box to be a “PC”, what makes a Mac beautiful is that it’s also a Mac.

“It makes you sound a bit like an apologist…”

It takes a misreading of my post for one to draw that conclusion. I made this clear in my first comment above.

Brian Hogg

I think it’s somewhat disingenuous, and fairly incorrect, to consider Apple as some sort of different machine. It’s not in a different category, nor should it be.

A Mac IS a PC.

For the average consumer, they walk into a store and see Dell, HP, Acer, Apple, etc, it’s just another brand. The fact that it means more to you and to a lot of people on a personal level doesn’t mean that it should be given some special consideration.

I agree that their percentage drop is less than the other manufacturers, but why do you feel the need to exalt them in a way to try to explain away their losses? It makes you sound a bit like an apologist (thinking of Christian apologists, here, with the “yes, but if you look at this gospel like THIS, with one eye closed, on a Tuesday at 10AM, you’ll see how it makes sense”). It also feels a bit like saying that humans shouldn’t be considered as part of the animal kingdom, even despite the fact that we’re animals ourselves.

I should also suggest that part of the reason that the other manufacturers had such a dip, at least compared to Apple, is that they have much more market share to lose.

I’m not trying to minimize Apple’s achievement in any way, I’m just saying that you should look at it fairly.

simon

Hi Tom,

I think I misinterpreted the direction of your post, I read it as “Apple is immune to the recession”, whereas maybe I should have taken it as “Apple is feeling the effects but not too badly”.

Echoing another commenter, thanks for doing the research and presenting the data in a positive way; unlike much of the media (I can think of two particular Daily’s here in the UK) who would believe that the western world is about to drop of the planet (financially that is!)

Bas

There is a difference between lowering your product cost, and lowering you margins. I am all for paying for quality, just not for margins.

Richard

I have been a Windows machines user for 20 years. Ocver that time I have had desk tops and then lap tops from many manufacturers including Gateway, Toshiba, Compaq, Acer and of course Dell. In January in frank total dissatisfaction and frustration, I bit the bullet and bought an iMac desk top and pumped up the spec. Yes it was much more expensive and I am still getting to grips with OSX after being a Windows bod for years. But, despite the cost and the learning curve I would NEVER buy another Windows based PC> The iMac reeks of quality and design pride, is robust elegant and beautiful. It is clearly designed and built to last and deliver stunning results for years. If lowering the price means lowering the quality, then my vote says keep the quality. I share the view of an earlier posting which is “save up and buy the best”. It’s an investment

Bas

Am I the only one who would like to see apple lower their prices?

Quix

Hmm, would you rather be selling $1,000+ computers and be down 1.2%, or be selling $300 computers and be up 12%?

Yeah, I’d choose Apple’s spot any day. Let the idiot PC makers fight over zero-margin scraps.

AnotherDavid

Sorry:
“…people prefer paying *to* getting a Vista powered…”

AnotherDavid

Very good points.
However there are at least two points more to consider.
First, the fact that it had a smaller drop than the rest of the industry when all the pundits in the press were commenting about the fact that Apple is too expensive; makes a very nice statement.
Second, where do these numbers leave the new Microsoft commercial about Apple’s Tax?
Apparently people prefer paying at getting a Vista powered computer… (netbooks run on XP!)

Oak

Ah, ic. I hadn’t kept up with Acer’s accumulations and netbook sales.

Tom Reestman

Oak,

Keep in mind Acer includes Gateway, Packard Bell, and eMachines, which help the total. Further, I believe Acer is a big beneficiary of netbook sales. Their Aspire One is pretty well thought of as these things go.

David

I’m sorry, but you can not use logic and reason to explain facts.

This is the internet, we need hype and wild guesses based on our presuppositions of what is happening.

A bit more seriously:
Thank you Tom for taking the time to do some research and deep analysis to come up with a factual explanation of the trends in PC and Mac sales.

Tom Reestman

Simon,

I’m not sure I understand what your comment is supposed to mean. I specifically said this:

“And, no, I’m not saying a Y/Y drop is a good thing. Of course it isn’t.”

So clearly we agree that a loss isn’t “good”. But when you say I can’t “say that it is any different”, where did I do that? Like I said:

“I’m saying it’s all relative, and one must consider the conditions under which the drop occurred.”

There’s a recession going on. A drop is not unexpected nor surprising. That doesn’t mean one can’t (or shouldn’t) examine the drop in context and draw valid conclusions. That’s what I did.

The horror stories from the Apple-bashing press about Mac sales dropping double-digit percent Y/Y in January and February — ignoring the lack of new models and the MacBook Air’s introduction in ’08 February — would have us all believe Apple was heading for a disastrous quarter. Clearly, that’s not the case. They did BETTER than the PC industry, and did so without needing dirt-cheap netbooks or giveaway upgrades. THAT, in context, is good news.

simon

I love Apple and the products but this article looks exactly like the sort that make PC users and the rest of the world that don’t really care what their pc is, so long as it has the blue e for the internet on it, give us the title of fanbois.

A loss is a loss, straight up. Due to the massive shipments of net books and the such like it makes the relevance of that smaller mark up you speak of diminish considerably. This recession is hitting everything pretty much (except maybe defense) and the way to deal with it IS to cut your profit and hope for some kind of growth. In the end that’s more customers that you can cash in on in the future.

I’m glad Apple haven’t dropped their prices, just like BMW, Merc and Audi they are a more expensive product aiming at a certain type of user who will pay more because it matters to them. I need a new laptop, I can’t afford a new Macbook but I’m not jumping ship to a PC manufacturer, I will wait and save (now there’s a concept that people should have employed over the last few years rather than credit credit credit)

I digress, my point is, a loss is a loss is a loss. You can’t paint it any different to that, it’s indeed a small loss but don’t try to say that it is any different.

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