Too soon to tell if it’s the beginning of the end for the Mac

24 Comments

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.

24 Comments

Fred Stein

The ASP went up.
The best Macs were not available until the end of the quarter.
The quarter was 7% shorter, so the decline is 15% not 22%.
Cannibalization or kids vs parents? Xmas shopping, Kids rule, pre-empting big ticket items for mommy and daddy.
Let’s see a FY 13 to Fy 12 Mac units, and ASP, compares. Must wait. Dads and Grads sales in June show up when Apple reports in July.

Dave Kliman

who cares about the balance sheet? they have like $150B in the bank. they have the luxury of making long term decisions, which is what every company should do.

Woody

Come on people, 4.1 million Mac’s in 3 months and you’re asking if this is the beginning of he end? Seriously? He media have a lot to answer for. No wonder share prices take a hit when people push this sort of commentary out.

Christian

At least here in germany you could’nt buy an 27″ iMac since june/july ’12!

I do not know what problems Apple hast faced in the production of the new iMacs, but they could have sold a ton of “old” 27″ models if they’d done so!

frd75

My two year old Macs Macbook pro and Mac mini, may well be the last Macs i buy. Why? Because I am not a big fan of form over function. I will not buy a Mac like the new iMacs that are made uniquely thin at the expense of expandability. i will not buy a Mac that replaces a graphics card with Intel’s chipset so that the case can be thiner. In a word I want to buy a computer not half of a computer and not a $2000 iPhone.

Secondly, when I buy a computer, I expect the ability to set that computer up the way I want it. I don’t want my hard drive full of apps i don’t use and don’t want. when I try to remove an app that came with the OS, I don’t want to be told the lie that Chess or face time are non removable parts of the OS.

Bloatware has been a part of the Windows experience for years and it has now become part of the Mac OS. Why do we need , for instance, launch pad when a simple list in the dock provides the same usability.
If some people like it, fine but why am I required to have it if I do not want it

Nicholas Paredes

You really are missing the point of the Launcher, and the bigger question is when the iMac will have touch. As expand ability has decreased, the Mac market has increased. Others say that this is not listening to customers when it is simply not listening to the much smaller market.

Windows 8 is not bad. You may like Windows 9…

eldernorm

frd75,
“Bloatware has been a part of the Windows experience for years and it has now become part of the Mac OS. Why do we need , for instance, launch pad when a simple list in the dock provides the same usability.”

Apple is looking at both hardware and software. And yes, there are a number of things that I find I never use. But gee.
try buying a new car with out an engine.
Or taking the Ford engine out of your Mustang and putting in a Chevy engine…. You can do it but ….. not really.
Or buying a car with out an air conditioner,,,, and adding an aftermarket one… a real pain and it looks bad.

See in todays world, you make the best design you can and press on. Tinkering with your stuff ….. cars… computers,,,, pads,,,, cell phones.. is pretty much going the way of the horse drawn wagon.

Its a different world Fred and we either need to get on or watch it pass us by.

Just a thought.

John

While the Mac market may get smaller, it is guaranteed to stay in existence as long as there is an iPad and iPhone. Why? Simply because app developers have to use Macs to fill the App store with.

Shameer Mulji

Don’t forget to add creative professionals that rely on heavy duty apps like Final Cut Pro, Photoshop, Premier, etc. to accomplish their work. They definitely need the horsepower of Macs. As SJ said in his interview at All D Conference – for the vast majority of computing users “cars” are in, “trucks” are out but that doesn’t mean trucks will disappear or will never be needed. They’ll just be a niche, not a mainstream, market.

Roger J Vela

Erica, the Mac won’t go away anytime soon. Even if the mobile revolution is decreasing sales among consumers, it is not a significant portion that are ready to dump their Macs and go all mobile. Even if the time came when such a thing occurred, another significant portion of Mac’s sold are purchased by creative professionals across many industries. One last point is Apple’s own culture. The Mac is the personal pride and joy of Apple even if it doesn’t sell so hot anymore. When Apple was on its knees in the 90’s, it’s the one product line that they embraced and focused on. The Mac is here to stay for a long long time.

Nicholas Paredes

Perhaps you’ve noticed the fact that iOS is OS X. Maybe you’ve also noted the app launcher! Apple seems reluctant to take the step to build a bridge across these two platforms, but it already exists.

In the future we won’t need mobile devices to act independently, but processors and platforms to collaborate seamlessly. When OS X launched, I in fact said as much in an email to S. It just takes a long time to get there.

We all wish Apple would make the leap. I keep eyeing that Modbook, but without touch, I found my desire waining. But, an iPad that when docked becomes more like Mac OS is really my dream device.

Matt Eagar

Technologies rarely disappear completely, but instead decline for a long time. There will be no demise for Microsoft, Dell, HP, or the Mac, but the growth days are clearly gone for these companies

realjjj

It was mostly iMacs,other factors would be one less week than last year,big picture and higher ASP due to the high res screens MacBooks.. All in all nothing too special. apple needs new AIr , more aggressive pricing for high res and it would be enough to keep the numbers stable,at least.
If you want to ask something ask if ipad is dead.It might just be,depends a lot on what kind of mix they had in Q4. If it was 15mil big ones and 8mil Minis it’s bad ,if it was 17+6 it’s still bad,q1 could be 10+8 at best and q2 less – q2 last year was 17 mil but now it could be less and a lot less revenue because of mini . So apple needs ipad 5 in march-june or the thing will flatline.A higher end mini at 400$ ,with the old mini at 300$ would help too.If they do mess up launch times this year, it’s gonna get problematic.
Android small tabs are getting a huge help from pricing and from huge phones.5-6 inch phones force apps to work well on 7-8 inch screens too.And if it works on 7-8 inch there is less to go to scale to 10 inch.
Another factor are bigger tablets,Sony launched a 10.1 incher at sub 500 grams, and this should enable them to make a 11.6-12 inch at 600 grams,if they keep the bezel thin enough and the price low it would be a valid product – ofc Apple can go there too but they would have software problems adding another resolution, and the pricing would be problematic.

iwatchamacallit

“We left the quarter with significant constraints on the iMac. And we believe—we know—that our sales would have been materially higher if those constraints would not have existed. We tried to tell people this on the conference call in October; I think I said that we would have significant constraints on iMac. But I recognize to some folks, this may be a surprise.” http://www.macworld.com/article/2026141/in-his-own-words-tim-cook-on-apple-earnings-and-more.html

Doug

Not having the iMac during the crucial holiday quarter was a huge misstep by Apple and one that was covered up by the mammoth revenue from iOS. I guess the new design posed manufacturing challenges, but I think they probably should have kept the previous edition for holiday.

I finally saw the new iMac on recent trip to apple store. It was really nice design. I had read all the “it is not really that thin” as the picture in the ad, and while true, it really does not capture how nice the design is. Once they get these filling the channel, they will sell plenty.

Carl

I am not surprised with the disappointing Mac sales numbers. Apple has decided to put all its newest advances on their SSD Macbook Air lines and ignored the HD based market. The problem with SSDs, despite their many advantages, is that the are expensive, small in capacity and impossible to upgrade. As a long time Macbook Pro user with data files larger than 500G this makes no sense. So, I will not upgrade and I have seen friends do the same.

don

My 2008 Mac Pro is still going strong, so why would I buy another Mac? And you can be sure I am not alone.

A touch Mac? Don’t be ridiculous! We already have iPads.

bArt

When you focus on $ instead of customers as Apple has done for a couple of years now (walled gardens? user control?) then a decline in loyalty is inevitable. This is predictable and dare I say inevitable for any company who think that they are bigger than their customers, in Apple’s case, even daring to tell the customers we know what you need before you do! Pride (much?) cometh before the fall…

eldernorm

BArt,
“When you focus on $ instead of customers as Apple has done for a couple of years now “… er I am curious just where you got that idea…. Reading Dell blogs again?? Maybe Samdung ads against those Mac fans???

Apple products tend to get better at the same cost. Sorry that Apple does not produce “cheap” stuff, but that is not their style. Try Android sellers.

“Walled garden”, yep, you been reading too many blogger articles by tech-less wonders.

Just a thought,

Joe Wood

I think the more interesting trend to watch will be how much Apple invests into OSX in the future. Moving OSX so that it’s more closely aligned to iOS is a huge engineering challenge – and it maybe just not worth it. Instead they may just decide to upgrade iOS so that it can better handle desktop class applications (new input methods etc.) and let OSX stagnate.

Green Gadget

Is it a mystery that all computer sales are down? We’re still in a killer recession and all Silicon Valley can think up is ultra thin laptops that cost a small fortune. Ipads aren’t functional enough to fully replace PCs yet and the price points of the current lines of new tech are outrageously priced. $700 iPhones and $900 Surfaces aren’t really anyone’s top priority these days. If PC vendors had their crap together and had touch products available the first day Windows8 launched they might have racked up some sales. In the meantime Apple is behind the curve again and had better launch a touch Mac Air or tablet Mac ASAP.

Raj Seshadri

Wrong-o.
Not touch, not on desktop.

Touch-based desktops are still not there, still not really wanted.

Killer apps need to exist alongside any new hardware features – this is why Apple is so good – they do both and partner with groups that specialize in stuff they can’t or won’t do.

Othewise you end up with Win8 – requiring touch-intuitive gestures that suck ass if you use a mouse or trackpad.

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