One of the bigger surprises of Apple’s(s AAPL) earnings call Wednesday was the revelation that Mac sales declined. Compared to the same quarter a year ago when it sold 5.2 million Macs, this holiday season Apple sold 22 percent fewer, or 4.1 million. It’s the first time in over six years that Apple’s Mac sales have not grown faster than the overall PC market, which shrunk six percent during the same quarter.
The PC industry has been having a rough go of it for a while with the rise of tablets, but up until now Apple had stayed largely immune. One of the questions Apple’s results asks is whether the Mac is going to follow in its PC brethren’s footsteps soon. The short answer: it’s a bit too early to tell.
The quick, easy initial assumption about why Apple sold fewer Macs during the holiday quarter was that the iPad and new iPad mini were favored by buyers, either because they were newer more portable or more cheaper computing platforms than the pricier Mac.
It’s likely part of it. CEO Tim Cook explained Wednesday how much he loves cannibalization — as long as it’s self-inflicted.
“We know iPad is cannibalizing the Mac, but that doesn’t worry us. On iPad in particular, we have the mother of all opportunities here because the Windows market is much larger than the Mac market. It’s clear it’s already cannibalizing some. I’ve said for three years now that I believe the tablet market will be larger than the PC markte at some point, and I still believe that.”
His enthusiasm for self-cannibalization makes some sense, but it doesn’t look that great on the balance sheet. Macs sell for a high price and the declining sales — whether they truly were attributable to cannibalization — mean Apple lost out on over a billion dollars: it made about $5.5 billion on sales versus $6.6 billion a year ago. Where it can get concerning for Apple investors is if the company is trading those $999 and higher MacBook and Mac sales for $329 to $829 iPads.
But in this case, it seems probable that one of the big issues this quarter was availability. The two new models of iMacs that Apple introduced in October weren’t ready for sale until late in the quarter: late-November and mid-December, respectively. It’s Apple’s own fault for not having its flagship iMacs ready in time to take advantage of sales in the quarter. But it’s also a reasonable excuse — for now.
With just one quarter of dipping Mac sales to go off of, it’s hard to make a pronouncement about whether the Mac’s growth days are over. We’ll need at least another quarter of shrunken sales before we can start legitimately wondering if the Mac is losing steam.