Apple has just posted another record quarter for its final fiscal fourth quarter. While much of the spotlight attention will be shined on iPad and iPhone sales a careful examination of its Mac unit growth shows that the Mac division is healthy. Another way of putting this would be to say that prior to the iPod and its famous “halo effect” if Steve Jobs could have promised Wall Street that the Mac would grow at sequential rates as nice as these investors would have been psyched!
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There is no doubting that Apple’s Mac division is being upstaged by its new era product lines (with the exception of the iPod division which is slowing down in growth) but one only needs to look at the bigger picture to see it’s all okay with Steve & Company precisely because the “halo effect” from iPhone in particular keeps pushing Mac sales up at a healthy rate. Of course that rate may be slowing as the iPad begins to both produce a “halo effect” and a “cannibal effect.” (more on that later).
So how healthy are we talking about?
Mac Unit Growth
Let’s start with the quarter to quarter sequential growth. In this quarter Apple’s Mac units grew at just over 12 percent, which is a healthy growth rate. This was the result of shipping more than 400,000 Macs than the previous quarter. Mind you, just a few years ago 400,000 Macs per quarter was approximately one forth the amount of all Macs in that quarter.
- Apple’s Mac Unit Growth is growing and if the Cupertino-based company follows its usual sales pattern they are sure to set a new record during the holiday quarter with more than 4 million Macs.
Still, the iPad does appear to be slowing Mac growth down. Apple’s Mac growth in the previous sequence of quarters (Quarter 2-3) was 18 percent, with the company shipping actually 430,000 more Macs that quarter than the one previous.
And each year Apple typically experiences less Mac demand in Quarter 2, the one immediately following the holiday shopping season. In both 2009 and 2010 Mac shipments declined sequentially by about 12 percent from the holiday quarter (Quarter 1 for Apple) and the quarter following it.
Year to Year Growth Better
On a Year to Year basis Apple’s Mac units grew by 27.8 percent this quarter. This is a very healthy growth basis for a company whose “legacy” product line matters and will continue to benefit from Apple’s newer iOS product lines. Previous to this quarter year-over-year Mac units have been growing at a steady 33 percent each quarter. It will be interesting to see if Apple can improve on this figure for the upcoming holiday quarter.
And bear in mind that Apple’s Mac growth rate on a yearly basis at 27.8 percent is nearly double the projected 15 percent PC growth basis for 2010 as reported early in September. So while Mac growth may be slowing a tad because of iPad it still outshines PC growth rates by a long shot.
Closing Thoughts
Apple’s iPhone clearly shines this quarter with essentially doubling its shipment of units on a year-over-year basis. Much remains to be seen of how the Mac will fare against two phenomena now: the “halo effect” of iPod/iPhone and the “cannibal effect” of the iPad.
But analysts and pundits shouldn’t worry too much about this. Most customers don’t walk into the Apple store and say, “do I want to buy a Mac or an iPad?” Quite a few are actually Mac owners and are walking in and saying, “I’ll update my Mac later, I want to buy an iPad today because that’s what’s new.” And some, are walking in and buying both a Mac and and iPad.
Finally, as the iPad takes off and surpasses Macs in both revenue and units, expect Apple to continue to merge technologies of its newer iOS devices with the Mac products, thereby blending and blurring the distinction between the two. iOS device owners will continue to see the Mac as an extension of the Apple iOS products they own and love today and will continue to migrate over away from Windows.
Our projection for Mac shipments in the upcoming holiday quarter is 4.4 million units, based on a 14 percent sequential growth rate quarter to quarter. Yes, we are bullish!