Mac Lands One-Two Punch Against PCs in Profit and Growth

From Apple 2.0, Needham analyst Charles Wolf has issued a research note on Mac sales that is no less impressive for being a statement of the obvious: Apple is selling a lot of Macs for a lot of money.

For third quarter 2010, Apple sold a record 3.9 million Macs, compared to nearly 90 million PCs. That means Mac market share continues to hover at between four and five percent of worldwide sales, but that may finally be changing. While PC sales were flat in the U.S. and Europe during the third quarter, Apple saw 20 and 25 percent growth, respectively. Possibly more important, Mac sales in Asia, including in the all-important Chinese market, are taking off, up 80 percent year over year.

Worldwide, the Mac was up 28.5 percent year over year, compared to a 9.7 percent increase for PC sales. Mac sales were boosted by sharp increases in home and business sales, up 25.3 and 66.3 percent, respectively. That compares with PC growth rates of 10.4 percent for home sales and only 8.5 percent for business.

Looking at a breakdown of business growth, the Mac saw increases in large and very large businesses of 145 and 200 percent year over year, 90 percent in medium-sized businesses, and nearly 50 percent growth in smaller businesses.

Government sales of Macs were up 500 percent over the same period last year. While it could be argued these impressive-sounding gains are actually a better reflection of poor Mac enterprise presence in the past than of any current success, it could also be attributed to Apple’s primary business focus. If Apple wasn’t selling on the back end, it’s possible that was as much due to a conscious choice to focus on client Macs and iOS devices, as it was to a lack of interest on the part of enterprise customers.

Citing the same report by Charles Wolf, AppleInsider expanded on the continued dominance of the Mac in profits. For the U.S. market, Apple is now the “profit share” leader, accounting for 29.4 percent of every dollar in home computer sales. In comparison, HP accounted for 20.6 percent, while Dell was at 12.9 percent, but there is a caveat. The profit numbers are based upon an average selling price (ASP) from IDC that is higher than that reported by Apple. According to Charles Wolf, “if Apple’s average selling price were substituted for IDC’s, the Mac’s dollar share of the U.S. home market would fall to 20.0 percent, slightly less than HP’s share.” IDC is “standing by” its ASP estimate, but even if the lower estimate is used, it’s important to note that both HP and Dell sold more than twice as many PCs as Apple did Macs for the period.

But unlike HP, Dell, and other PC makers struggling with saturated markets and fighting netbook manufacturers like Asus and Acer, Apple is poised for even greater growth and profit next year. According to Wolf, Mac sales are experiencing “multiple halo effects” from iPods, iPhones, and now iPads. Perhaps 2011 will be the year the Mac breaks 5 percent market share worldwide, but even if not, it will be another record year for Apple computer sales. Back to the Mac indeed.

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