Apple’s Unrelenting Mac Attack On The PC Market

  • Posted: 30 October 2011 03:14 PM

    Apple’s Unrelenting Mac Attack On The PC Market

    One of my goals for this article is to get the quarterly sales data published for easy reference by independent analysts and investors.

    One important point from the narrative:

    “Although the $21.783 billion in revenue generated from Mac sales in FY 2011 represented only 20.12% of the company’s revenue total, it exceeded Apple’s total reported revenue of $19.315 billion in FY 2006, just five years before. In FY 2011, revenue generated from Mac sales exceeded the revenue generated from iPad sales by $1.425 billion.”

    The data is also available in an easier to copy form on my blog post.

         
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    Posted: 30 October 2011 06:47 PM #1

    I think we saw the return of the iPhone and iPad Halos in combination with the attractiveness of MacBooks, MacBook Airs and iMacs.  It bears repeating that Windows is looking oh so tired.

    Yes, I can do useful things on a PC, but would I enjoy it as much ?  Say, how about them Bears.

         
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    Posted: 30 October 2011 07:03 PM #2

    Great article.

    The Mac will be demoted by _revenue_ importance to third very soon, but the Mac is no iPod.  It’s been growing steadily all this time and the Mac team isn’t about to pack it in and leave the company’s future to iOS.

    PCs to be like trucks?  Someday maybe, but I know a company or two that still sells a BUNCH of trucks.

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    Posted: 30 October 2011 09:36 PM #3

    Mav - 30 October 2011 10:03 PM

    Great article.

    The Mac will be demoted by _revenue_ importance to third very soon, but the Mac is no iPod.  It’s been growing steadily all this time and the Mac team isn’t about to pack it in and leave the company’s future to iOS.

    PCs to be like trucks?  Someday maybe, but I know a company or two that still sells a BUNCH of trucks.

    We have iTunes moving past the iPod and the iPad moving past the Mac in revenue, Apple’s ability to reenvision itself and successfully enter new markets is the key.  Apple pretty much owns the profits in mobile computing and continues to expand their share in all the categories that they compete.  It is baffling that they can be so successful.  As DT so clearly highlighted the Mac is a shining light in a dismal PC market place.  The PC market has reached the point of being a commodity and Apple provides value.  I recently had my iMac go on the fritz, and it gave me a chance to experience the Apple difference first hand.  All the manufacturers use the same contract manufactureres so all the windows commodity PC skimp on subcomponent quality and customer service to save a few bucks.  Anyway my video card went bad and my Apple care had just expired, but the Apple genius ordered up the parts and said Apple would cover the cost one time good deal, so rather then being pissed that my POS computer just died, I walked away saying my next computer will be another Mac because Apple knows when I’m having computer problems I don’t want to talk to some person in a foriegn country over the phone and waste an hour of my time trouble shooting when I know the damn thing is broke.

         
  • Posted: 30 October 2011 10:18 PM #4

    pats - 31 October 2011 12:36 AM

    I walked away saying my next computer will be another Mac because Apple knows when I’m having computer problems I don’t want to talk to some person in a foriegn country over the phone and waste an hour of my time trouble shooting when I know the damn thing is broke.

    Well said!

         
  • Posted: 31 October 2011 01:33 AM #5

    I have a hard time swallowing the iPod is declining argument. I think that the iPhone is an over-the-top iPod and functions in the role of the iPods of yesteryear (of delivering one’s portable personal music). This artificial distinction between iPods and iPhones into separate categories is at the core of the problem. Just because the iPhone has a cellular radio added on to an MP3 player, it gets thrown into a completely separate category, and is counted in a separate mutually exclusive bucket. The fact of the matter is that people are not slowing down in their purchases of MP3 players, (the original category that the iPod was placed under), they are buying their MP3 players with value added functions - such as networking, mobile calling, and task engines (a.k.a. apps) built into them. To say that the the iPod/mp3 market is declining is obfuscating the fact that the iPhone is an MP3 player that may be counted as the growth of that market.

    Once again, people are trying to shoehorn Apple’s products into traditional categories - (traditional separate categories) - MP3 players exclusive of cell phones, exclusive of GPS units.  The problem comes when trying to analyze marketshare trends - growth or decline patterns. These become obfuscated by the demand that you can’t count one device in more than one category, so the iPhone “may not be counted as an MP3 player” even though people are using iPhones as MP3 player replacements.  This backwards view of products masks Apple (and AAPL)‘s explosive growth - “oh no, iPods are in decline, the sky is falling, the sky is falling”, rather than celebrating and giving proper credit to Apple (and AAPL) for seeing astronomical growth of the iPod/mp3 player “market segment”.

    Should we be categorizing Apple’s devices based on an abstract and arbitrary demarcation of features lists (the presence of a cellular radio on an MP3 player dictates that the product may not be counted as an mp3 player), or should we measure continued growth in a category based on what device people use to replace the earlier device?

    Apple’s tendencies to straddle multiple market segments (and multiple industries) with a single product (or a single company) makes it inherently misunderstood by those who can only view it according to old paradigms and outdated categories.

         
  • Posted: 31 October 2011 07:35 AM #6

    Tovar - 31 October 2011 04:33 AM

    I have a hard time swallowing the iPod is declining argument. I think that the iPhone is an over-the-top iPod and functions in the role of the iPods of yesteryear (of delivering one’s portable personal music). This artificial distinction between iPods and iPhones into separate categories is at the core of the problem. Just because the iPhone has a cellular radio added on to an MP3 player, it gets thrown into a completely separate category, and is counted in a separate mutually exclusive bucket. The fact of the matter is that people are not slowing down in their purchases of MP3 players, (the original category that the iPod was placed under), they are buying their MP3 players with value added functions - such as networking, mobile calling, and task engines (a.k.a. apps) built into them. To say that the the iPod/mp3 market is declining is obfuscating the fact that the iPhone is an MP3 player that may be counted as the growth of that market.

    Once again, people are trying to shoehorn Apple’s products into traditional categories - (traditional separate categories) - MP3 players exclusive of cell phones, exclusive of GPS units.  The problem comes when trying to analyze marketshare trends - growth or decline patterns. These become obfuscated by the demand that you can’t count one device in more than one category, so the iPhone “may not be counted as an MP3 player” even though people are using iPhones as MP3 player replacements.  This backwards view of products masks Apple (and AAPL)‘s explosive growth - “oh no, iPods are in decline, the sky is falling, the sky is falling”, rather than celebrating and giving proper credit to Apple (and AAPL) for seeing astronomical growth of the iPod/mp3 player “market segment”.

    Should we be categorizing Apple’s devices based on an abstract and arbitrary demarcation of features lists (the presence of a cellular radio on an MP3 player dictates that the product may not be counted as an mp3 player), or should we measure continued growth in a category based on what device people use to replace the earlier device?

    Apple’s tendencies to straddle multiple market segments (and multiple industries) with a single product (or a single company) makes it inherently misunderstood by those who can only view it according to old paradigms and outdated categories.

    You have a great point.  My first gen iPhone is currently in use as an iPod touch.  I chuckled just a bit seeing your name and the arguments you were making.  Cesar Tovar was a Minnesota Twin when I was growing up and became the second player in Baseball history to play all 9 positions in a single game in 1968.  The iPhone is the Cesar Tovar of consumer electronics with one distinction.  It seems that with each additional function added, it sends another player home.

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    Posted: 31 October 2011 11:47 AM #7

    Great post Tovar

    I think you post should go into a new category regarding iPods and iOS market share.

    Everyone is focused on iPod sales decrease when we should focus on iOS volume increase over the year.  Last quarter iOS device sales grew by 40%.  If TC believes that the iPad market will surpass the PC, then combining all iOS devices together and measuring growth compared to PC market leaves you speechless.  One just needs to look 5 years into the future and realize that the Mac market share increase is only a flank attack on the PC, but the frontal attack is being carried out by iOS.

         
  • Posted: 31 October 2011 02:52 PM #8

    omacvi - 31 October 2011 02:47 PM

    Great post Tovar

    I think you post should go into a new category regarding iPods and iOS market share.

    Everyone is focused on iPod sales decrease when we should focus on iOS volume increase over the year.  Last quarter iOS device sales grew by 40%.  If TC believes that the iPad market will surpass the PC, then combining all iOS devices together and measuring growth compared to PC market leaves you speechless.  One just needs to look 5 years into the future and realize that the Mac market share increase is only a flank attack on the PC, but the frontal attack is being carried out by iOS.

    A $25 billion dollar a year business and the prospect of 20 million Macs sold in the current fiscal year suggests more than a “flank attack.” The assault is front and center.

         
  • Posted: 31 October 2011 02:55 PM #9

    Tovar - 31 October 2011 04:33 AM

    Apple’s tendencies to straddle multiple market segments (and multiple industries) with a single product (or a single company) makes it inherently misunderstood by those who can only view it according to old paradigms and outdated categories.

    The Apple iPod touch represents over 50% of iPod unit sales and is holding up the unit sales for the line. There’s no disputing the dramatic decline in the unit sales of single-use digital music players.

    The iPod touch is an iOS-based device and it’s a bit of a misnomer to consider it as a member of the iPod line. Outside of the iPod touch, the market for iPods is evaporating before our eyes.

         
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    Posted: 31 October 2011 03:30 PM #10

    DawnTreader - 31 October 2011 05:55 PM

    The iPod touch is an iOS-based device and it’s a bit of a misnomer to consider it as a member of the iPod line. Outside of the iPod touch, the market for iPods is evaporating before our eyes.

    The iPod touch isn’t so much an iPod as it is an iPad nano.

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    Posted: 31 October 2011 03:33 PM #11

    Tovar - 31 October 2011 04:33 AM

    Should we be categorizing Apple’s devices based on an abstract and arbitrary demarcation of features lists (the presence of a cellular radio on an MP3 player dictates that the product may not be counted as an mp3 player), or should we measure continued growth in a category based on what device people use to replace the earlier device?

    It might not be a complete replacement, but how many people today are accomplishing the majority of their daily computing tasks on an iOS device? People may still need a traditional computer for certain tasks, but they will be budgeting most of their computing device spending for iPhones & iPads.

    Let’s say a consumer spends $1,000 for a PC or Mac and keeps it for 5 yrs. But they will spend $500 for an iPad every 3 yrs. and the equivalent (taking into account the subsidy built into their cell phone contract) of $600 for an iPhone every 2 yrs. That’s an average budget of $200/yr. for traditional-PC and $467/yr. for post-PC.

         
  • Posted: 01 November 2011 12:01 AM #12

    Drew Bear - 31 October 2011 06:33 PM

    It might not be a complete replacement, but how many people today are accomplishing the majority of their daily computing tasks on an iOS device? People may still need a traditional computer for certain tasks, but they will be budgeting most of their computing device spending for iPhones & iPads.

    I do need to update The iPad Chronicles, but back in March I posted this entry titled: My Work PC Has Become A Fork.

         
  • Posted: 01 November 2011 07:14 AM #13

    Congratulations to Robert. His article got referednded by MacDailyNews (MDN), HERE. I’m sure that will generate a ton of hits for his article.

         
  • Posted: 01 November 2011 10:58 AM #14

    FalKirk - 01 November 2011 10:14 AM

    Congratulations to Robert. His article got referednded by MacDailyNews (MDN), HERE. I’m sure that will generate a ton of hits for his article.

    I’m glad the article is getting some mileage. For Apple to sustain 50%+ revenue growth in FY 2012 and 60%+ eps growth, the Mac must have another strong year.

    But here’s something to consider: The Mac’s strong performance will be due in part to new Mac owners drawn to the platform by customer satisfaction with iOS-based devices.

         
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    Posted: 02 November 2011 01:47 PM #15

    DawnTreader - 01 November 2011 01:58 PM

    The Mac’s strong performance will be due in part to new Mac owners drawn to the platform by customer satisfaction with iOS-based devices.

    Back to the Mac. Reverse halo effect. What comes around, goes around. Virtuous cycle.