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The Ongoing Decline of the Desktop Mac

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Outside the diminutive circles of Mac (s aapl) enterprise IT, the end of the Xserve will hardly be noticed, but perhaps it should. Up until today, there were four categories of Mac desktop: iMac, Mac Pro, Mac mini, and Xserve. Now, there are only three. The question then becomes whether other desktop product lines might be in danger of discontinuation, or if Apple might move away from the space altogether.

2010: A Predominantly Mobile Year

Before introducing the iPad at the Apple event in January, Steve Jobs defined Apple as a “mobile devices company.” According to Jobs, Apple made more money on mobile devices (including iPods, iPhones, and MacBooks) than companies like Sony (s sne), Samsung, and Nokia (s nok) did on their portable products. For the fiscal year ending in September, that trend continued.

Net sales for Apple were just over $65 billion, of which approximately $50 billion was divided among four portable product lines, with $6 billion going to Mac desktops. Since the iPad was only available for seven months in FY 2010, the Mac desktop will likely be last among Apple’s top hardware earners in 2011.

Notebook vs. Desktop Trends

That doesn’t mean the Mac desktop isn’t earning money. After a disastrous year in 2009, which saw a 23 percent decline in net sales, Mac desktop sales rebounded in 2010, up 18 percent. The problem is, Mac laptops were up 43 percent in net sales for 2010, and that was on top of a 9 percent increase in 2009.

Looking at Mac unit sales puts the net sales into perspective. While laptops started taking off in 2006, desktop sales have seen fluctuations, and even declines, though 2010 was a big rebound year. Nonetheless, Mac laptops represent a strong growth curve for Apple, which, as with the rest of the PC industry, has come at the expense of desktop sales.

Over the last 10 years, Mac notebooks and desktops have more or less switched positions in unit sales. In 2001, 7 out of 10 Macs sold were desktops. In 2009, the reverse was true. For 2010, strong iMac sales pushed the ratio back down to “only” two out of three Macs in favor of notebooks. With the introduction of the new MacBook Air, consumer dollars will swing even more towards the laptop, if analyst expectations prove accurate.

The State of the Desktop

The question then becomes: At what point do individual Mac desktop products reach a point of diminishing sales returns for Apple? The simple answer is that iMacs are safe in the short term. While Apple hasn’t broken out sales numbers for individual desktops since 2005, back then, the iMac accounted for about two-thirds of Mac desktop sales. Since then, comments in Apple conference calls reference only “strong sales” of the iMac, if desktops are mentioned at all, so the iMac’s role in the desktop picture has likely grown stronger still.

As for the Mac Pro and the Mac mini, a lot will depend on whether Apple continues to develop OS X Server. With the demise of the Xserve, Apple is showing it doesn’t really have that much interest in the enterprise back end. Exiting the server software business might make IT enthusiasts recoil, but Apple remains a consumer-focused business. It’s not going to happen next year, but Apple is clearly gearing itself towards a time when the “mobile device company” descriptor is entirely accurate.

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32 Responses to “The Ongoing Decline of the Desktop Mac”

  1. Bart Hanson

    With 50 Billion in the bank are Apple no longer giving us the “best” computer experience as the boasted they did for so long. I am wary and so had Apple be. Remember who’s KING here!

  2. There’s a data point you are missing in regard to the XServe’s demise: The newest version of VMWare’s VSphere cloud environment seems to support OS X Server virtualization on non-Apple hardware.

    At my own company we’ve moved all of our OSXServer installs to Minis for mission critical stuff (LDAP, DNS) and have been toying with hacked VirtualBox OSXS VMs for the past few months.

  3. WhiteyMcBrown

    Laptops are more than capable of running most people’s applications quite well. In the past there was a perceptible trade off between portability and power, but now… while most people are writing documents and surfing, our Macbook Pros are more than capable of doing those things and running Photoshop and Excel pretty full tilt for most people’s work scenarios.

    I had a Macbook Pro for my main machine, but decided to go iMac for my next purchase and I haven’t regretted the decision yet. The MBP was always hooked up to a 30″ monitor, external hard drive, Wacom tablet, and keyboard. Now I have an 27″ iMac hooked up to the 30″ monitor.I’m a senior art director and probably not the typical user, though. I’m not much of a road warrior and I’ll take whatever screen real estate I can. I’ve done a decent job of separating work hours and after hours (which I regard as a constantly repeating vacation time) so I’m glad to leave my work machine in the office.

    My iMac and iPad combo (work and play) are working well for me and the Macbook Pro sees little-to-no use.

    I don’t know why I felt so down that the XServe was removed, but I don’t have much need of it. I imagine I’d feel the same way if the Mac Pro desktop went away. Hopefully Apple does something drastic to the Mac Pro (like a case redesign) to alleviate fears of it going extinct.

    All that said, I expect the movement to laptops to continue. Computers are a hobby for me, but if you want to buy just one, then buy a laptop: powerful enough to use as a desktop and portable too.

  4. Apple has no intention of abandoning Mac desktop products, in my opinion. First, core Mac users rely on desktops for running film, photo and other applications that require lots of horsepower and a big monitor. Second, the iMac is the world’s premier desktop (IMHO) and is gaining horsepower every year and incredible monitors (take a look at the 27″ iMac screen). Third, the Mac Mini is the entry level Mac that draws new customers to the Mac family at a very reasonable price. Finally, the Mac Pro is the flagship product for the professional development and creative community.

    Granted, portability is king. But no MacBook can replace the capability, power and big screens of desktops. Nor can the provide the $699 entry price of a Mac Mini.

  5. Ames Tiedeman

    As schools across America continue to migrate their students to the iPad one can envision a desktop free word in the future. Why will they want desktops 10-15 years from now when they are in the labor force?
    They will appreciate mobile computing from the start of their careers as computer users..

  6. Hamranhansenhansen

    > As for the Mac Pro and the Mac mini, a lot will depend on whether
    > Apple continues to develop OS X Server

    Sigh … Mac Pro is used for Final Cut Pro workstations, Logic Pro workstations, Xcode workstations, and Adobe Creative Suite workstations. Servers are not nearly as important, which is why Xserve got killed, not Mac Pro. And Mac OS X Server is 98% Mac OS X, what is hard about developing it? Further, ARM servers with flash storage are the rage in enterprise circles because of size and power, so don’t be surprised if Apple does an Apple TV -style box with Mac OS X Server on it for $199 and drinks everybody else’s milkshakes.

    I think the entire premise of this article is off base. By this same logic, you can predict the end of iTunes Store because it only contributes a tiny share of the profit. iTunes Store contributes primarily by selling iPhones, iPods, iPads, and Macs. The movies, music, and apps in iTunes Store are made with Final Cut Pro, Logic Pro, and Xcode, often running on Mac Pro because when you spend 8 plus hours a day in one of those apps, a dozen processors and 32GB of memory saves you a ton of time and money. There are other benefits also, like software gets optimized for many CPU’s for Mac Pro, then when we see 4-way and 8-way notebooks the software can take advantage of that.

    MacBook Air only makes Mac Pro more necessary, not less. If you buy a smaller, less performance-optimized notebook then you want a more powerful workstation. The 17-inch MacBook Pro is Apple’s least popular notebook. People are choosing small for the road. Some only need smack, true, but try editing 18 megapixel 16-bits per channel photos in Photoshop with 4GB or 8GB of RAM it is painful. Try editing 4K movies on a MacBook Air. Yet that kind of professional work on Mac Pro results in consumer media that people buy iPads to consume.

    Finally: Apple is only interested in products that lead … Mac Pro is the world’s best workstation by far. Xserve was not the world’s best server. End of story.

  7. Apple forced me into a power mac with their insane dedication to glossy screens for the iMac. I use my mac primarily for photography and the 27 inch imac would have been ideal if I didn’t have difficulty with reflections off that glossy surface. My monitor is not from Apple for the same reason.

    If Apple were to eliminate Power mac, I guess I would be forced back to windows. I wouldn’t like it But Apple no longer seems to care about those who believe in Macs.

    • What a crock! Primarily for Photography? So the Mac Mini is no good then?

      Fact is the desktop is going nowhere for a while. iPads and laptops don’t yet have the grunt to do everything and not everyone can use a laptop in their day today work, ie photographers, designers, 3D artists, video editors etc. There’s no way Apple are going to kill the desktop until they have an alternative, as there’s way too much software that still requires huge amounts of processing power.

      Finally, I have a Macbook pro which is set up to use my 24″ screen at work but provides me with a powerful mobile solution when I need it. It can be a little slow when editing large graphics but the later models are much quicker than mine, therefore I suspect this won’t be a problem when I upgrade. Face it, this is the future whether you like it or not. Desktops as we have known them, are a dying breed.

    • I’d say the iMac is the only Mac desktop that is alive and well. While Apple doesn’t break out unit sales by models, the only desktop that’s ever talked about at conference calls is the iMac. It’s always the iMac that boosts desktop sales, last quarter being the latest example.

  8. Another explanation might be that whatever Apple is cooking up for that insane datacenter facility is designed to offset the idea of managed networks in the enterprise market. In other words, authentication and policy might not ultimately be locally hosted services. Only time will tell how Apple plans to compete with microsoft in enterprise. We would be fools to think that this isn’t something Apple wants to tackle in the future, there’s a lot of stifled innovation in that sector and an even bigger slice of the pie if Apple were to revolutionize the business market.

    • I think they are giving up on the Enterprise market for good. That is ok because in 2010 the consumer computer market is bigger than the corporate market finally. It has been that way for a few years. It will only grow more. The corporate world is moving more and more to Virtualization of servers and desktops with the likes of VDI’s etc. In my company 90% of users have a thin client and get to either a terminal server or a virtualized copy of Windows. Thin devices last 5-10 years with no moving parts and since they only live to connec to a remote enviroment there is not a lot of software or hardware support. They are so much cheaper than traditional PC’s/Macs that you can just keep spares and swap them out if the break. Apple has nothing like this at all.

      They have never really taken it seriously. The future of Apple is iOS in the consumer market. OS X and iOS will merge. iOS is really just a cut down version of OS X. A Mac 5 years from now will run a new OS and default to dumbed down iOS consumer UI. However for the developers and hard core users there will be a way to jump outside of that dumbed down UI to get the heavy computer lifting done (development etc) that most consumers dont care about.

  9. I’ve noticed that the component parts of iMac and the top line laptops have become very similar over the last decade. If the internal components are more or less the same, what difference would it make it we were to dock a MBP, or it’s future equal, to the 27″ LCD screen? Certainly pricing would be a factor, but the actual experience remains similar.

    I could see a Mac Pro Tower for developers and professional graphic and studio use and a new set of portable devises that plug into the larger screens as desired for the rest of us. In fact, my future wish is for the 27″ LCD screen and the next generation of MBP. So the thought is not far fetched, but I will bet still a long ways off.

  10. Kelly Fuller

    Just because part of your business has expanded and increased your profits beyond the other (that STILL MAKE PROFITS) doesn’t mean you should expect it to disappear? Yes, Apple has focused it attention to the mobile market and as such it has seen the benefits. What else would you expect? Your theory doesn’t make sense to me.

  11. andrei.timoshenko

    On the flipside, if the iPad and the (new) Macbook Air indicate Apple’s vision for the future of its mobile efforts, then having some powerful, static machine at home becomes that much more important.

    The way I see Apple moving, the 17″ MBP is in far more danger than the Mac Pro. Considering that a huge chunk of Apple’s present income comes from product categories that the company did not even have a few years ago, it makes more sense to analyze its future plans based on its (implied) vision of the market than on its present sales.

    • “having some powerful, static machine at home becomes that much more important”

      I think that statement would be correct if you deleted the “, static” part. The lack of mobility of powerful machines is surely just something that has happened to be the case historically, rather than a core part of their attraction.

  12. “Apple is showing it doesn’t really have that much interest in the enterprise back end.” Indeed, because in due time there will be no more enterprise back end – it will be the cloud. The market for server hardware/os will only be of interest for cloud infrastructure providers. The success of Apple will depend on Apple-quality software (as a service), enterprise eco systems and on continuing client build quality, mobility, simplicity and attractiveness.

    • Really? Everyone will move to the cloud. I guess that is correct, but “the could” will mean still mean the private data center of many corporations. We have looked at cloud option and we use some of them, but the represent maybe 3% of our IT assests? I would say 9 out of 10 times we look at cloud options but we choose to do it on our own.

      The cloud is probably great for consumers, since they dont have IT staff’s at home and only need a DSL line. However you start looking at out sourcing Email for 5000+ users as an example and the increase in data line cost will change your mind in a hurry. Adding a DS3 at 3k a month just to handle email traffic in and out of your company is going to add up real fast.

      I wonder what Apple has in that fancy new Data center? Racks and racks of Mini’s????

      Maybe they run Windows servers for MobileME and iTunes:)

  13. > there were four categories of Mac desktop: iMac, Mac Pro, Mac mini, and Xserve

    Wrong. I expect more from a GigaOm “journalist”. The Xserve was NEVer in the category of Mac Desktop. I’m very disappointed in GigOm.

      • Still WRONG. I dont care how they lump those sales, the xserve is a rack mount server. Its not a consumer device, never was. It was NEVER used by anyone as a workstation. Its loud, big and long, and it lives in a computer room/Data center. I know we have a few of them. Basically no different than a Dell R610 1U rack server. Heck they have the same guts, you just pay way more for the Xserve.

        It was a good move. OS X server and the Xserve products are a joke, and Apple never got behind them. The only thing they provide is a way to force settings onto Mac users via an AD/OD golden triangle and polices from OD. Even then the ability is very much lacking compared to Windows, Active Directory and GPO’s.

  14. I have had apple laptops as my home computer for nearly a decade (a couple of iBooks and now a MacBook Pro.

    Over time, my requirements have changed, cloud computing has occurred, broadband bandwidth has not kept up in UK rural communities, and I have got older (think eyesight and back).

    For this reason, I am now considering a Mac Mini (probably server) as my home machine and either a MacBook air or iPad as my mobile machine. In the future, I suspect that data privacy / security will become increasingly important at home as well as at work and that personal cloud computing with a home-based server may become increasingly desirable.

    I would be disappointed if Apple got rid of its desktops.

    I would be disappointed if Apple got rid of its desktops.

  15. If Apple discontinues their desktop computers, how will developers produce content for their mobile devices? Laptops are good, but most developers I know can never have a fast enough machine or a big enough screen. For that matter what would Apple themselves use?

  16. This article is sort of jumping the gun and completely ridiculous. Just because Apple dis-continues one desktop now let’s speculate that they might soon drop them all. People read way to much into things. There are way to many people that use powerful Mac desk tops because their profession requires it. Recording studios, graphic design studios, the movie editors. The list goes on and on. My MacBook pro and my iPhone can do alot and are great on the go. Bit in my recording studio my Mac pro tower is my work horse. I know tons of people in the profession’s I listed above and they feel the same. This article is a speculation at best trying to figure out what it all means that they would get rid of one of their desk tops. Not all of us that use macs are writers or students.

    • I’m sure there are many people in Mac enterprise IT who are saying the same thing about the Xserve. In the end, I think it will come down to unit sales over the next few years, and also whether OS X Server is discontinued.

  17. zunetips

    I was a long-time PC user and I recently decided to switch to a Mac system. I considered getting a MacBook Pro laptop, but I later opted for a 27″ iMac Desktop instead. I love my new iMac with its huge and clear screen, i7 Core processor, 1 TB of storage and 8 GB of RAM. I typically work at my desk all day and it didn’t make sense for me to get something portable like a MacBook Pro, so I may be an unusual case. Nevertheless, I’m glad Apple still works hard on producing great products like my iMac desktop!

  18. This switch to laptops coincides perfectly with the development of design programs at universities and art and design schools requiring students to have a laptop (usually a MacBook Pro). At the same time, laptops became more powerful. At the same time, you could suddenly edit a film on your laptop (this was a big fast change). So now film makers and film students have one (versus a big tower at home). At the same time photography became digital and, again, many programs required a Mac. At the same time, Apple released the iPod then the iPhone. University students then people (parents, coworkers?) in general began to see how Apple has nice stuff. But, they might have already had a PC at home or work so, they got a Powerbook/MacBook Pro. Then that old PC was used less and less. Now, they have a MacBook Pro and maybe an iPhone and/or an iPad. There is no need for a desktop Mac for users except those who work in a static place or need the computing power of a MacPro tower. And even then, most can get buy with a MacBook Pro with the creative pros being an exception.
    Regardless, there are just a lot more people who can use all the other products Apple makes versus the limited number of users (but pretty important culturally and in creative fields) who use a desktop.

  19. I just made a full switch from PC to Apple at home and work and such news worry me.

    Almost 80% of the media and advertising sector rely on the powerful MAC with its OSX… Hope Apple continues its support for its desktop line

    • I would be. I did the same thing between 2007 and early 2010, went to all Mac’s at home. Then two things changed my mind, Apple = iOS all the time 24/7 and Windows 7.

      Now I have one Mac that still has Snow Leopard and Windows 7 on it (my 2009 unibody macbook). The rest of them run Windows 7. A dual core Mac Mini with 4gigs of RAM runs Windows 7 64 super nice, especially with the 9400 video card in the Mini I have. The sad thing is it cant boot pure 64bit Snow Leopard.