iPad Cannibalization of Mac Sales

  • Posted: 25 January 2011 01:54 PM #16

    iOSWeekly - 25 January 2011 06:17 AM

    I think the drop in desktops is mostly due to people upgrading from the mac mini to the more expensive MacBook or MacBook air.

    If that is indeed the case, then that’s a big net positive for apple.

    I don’t think the Mac mini has much to do with it. The drop in desktop sales (FQ1 ‘10 was a strong quarter for the iMac) has much to do with the refresh schedule of the iMac, the refreshed MacBook Air and the continuing appeal of the MacBook Pro.

         
  • Posted: 25 January 2011 02:00 PM #17

    wab95 - 25 January 2011 10:27 AM

    We appear to be searching for that ideal balance between maximum capacity in the least essential mass. This may be why iPads are hurting PC (not just netbook) sales, and is not a process that began with the iPad, but with laptops (certainly in my field of work). I would argue that this is less about ‘cannibalisation’ than it is about evolution in form and function.

    I’ve said for quite awhile the Apple iPad is less of a product that “replaces” a PC and more a product that transcends the PC paradigm.

         
  • Posted: 25 January 2011 09:42 PM #18

    DawnTreader - 25 January 2011 06:00 PM
    wab95 - 25 January 2011 10:27 AM

    We appear to be searching for that ideal balance between maximum capacity in the least essential mass. This may be why iPads are hurting PC (not just netbook) sales, and is not a process that began with the iPad, but with laptops (certainly in my field of work). I would argue that this is less about ‘cannibalisation’ than it is about evolution in form and function.

    I’ve said for quite awhile the Apple iPad is less of a product that “replaces” a PC and more a product that transcends the PC paradigm.


    Agreed.

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  • Posted: 25 January 2011 11:11 PM #19

    DawnTreader - 24 January 2011 06:22 AM

    This issue was addressed during Tuesday’s conference call with analysts. I’ll be looking for clues over the next few quarters. But something that struck me during my first analysis of the FQ1 revenue results is that all other product segments (other than the Apple iPad) maintained the same combined 40%+ revenue growth in FQ1 that was realized in FY2010.

    This suggests preliminarily that cannibalization of other Apple product sales is quite limited, if it’s occurring at all. Mac unit sales growth in FQ1 was about 23% versus the 31% pace of growth realized in FY2010. However, domestic and global PC sales growth may have slowed as well.

    I’m currently looking closely at the trends in Mac unit sales. In the December quarter Mac ASPs rose sequentially from $1,254 to $1,313, reversing a downward trend. If there is some cannibalization of Mac sales it’s most likely at the low-end of the Mac market.

    Again, there isn’t sufficient data to draw any conclusions and I’ll be watching for clues over the next few quarters. But overall, the iPad appears to be having little to no effect on overall revenue growth when all other revenue sources are combined.

    I’d like to bring the discussion back on topic by referencing the original post.

    The 37% YOY in increase in Mac laptop sales is an early indicator the Apple ipad is not having a dampening impact on Mac laptop sales. The 1% decline is desktop unit sales may relate to the cycle of iMac updates and the overall slowing of PC sales.

    Again, more data is needed and I’ll be watching Mac unit sales quite closely over the next few quarters.

         
  • Posted: 26 January 2011 01:25 AM #20

    DawnTreader - 26 January 2011 03:11 AM

    The 37% YOY in increase in Mac laptop sales is an early indicator the Apple ipad is not having a dampening impact on Mac laptop sales. The 1% decline is desktop unit sales may relate to the cycle of iMac updates and the overall slowing of PC sales.

    Again, more data is needed and I’ll be watching Mac unit sales quite closely over the next few quarters.

    My post is going to be based more on speculation than data. Sadly we have very little data to work with.

    I saw a poll once that suggested that sales of the iPad were almost evenly divided between WiFi only and WiFi + 3G devices (which I’ll just call “3G from now on.) Although I don’t think the correlation is one-to-one, I do believe that iPad owners are split between those who are using the iPad as a stand alone device and those who are using it to supplement their computer. I think the WiFi only users can be further sub-divided.

    Group A: WiFi only users who never owned a computer before. These are the kids, the housewives and the seniors. They didn’t cannibalize Macs because they are first time computer owners.

    Group B: WiFi only users who wanted a simple, inexpensive computing solution. I doubt these people were Mac owners either. They were netbook owners or the owners of bargain notebooks. They didn’t cannibalize Macs because they never owned and never would have owned a Mac.

    Group C: WiFi or 3G users who use their iPads as a supplement to their Computers. I have a two part take on them.

    In the short run, I doubt they cannibalized Mac sales because they got the iPad as a supplement to their existing computer, not as a substitute for their existing computer.

    In the long run, I think that these users might move their primary devices away from notebooks and towards desktops, the theory being that they use their desktops for heavy-duty work and their iPads for everything else. Accordingly, I think that the iPad will start to cannibalize heavy-duty MacBook computers that were being used as all-in-one desktop substitutes.

    Group D: Finally, there will be people (and a lot of them) who will buy the MacBook Air. I doubt they will buy both a MacBook Air and an iPad. They’re just too close in functionality. In many ways, I expect the MacBook Air buyers to act exactly like the people in group “C”, above. The MacBook Air is a fantastic travel computer, but many will want to have a heavy duty desktop computer, as well.

    In conclusion, I think that iPads (and MacBook Airs) will create a donut effect, with people moving to the low and high ends of the computer arena and leaving a virtual “hole” in the middle of Apple’s computing lineup.

         
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    Posted: 26 January 2011 01:37 AM #21

    iOSWeekly - 25 January 2011 06:17 AM

    I think the drop in desktops is mostly due to people upgrading from the mac mini to the more expensive MacBook or MacBook air.

    If that is indeed the case, then that’s a big net positive for apple.

    The mac mini has evolved/inflated into a rather mediocre product line on a cost/performance basis. It really needs an update and price drop sooooooooon!

      cheers to the longs
        johnG

         
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    Posted: 26 January 2011 01:43 AM #22

    The Mac Mini has been less than acceptable in my eyes for bang for the buck for the majority of desktop buyers that I know.

         
  • Posted: 26 January 2011 03:44 AM #23

    Tetrachloride - 26 January 2011 05:43 AM

    The Mac Mini has been less than acceptable in my eyes for bang for the buck for the majority of desktop buyers that I know.

    The mini hath its virtues.

    Colleagues have used them in their clinical offices as low-end patient/clinic interface terminals, or for patient/staff access of information. They are great for this.

    People have used them in their homes as a spare computer for the house, guests, etc. Again, great for this.

    Another thing they have been good for is as a audio/video file sink or repository for the house. In fact, we are buying one for that purpose to use principally with Apple TV access via wifi. Prior to the new Apple TV, in fact, many people used the mini as a surrogate.

    I have even seen them transported from point to point as a semi-portable computer for people/teams that need a desktop solution on arrival, but for reasons of security/configuration/etc, find it simpler to carry the hard drive and plug it into an onsite monitor.

    On the whole, they can be a relatively inexpensive and versatile solution.

    Apologies to DT for wandering off-topic.

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    Posted: 26 January 2011 09:40 AM #24

    These are all good reasons, wab. 

    For the friends that I helped, their PC’s monitors were of such awful condition that I didn’t want to burden the friends with old stuff. 

    Only 1 person went with a Mac Mini and that was good.

         
  • Posted: 13 February 2011 03:22 PM #25

    DawnTreader - 24 January 2011 06:22 AM

    This issue was addressed during Tuesday’s conference call with analysts. I’ll be looking for clues over the next few quarters. But something that struck me during my first analysis of the FQ1 revenue results is that all other product segments (other than the Apple iPad) maintained the same combined 40%+ revenue growth in FQ1 that was realized in FY2010.

    This suggests preliminarily that cannibalization of other Apple product sales is quite limited, if it’s occurring at all. Mac unit sales growth in FQ1 was about 23% versus the 31% pace of growth realized in FY2010. However, domestic and global PC sales growth may have slowed as well.

    I’m currently looking closely at the trends in Mac unit sales. In the December quarter Mac ASPs rose sequentially from $1,254 to $1,313, reversing a downward trend. If there is some cannibalization of Mac sales it’s most likely at the low-end of the Mac market.

    Again, there isn’t sufficient data to draw any conclusions and I’ll be watching for clues over the next few quarters. But overall, the iPad appears to be having little to no effect on overall revenue growth when all other revenue sources are combined.

    DT, we’ll know more after the March quarter results are released. I’m thinking in some foreign markets the presence of the iPad may actually boost Mac sales.

         
  • Posted: 13 February 2011 04:38 PM #26

    Sparky - 13 February 2011 07:22 PM
    DawnTreader - 24 January 2011 06:22 AM

    This issue was addressed during Tuesday’s conference call with analysts. I’ll be looking for clues over the next few quarters. But something that struck me during my first analysis of the FQ1 revenue results is that all other product segments (other than the Apple iPad) maintained the same combined 40%+ revenue growth in FQ1 that was realized in FY2010.

    This suggests preliminarily that cannibalization of other Apple product sales is quite limited, if it’s occurring at all. Mac unit sales growth in FQ1 was about 23% versus the 31% pace of growth realized in FY2010. However, domestic and global PC sales growth may have slowed as well.

    I’m currently looking closely at the trends in Mac unit sales. In the December quarter Mac ASPs rose sequentially from $1,254 to $1,313, reversing a downward trend. If there is some cannibalization of Mac sales it’s most likely at the low-end of the Mac market.

    Again, there isn’t sufficient data to draw any conclusions and I’ll be watching for clues over the next few quarters. But overall, the iPad appears to be having little to no effect on overall revenue growth when all other revenue sources are combined.

    DT, we’ll know more after the March quarter results are released. I’m thinking in some foreign markets the presence of the iPad may actually boost Mac sales.

    You have a good point. I’m looking forward to the March quarter results to see if there is indeed a positive impact on Mac sales in some markets due to the presence of the Apple iPad.

         
  • Posted: 16 February 2011 09:26 PM #27

    If I read this story correctly, what DT said about the iPad actually increasing Mac unit sales in some markets may come true.

         
  • Posted: 17 February 2011 01:24 PM #28

    Sparky - 17 February 2011 01:26 AM

    If I read this story correctly, what DT said about the iPad actually increasing Mac unit sales in some markets may come true.

    That’s real possibility.  grin

    I’m waiting on March quarter numbers for more unit sales information concerning rising Mac unit sales in the iPad era.

         
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    Posted: 17 February 2011 07:14 PM #29

    This doesn’t address the iPad effect, but this chart shows that it’s not just about unit sales figures.

    “The wide disparity between the Mac’s unit and dollar shares in the home market,” Wolf writes, “reflects the fact that Mac prices have remained relatively constant while the prices of Windows PC have progressively deteriorated.”

    What did Tim say? If this is cannibalization, it feels ok?

         
  • Posted: 17 February 2011 10:11 PM #30

    ?The surge in Mac sales in the business market coincided with the introduction of the iPad in the second quarter of 2010,? he said. ?In less than a year, the iPad has been deployed or piloted in 80 of the Fortune 100 companies, and it?s reasonable to assume the device has invaded smaller businesses at a similar pace.?

    Put your crazy thinking hats on.

    What if Apple’s long range goal is to replace MacOSX with iOS on ALL devices (including Macs).

    Corporate America accepts/approves iOS because of the iPhone and iPad, then Apple switches OSs on the Mac.  Developers that have been using Apple’s tools don’t have to rewrite their apps because Apple’s tools are OS agnostic, and just like that Mac apps run on iOS, and Macs are corporate approved.

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