For Better or Worse, Macs Dominate High-End Sales

Joe Wilcox at Betanews does some math with NPD’s June numbers and finds that Mac market share for computers costing $1,000 or more is a commanding 91 percent, up from about 66 percent a year ago.

While Apple sells only two models of Macs below $1,000, the MacBook and the Mac mini, according to NPD the average selling price for a personal computer was $701 in June; $515 for a Windows PC, $1,400 for a Mac. If you believe the aphorism that a business is an entity whose sole purpose is to increase shareholder equity, that’s great, but consumers, especially in difficult economic times, might like a little more for less. That truism also played out over the last few months with Apple.

Mac year-over-year retails sales declined from last November through this April, even as revenue increased. In January and February, PC unit sales were up 16.7 and 22 percent YOY, respectively, while Mac unit sales were down 5.4 and 16.7 percent. The fall in unit sales was likely the rationale for the price drop of the MacBook in late 2008, from $1,099 to $999, as well as this June’s price reduction at WWDC for the MacBook Air, 13″ MacBook Pro, and 15″ MacBook Pro.

What this means for Apple could be argued as one of two diametrically opposed outcomes. On one side, you have the rational assertion that Apple will have a lock on up to about a tenth of the overall market, and that the “race to the bottom” in pricing by companies like Dell was actually off a cliff. Certainly, that seems to be the feeling of the company as expressed by Apple Chief Operating Officer Tim Cook at the latest quarterly conference call.

I would say it differently, really, and maybe I haven’t expressed it well. Our goal is not to build the most computers, it’s to build the best. And we will — whatever price point that we can build the best at, we will play there.

However, the counter to the above argument is that the commoditization of PC and Mac hardware, along with ever-falling PC prices will, ultimately make Microsoft’s latest “bargain hunter” ads a grim reality for the Mac. This theory is also known as: Apple is doomed!

Either way, both scenarios will take years to play out, but in the near term the takeaway is more concrete: don’t buy an iMac unless you have to. According to Apple’s Q3 FY09 report, Mac desktop sales were down 10 percent YOY. This will almost certainly spur a price drop and spec bump for the flagship desktop in the near future, as early as August, no later than October. Who knows, we may even see the Mac mini return to its original price of $499.

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