Mac Desktops continue sales decline

Discussion in 'Apple' started by Alan Browne, Oct 25, 2012.

  1. Alan Browne

    Alan Browne Guest

    Sales of Mac desktops were down, again, this past quarter.

    4% less than the 3rd quarter and a whopping 24% less than the quarter a
    year ago.

    Portables however saw an annual increase of 9%.

    Overall a 1% unit increase and 6% revenue increase for the Mac line at
    nearly $7B for the 4th quarter.

    OTOH, Apple will report an annual revenue, overall of $156B (!) and
    earnings per share of $44.15. (about 14:1 showing the current price is
    a hair low, but not much - but as a continuous growth the price should
    be higher.

    $123B cash on hand at the end of the 4th QTR. (Most offshore).

    $2.65 / dividend (again).

    Expect $52B revenue in 1st quarter this year - despite it being a
    "short" quarter (13 weeks).

    200M iOS devices sold in 1 year.

    18M Macs.

    Analysts indicate "bearish" attitude.

    Due to "new product" deluge, early margins will be low.

    Consider the price of the iPad mini to be aggressive (low margins).

    Deferred revenue recognition on sales (warranty?)

    Push costs down.
     
    Alan Browne, Oct 25, 2012
    #1
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  2. Not surprising; I'm sure there were many people like me waiting for the
    2012 models to be released.
     
    Michelle Steiner, Oct 25, 2012
    #2
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  3. Alan Browne

    Alan Browne Guest

    A valid point, but Mac desktop sales have been in decline for 3 or 4
    quarters now (see that -24% above). Tune in late January.
     
    Alan Browne, Oct 25, 2012
    #3
  4. Alan Browne

    JF Mezei Guest

    However, the decline is not as big as with competitors. So in a "glass
    half full" scenario, you can say that Apple is gaining market share in
    this declining market.
     
    JF Mezei, Oct 25, 2012
    #4
  5. A valid point, but Mac desktop sales have been in decline for 3 or 4
    quarters now (see that -24% above).[/QUOTE]


    Here are the figures for Mac desktop sales for the past seven quarters:
    <http://cdnmo.coveritlive.com/media/image/201210/phpSl8d61appleq412-macunits
    ..png>

    Q2 2011: 1,009,000,000
    Q3 2011: 1,155,000,000
    Q4 2011: 1,270,000,000
    Q1 2012: 1,479,000,000
    Q2 2012: 1,199,000,000
    Q3 2012: 1,010,000,000
    Q4 2012: 968,000,000

    So for five straight quarters, sales increased; it was only in the last two
    quarters where sales dropped; and those two quarters started just about a
    year after the last iMac update, about the time people started expecting
    the next revision, and therefore putting off purchasing them.
    That may not be as good an indicator as one would otherwise think.
    <http://9to5mac.com/2012/10/25/significant-shortages-on-imacs-for-the-holida
    y-quater-anticipated-by-tim-cook/>

    As we originally predicted, Apple is going be having some major delays and
    shortages for its new iMac lineup going into the holidays. Before the
    refreshed iMacs were unveiled at Apple¹s iPad mini event earlier this week,
    we thought the shortages might even mean the unveiling would be pushed
    back. While Apple did decide to unveil the new product publicly, Tim Cook
    confirmed today that the November and December release dates for the new
    models will mean significant shortages for the robust demand the company is
    expecting headed into the holiday season.

    Cook on the new iMac shortages and component constraints from today¹s Q4
    earnings call:

    ³In terms of iPad and iPhoneŠ I don¹t see a component shortage gating us
    for the quarter in the numbers that we¹ve given you and the guidanceŠ i
    think we saw some challenges there and feel good about our positionŠ in
    terms of general shortagesŠ on the iMac we¹ll be constrained for the full
    quarter in a significant wayŠ there will be a short amount of time to
    manufacturer and ramp those and i expect demand to be robustŠ we will have
    a significant shortage²
     
    Michelle Steiner, Oct 26, 2012
    #5
  6. Alan Browne

    Alan Browne Guest

    I hear Cook said something the other day along the lines that (in the US
    anyway) Macs were outgrowing everyone, but that was "all Macs" not
    desktops. There are likely qualifiers with that. And undoubtedly the
    RDF was on if not at Jobs force levels.
     
    Alan Browne, Oct 26, 2012
    #6
  7. Alan Browne

    JF Mezei Guest

    A message to Michelle:

    In a bid to help my struggling AAPL shares, I urge you to run to the
    nearest apple place of worship and buy not just 1 iMac, but multiple
    ones, and bring along all your friends so they too can buy iMacs.

    There are a couple of other AAPL shareholders who will be thankful, so
    don't do that just for me.

    And don't mean to put any pressure, but the well being of Apple (and its
    shareholders) rests on your buying 1 or more iMac ASAP :)
     
    JF Mezei, Oct 26, 2012
    #7
  8. Alan Browne

    Alan Browne Guest


    Here are the figures for Mac desktop sales for the past seven quarters:
    <http://cdnmo.coveritlive.com/media/image/201210/phpSl8d61appleq412-macunits
    .png>

    Q2 2011: 1,009,000,000
    Q3 2011: 1,155,000,000
    Q4 2011: 1,270,000,000
    Q1 2012: 1,479,000,000
    Q2 2012: 1,199,000,000
    Q3 2012: 1,010,000,000
    Q4 2012: 968,000,000

    So for five straight quarters, sales increased; it was only in the lasttwo[/QUOTE]

    No typos I assume?

    You're not reading those correctly: which is ALWAYS FROM THE PRESENT. So,

    i) for the last 4 quarters sales de-creased from 12.Q1 (highest in
    list) quarter to quarter.

    ii) Further, 12.Q4 was lower than the prior 6 quarters (in your list),
    and significantly less than the year prior quarter.

    I'll agree that the new Macs will satisfy pent up demand, including
    those holding off, and the numbers will look sweet for the next 2
    quarters. But the long term trend is towards notebooks. (Or even tablets).
    Everyone loves to be short unless it drives people to the competitor but
    them Mac users aren't like that.

    Also when anticipated shortages are claimed, there are the underlying
    numbers that have to be looked at. Are they forecasting another 12.Q1
    demand? Less? More? They can say "it's a challenge" (or not)
    depending on what they forecast.

    A good problem. But the underlying flight to powerful laptops also
    plays in.

    "We'll see." - Charlie Wilson's War.
     
    Alan Browne, Oct 26, 2012
    #8
  9. No typos I assume?[/QUOTE]

    Check the graph at the URL I supplied.
    Huh? Going forward from Q2 2011 to Q2 2012, sales increased; only in Q3
    and Q4 did sales decline; which means they declined for only two quarters,
    not the three or four quarters that you claimed.
    Yes, the trend is towards notebooks, but there has to be a plateau where
    desktop users will not switch to notebooks. There are those of us who do
    not have a need or use for a notebook computer, nor do we want them. Our
    mobile needs, if any, are satisfied with a tablet or even a smartphone.

    I think we may have reached that plateau.

    So long as Apple keeps making an all-in-one desktop, I'll keep preferring
    it to a laptop. I get a larger screen, faster processor, and more RAM for
    the buck.

    -- Michelle
     
    Michelle Steiner, Oct 26, 2012
    #9
  10. Alan Browne

    JF Mezei Guest

    Something to consider: life expectancy for notebooks is less than for a
    desktop. (since they are handled far more and have greater risk of being
    dropped, stolen, or vapourised by the xray machines at airport. If
    laptops don't last as long, then it means people replace them more
    often. And when you look at many of the non-apple laptops with plastic
    casings, they tend to not last very long and then people see the mac
    laptops as being more solid and better quality.


    The drop in desktop sales may not be due to reduced need for a desktop.
    It could simply because existing desktops have enough power to last many
    years so people replace them less often than they used to.
     
    JF Mezei, Oct 26, 2012
    #10
  11. Buy them yourself; put your money where your mouth is.
     
    Michelle Steiner, Oct 26, 2012
    #11
  12. Alan Browne

    Alan Browne Guest

    Check the graph at the URL I supplied.
    Huh? Going forward from Q2 2011 to Q2 2012, sales increased; only in Q3
    and Q4 did sales decline;[/QUOTE]

    See below.
    Read your numbers CORRECTLY which is ONLY FROM THE PRESENT looking back.

    11.Q4 1270
    12.Q1 1479 incr
    12.Q2 1199 drop
    12.Q3 1010 drop
    12.Q4 0968 drop

    That is 3 quarters of DECLINE quarter to quarter to THE PRESENT (not 4
    as I said earlier).

    And the last quarter (12.Q4) is LESS than all quarters 11.Q2 to 12.Q4.
     
    Alan Browne, Oct 26, 2012
    #12
  13. Alan Browne

    David Empson Guest

    Last year, Apple released new iMacs in May (quarter ended June) and Mac
    Minis in July (quarter ended September). Sales to the end of September
    2011 would have included a lot of people buying the new models.

    This year, Apple released new Mac Minis in October and won't be
    releasing new iMacs until November or December.

    Lots of people have been waiting for new models and holding back
    purchases, therefore desktop sales are markedly lower than normal in the
    September quarter.

    They will probably be somewhat lower than normal in the December
    quarter, due to the announcement and delayed release of the new iMac
    models. Mac Mini sales should be strong, but they will be less popular
    than iMacs.
    The portables were refreshed in June 2012, so lots of new model sales in
    the quarter ending September 2012.

    Last year, the most popular model (13" MacBook Pro) was updated in
    February and October, so the quarter ending September 2011 would be
    after the early rush on the February model and before the refreshed
    model.

    The MacBook Air was updated in July 2011 and June 2012, so would have
    similar "early demand" both years.

    I haven't gone and had a detailed look at the numbers for earlier years,
    but I expect this sort of pattern shows up almost every time the most
    popular models are released in different quarters from one year to the
    next.
     
    David Empson, Oct 26, 2012
    #13
  14. Wrong; you read going forward. If I sell more now than I sold then, that's
    an increase in sales. If I sell less now than I sold then, that's a
    decrease in sales.

    I did make an error, though, but not the one you said I did. From Q1 to Q2
    2012 was a drop, not an increase. So yes, it's a three-quarter drop, not
    two quarters as I had said.

    I can ascribe it only to this eye infection I have; it blurs my vision.
    But it has nothing to do with reading forward or backwards.

    (I have a follow-up appointment with the eye clinic on Monday morning. I
    hope this thing clears up soon because I can't wear my contacts until it
    does.)
     
    Michelle Steiner, Oct 26, 2012
    #14
  15. Alan Browne

    Alan Browne Guest

    Similar discussion with Michelle. In sum - we'll see - but I believe,
    overall, the desktop will continue to weaken overall, including shear
    numbers.

    12.Q4 was the lowest number of Mac desktops sold in the last 7 quarters
    (using Michelle's numbers I haven't dug in yet - maybe this w/e).

    The next quarter or 2 will be better for the reasons mentioned but I
    don't think it will hold beyond that.

    Before I buy a new iMac I want to know more about serviceability - esp
    by me.
     
    Alan Browne, Oct 26, 2012
    #15
  16. Alan Browne

    JF Mezei Guest

    Remember that many wintel owners would have delayed purchases because of
    the long winded launch of windows 8 that has taken forever. And remember
    there is a huge fleet of older machines still on XP waiting to be
    upgraded. Windows 8 may give the market a boost. How long and how big
    the boost will be is anyne's guess. But companies like HP and Dell is
    really hoping for something big here.

    And if Windows 8 ends up being a dud, Apple may be able to capture a
    number of windows users who are still at XP and would rather upgrade to
    a new mac than to go windows 8. (perhaps it is time for Apple to restart
    those Mac vs PC guy ads :)

    Big picture though, I suspect the desktop market has matured and is now
    in a replacement cycle without much growth. And between replacement
    cycles it is a given numbers will go down.
     
    JF Mezei, Oct 26, 2012
    #16
  17. Alan Browne

    Paul Sture Guest

    I could see them having some fun with those ads. :)
    I think you are right there. And corporate users who have already
    started a migration from XP will be heading for Windows 7, not Windows
    8, simply because it takes a lot of time to do a migration on this scale.
     
    Paul Sture, Oct 26, 2012
    #17
  18. Alan Browne

    Paul Sture Guest

    If you have ever looked at the instructions for replacing disks,
    batteries etc on ifixit.com or other sources, you will know how hard
    repairs can be when compared to a traditional desktop.
     
    Paul Sture, Oct 26, 2012
    #18
  19. Alan Browne

    Paul Sture Guest

    A few years ago I seriously thought that most of my future needs would
    be satisfied by laptops in preference to desktops, but now I find I have
    refreshed my desktops. Not least is the ability to expand existing
    systems rather than replacing with a newer, better model.
    Yep. There is also the Mac Mini to consider if you already have that
    nice large monitor. You get adjustable height that way too :)
     
    Paul Sture, Oct 26, 2012
    #19
  20. Alan Browne

    Alan Browne Guest

    Wrong? You cut out all the facts that show you are wrong and you say
    I'm wrong?

    To an economist, the past yields a certain truth.

    To a businessman, past performance has little bearing on future
    performance other than lessons learned. This is why financials report
    this year, this quarter v. the same quarter last year, the prior quarter
    and the prior year. Anything older than that is useless information
    because the future is never the past - esp. as exemplified by Apple's
    tremendous growth over the last 10 years.

    Repeat:

    11.Q4 1270
    12.Q1 1479 incr
    12.Q2 1199 drop
    12.Q3 1010 drop
    12.Q4 0968 drop

    That is 3 quarters of DECLINE quarter to quarter to THE PRESENT (not 4
    as I said earlier).

    And the last quarter (12.Q4) is LESS than all quarters 11.Q2 to 12.Q4.

    That is, over 7 quarters, the last was the least number sold.
    Do take care of that. Bad habit of running away. Regrettably,
    antibiotics are becoming less and less effective. Discuss with them how
    your contacts might be the vector (handling procedures).
     
    Alan Browne, Oct 26, 2012
    #20
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