Blog Post

The 10 Million Mac Year

With the end of September comes the end of fiscal year 2009 for Apple (s aapl). While the company won’t be releasing the numbers for another two weeks or so, consensus estimates from Wall Street for the fourth quarter will fill in the blanks, as Apple always beats estimates. For 2009, during what is arguably the worst economic downturn since the Great Depression, Apple will have its best year ever.


For FY 2009, Apple can expect sales of approximately $36 billion, up from $32.5 billion last year. While the increase will only be half that from 2007 to 2008, that’s against severely curtailed consumer spending. Conventional wisdom suggests premium products like those from Apple would be hit hardest in such an environment, but Apple has been selling strong since 2005. However, looking at net income over the long term, the picture is a little different.


That bump during the late 90’s is largely due to the original iMac, introduced in May 1998. The iMac probably saved the company. It’s hard to imagine Apple losing money or barely profitable until 2004. That year the company earned net income of a quarter of a billion dollars. The next year it was more than $1.25 billion, beginning that nice linear trajectory to $5.5 billion for FY 2009, but enough about the money. For those who use the products, the real numbers are in the success of the platform, and the Mac is about to have its best year ever.


Fiscal year or calendar year, it just doesn’t matter, either way 2009 will be the first year the company sells 10 million Macs. Sales estimates for the quarter ending September 30 are for 2.7 million Macs, putting Apple just over that magical base-10 for the fiscal year. That will top last year’s record of 9.7 million Macs, which was also a new record, but then every year since 2006 has been a new record. The question then becomes whether this year’s “slowing” sales are due to economic conditions, or a plateauing of the Mac like the iPod has seen.


The bad news is that the phenomenal growth the iPod enjoyed from 2004 through 2007 appears to be over. The good news is that’s still more than 50 million iPods per year. For FY 2009, projections are for just under 54 million iPods to be sold, which would be just under the record of 54 million sold last year. However, further solace can be had in the theory that iPod sales are being cannibalized by iPhone sales, and iPhone sales are looking a lot like iPod sales used to look.


Analysts are all over the place on iPhone sales for FY 2009, with somewhere in the range of six to seven million iPhones sold in the fourth fiscal quarter. Splitting the difference at 6.5 million means iPhone sales for the year will come in just under 20 million. That would nearly double last year’s total of 11.6 million. With the imminent introduction of the iPhone into China, it’s a safe bet that iPhone sales won’t be leveling off anytime soon. The iPhone is undeniably the biggest success in a record year, but what brought that success?

Two words, one name: Steve Jobs.

That’s the biggest earner for the year past, and every year going back to 1996.  Although Jobs became “iCEO” in the summer of 1997, Apple acquired NeXT in late 1996 for what would become OS X, and got Jobs for free. It was the best deal the company has ever made. Just look at the numbers.

21 Responses to “The 10 Million Mac Year”

  1. The most interesting thing is when comparing all those numbers is that it took 8 years before Steve Jobs had any significant impact on Apple sales, revenue, or profitability!

    That isn’t the miracle turn around that everyone talks about.

    It wasn’t until the iPod became a success in 2005 that there is any major upturn in their annual results.

    • What the graph here does not show is the continued losses before to his return, being profitable in 98, 99 & 00 may not the success of recent years but certainly a turn around for the company. Most of which was a result of him cutting projects.

    • I think the original iMac, and Jobs role in bringing it to market, saved the company. Not only did it make the company profitable and result in record Mac sales, the iMac proved Apple still had the magic. Without the iMac, I don’t think Apple would have made it to the iPod.

  2. I suppose it’s “open for debate” whether Mac sales have plateaued, but it’ll be an awfully short debate.

    Mac sales increased despite a terrible economic climate. How can anyone reasonably argue they wouldn’t have been higher under “normal” economic conditions? We’re supposed to believe Mac sales plateaued, and the economic conditions are simply a coincidence?

    • There are two related issues here. First, the current economic climate could turn out to be a double-dip recession. If the economy of 2010 looks like 2009, isn’t it reasonable to presume Mac sales next year will be similar to this year? Second, even if the economy improves, it’s not going to be like it was before the recession for a while. While Apple will continue to grow Mac sales, look to Toshiba and Acer for crazy-insane growth via netbook sales. While netbooks will always have drawbacks, price will never be one of them.

    • “If the economy of 2010 looks like 2009, isn’t it reasonable to presume Mac sales next year will be similar to this year?”

      Actual sales, or sales growth? If sales were “similar” then growth would be flat; I disagree that would happen. If sales growth were similar then overall sales would rise; this is what I’d predict.

      But if the economy improves, all bets are off…

      “even if the economy improves, it’s not going to be like it was before the recession for a while”

      Not sure I agree here. At least not when netbooks are the argument. I don’t believe netbooks have had even a smidgeon of impact on Mac sales. None.

      Excluding the tiny geek market, netbook sales have come from either those unwilling to pay $600 for a cheap laptop, or those that feel they saved money by not buying the cheap laptop. Neither of those buyers were getting a Mac anyway. I don’t believe any netbook represents a lost Mac sale.

  3. That’s true, however GAAP rules were in effect in recent years, and there has been some softening of demand for Apple products regardless of accounting methods. Unit sales of iPods have been flat for three years, and it’s open for debate as to whether Mac sales have plateaued. The iPhone is where the crazy growth appears to be headed in 2010, notwithstanding the mythical iTablet.

  4. As far as sales and earnings are concerned, you do realize that you are comparing recent years with significant deferred sales and earnings, against older years with insignificant deferred sales and earnings?

    Because, true non-GAAP sales the last 4 quarters have been $42.3B, and not the $34.6B reported. And, net income has been $8.3B and not $5.2B. If you were to report non-GAAP sales and earnings, you’d see no dip or slowing, whatsoever.