The Macintosh Revenue Paradox

  • Posted: 29 January 2011 04:46 PM

    My latest missive at Eventide.

    Snippet: In the recent December quarter, Macintosh CPU sales produced revenue of over $5.4 billion yet represented just over 20% of Apple’s reported revenue. To put the Mac’s unit’s revenue performance in a broader perspective, in FY2011 Macintosh CPU sales will produce revenue at or above $21 billion and revenue from Mac sales will exceed Apple’s revenue from all sources as recently as FY2006. This paradox of record revenue and declining percentage of revenue contribution to Apple’s overall results is due of course to the popularity of Apple’s iOS-based products such as the Apple iPhone and Apple iPad.

    It really is only in comparison to the current success of the Apple iPhone and Apple iPad that the continuing success of the Mac could be overshadowed.

         
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    Posted: 29 January 2011 06:14 PM #1

    My 27” iMac casts its own shadow very nicely. 

         
  • Posted: 29 January 2011 10:33 PM #2

    The halo effect of iOS devices can cast quite a shadow of its own.  grin

         
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    Posted: 30 January 2011 12:28 AM #3

    DawnTreader - 30 January 2011 02:33 AM

    The halo effect of iOS devices can cast quite a shadow of its own.  grin

    Maybe aapl has a halo effect also. I was accumulating aapl many years before I purchased my first Apple product!  I finally bought a MB just to see if the hype was ...........  well more than just hype. Fast forward a couple years and our household now has 6 macs, an ipad, a touch, and a handful of ipods.  :-D

      cheers to the longs

         
  • Posted: 30 January 2011 03:49 AM #4

    johnG - 30 January 2011 04:28 AM
    DawnTreader - 30 January 2011 02:33 AM

    The halo effect of iOS devices can cast quite a shadow of its own.  grin

    Maybe aapl has a halo effect also. I was accumulating aapl many years before I purchased my first Apple product!  I finally bought a MB just to see if the hype was ...........  well more than just hype. Fast forward a couple years and our household now has 6 macs, an ipad, a touch, and a handful of ipods.  :-D

      cheers to the longs

    I’m sure AAPL has a halo effect on product sales as well. No better way to protect one’s investment than to invest in the products offered by the companies in which we expect a positive share price return.  grin

    I have a relative that worked at an Apple retile store while in college. He told me he couldn’t count the number of times customers told him they had wished they had purchased the stock or were planning to purchase the stock.

         
  • Posted: 30 January 2011 07:20 PM #5

    A quick note: I was a bit surprised by the rise in Mac ASPs in the quarter to levels close to one year ago. This may portend a continuing flight to the Mac among PC buyers investing in better-equipped product.

         
  • Posted: 31 January 2011 12:30 PM #6

    DawnTreader - 30 January 2011 07:49 AM

    I have a relative that worked at an Apple retile store while in college. He told me he couldn’t count the number of times customers told him they had wished they had purchased the stock or were planning to purchase the stock.


    My stock broker tried to get me to at least consider diversifying the amount I wanted to apply to Apple stock, now over a decade ago when I purchased it. At that time, putting the entire lump sum into Apple alone was considered imprudent.

    Thanks, DT, for pointing out that the continuing rise of Mac sales performance can be lost sight of against the background of the general rise of Apple and its broader product/service arsenal.

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    wab95

         
  • Posted: 31 January 2011 05:35 PM #7

    wab95 - 31 January 2011 04:30 PM
    DawnTreader - 30 January 2011 07:49 AM

    I have a relative that worked at an Apple retile store while in college. He told me he couldn’t count the number of times customers told him they had wished they had purchased the stock or were planning to purchase the stock.


    My stock broker tried to get me to at least consider diversifying the amount I wanted to apply to Apple stock, now over a decade ago when I purchased it. At that time, putting the entire lump sum into Apple alone was considered imprudent.

    Thanks, DT, for pointing out that the continuing rise of Mac sales performance can be lost sight of against the background of the general rise of Apple and its broader product/service arsenal.

    The impact of rising Mac unit sales and the resulting contributions to revenue and earnings should not and can not be overlooked if the company is to sustain 40%+ growth in revenue for at least the next 11 quarters.

         
  • Posted: 31 January 2011 07:04 PM #8

    DawnTreader - 31 January 2011 09:35 PM

    The impact of rising Mac unit sales and the resulting contributions to revenue and earnings should not and can not be overlooked if the company is to sustain 40%+ growth in revenue for at least the next 11 quarters.

    I acknowledge the iPad’s Halo effect and the boost that the new line of MacBook Airs gave to Mac sales. Are there any other reasonable theories as to why Mac sales appear to be enjoying such a marked resurgence?

         
  • Posted: 31 January 2011 11:15 PM #9

    FalKirk - 31 January 2011 11:04 PM
    DawnTreader - 31 January 2011 09:35 PM

    The impact of rising Mac unit sales and the resulting contributions to revenue and earnings should not and can not be overlooked if the company is to sustain 40%+ growth in revenue for at least the next 11 quarters.

    I acknowledge the iPad’s Halo effect and the boost that the new line of MacBook Airs gave to Mac sales. Are there any other reasonable theories as to why Mac sales appear to be enjoying such a marked resurgence?

    Among the factors:

    Apple product halo effect

    More aggressive pricing

    Growing presence in the education markets

    Enterprise adoption

    The Apple retail store effect

    To name just a few…

         
  • Posted: 31 January 2011 11:20 PM #10

    I am not seeing a paradox.

    I am seeing a description of reality, albeit one that may have been difficult to predict 2 or 3 years ago.

         
  • Posted: 31 January 2011 11:35 PM #11

    DawnTreader - 01 February 2011 03:15 AM
    FalKirk - 31 January 2011 11:04 PM

    I acknowledge the iPad’s Halo effect and the boost that the new line of MacBook Airs gave to Mac sales. Are there any other reasonable theories as to why Mac sales appear to be enjoying such a marked resurgence?

    Among the factors:

    Apple product halo effect

    More aggressive pricing

    Growing presence in the education markets

    Enterprise adoption

    The Apple retail store effect

    To name just a few…

    Good list.

         
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    Posted: 01 February 2011 12:44 AM #12

    DawnTreader - 30 January 2011 11:20 PM

    A quick note: I was a bit surprised by the rise in Mac ASPs in the quarter to levels close to one year ago. This may portend a continuing flight to the Mac among PC buyers investing in better-equipped product.

    There was a LONG awaited refresh of the MP lineup. I’m sure that refresh and subsequent sales spike (I finally bought my MP) helped push the ASP higher.

      cheers to the longs
            JohnG

         
  • Posted: 01 February 2011 04:24 PM #13

    One thing I think will depress the mac percentage of total Apple revenue is the increasing Apple market in Asia/Pacific, where (from what I’ve read), the iPhone and iPad are very popular (probably because they fit better into the A/P lifestyle (small form factors).

         
  • Posted: 01 February 2011 09:57 PM #14

    David Stevenson - 01 February 2011 08:24 PM

    One thing I think will depress the mac percentage of total Apple revenue is the increasing Apple market in Asia/Pacific, where (from what I’ve read), the iPhone and iPad are very popular (probably because they fit better into the A/P lifestyle (small form factors).

    David: At 25% revenue growth the Mac’s percentage contribution to total revenue will continue to fall through FY2011. Still, the Mac and Mac-related revenue activity may reach $25 billion this fiscal year.

         
  • Posted: 01 February 2011 10:28 PM #15

    DawnTreader - 02 February 2011 01:57 AM

    At 25% revenue growth the Mac’s percentage contribution to total revenue will continue to fall through FY2011. Still, the Mac and Mac-related revenue activity may reach $25 billion this fiscal year.

    Is there any way to break down sales, revenue and profit figures for the notebooks and the desktops? Or are they always lumped together?