Forget the Recession: Mac Sales Soar!

March 19th, 2008

As Apple’s stock remained down in the dumps, more over the general state of the economy than any particular problem with the company, the latest survey from NPD Group shows that sales of new Macs are on a roll. According to published reports, Apple has garnered a 14% share of the U.S. retail market, up from a mere 9% last year.

What’s most interesting in this survey is not just the fact that Apple is outpacing the PC industry by a huge margin. Contrary to the belief that sales of desktop Macs were down in the dumps, this product segment actually showed a 64% unit growth over last year, compared to 20% for the entire industry. Note-book growth, possibly fueled by high demand for the new MacBook AIr, reached 67%, compared to 11% for the rest of the industry.

Then again, who wants to buy one of those ugly PC note-books when you can get a Mac, right?

What’s more interesting is that Apple is also getting a quarter of the total revenue. This is largely due to the fact that they don’t play in the cheap PC space, where profits are slim or non-existent. Now don’t get me wrong. I’m not saying that Macs are expensive, and I continue to dispute the claims that Apple has BMW-pricing compared to Ford-pricing for the rest of the industry.

If you actually compare the standard equipment on any Mac, at any price category, with a comparably-built PC from any first-line manufacturer, Apple is highly competitive. Sometimes the Mac costs a little more, sometimes less. In the workstation category, price out a Dell Precision Workstation with Intel’s new Xeon “Harpertown” processors and then put the same options on a Mac Pro. You’ll be amazed!

Now if Apple would price RAM upgrades more realistically, and reduce the costs of their displays, they’d fare even better. I just don’t see why they haven’t upgraded their displays in several years, and continue to price the products above equal or superior models from Dell and other companies.

Before I go on, though, I should point out that the NPD survey only covers retail sales. They don’t include online, although Apple’s results in that space most likely aren’t too shabby either.

As to the rest of the planet, Apple is still stuck in the low single digits, apparently, but that doesn’t mean you won’t see higher figures there too when this quarter’s financials are revealed next month.

When it comes to the rest of Apple’s product line, though, the jury is apparently still out. Analysts are claiming that iPod sales are going to be flat or slightly below last year. Possibly, though the reduction in the price of the basic iPod shuffle and the introduction of a new model with more Flash memory might help. The iPhone may be doing quite well, however, with other published reports claiming that the 16GB version is a little hard to come by. Indeed, Apple’s online store is quoting a 5-7 day wait for that model. So suggestions that iPhone sales might be lagging seem a tad premature, or maybe just plain wrong.

In light of this development, I wonder when Michael Dell might take back his statement of a decade ago that Apple should just go out of business and send refunds to its stockholders. In light of Dell’s own problems selling product and delivering quality support these days, maybe the reverse is true.

However, I’m not really down on Dell. Yes, I think their current TV commercials, where some no-named band does a perfectly awful imitation of a bad Beatles song, are downright annoying. But you see, Dell has some good stuff in its product portfolio, particularly when it comes to displays. I’ve worked with both their 24-inch and 30-inch models, and they provide superb pictures. In fact, I’m using the latter now with my Mac Pro, and couldn’t be happier, except for the fact that Dell now has a newer, better version — and I’m awaiting the promised review sample.

So where does Apple go from here? Are they soon going to beat the big box movers, which include Dell and HP? Not likely anytime soon. You see, those companies sell a lot of product to the enterprise market, a place where Apple has made only faltering steps.

On the other hand, now that the iPhone will soon be a genuine player in that segment, how long will it take for the Mac to follow?

Indeed, what will Apple’s product portfolio and market share be like in, say, 2010? And does Microsoft have something to fear? You bet they do.

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13 Responses to “Forget the Recession: Mac Sales Soar!”

  1. Dana Sutton says:

    I agree with Gene about everything except the bit about Apple charging too much for RAM and monitors. With so many cheap third-party alternatives available I can’t imagine this issue is very critical for determining Apple’s sales. In December I picked up a 2 Gb RAM kit for my first-generation Mac Pro for 95 bucks and for Christmas I bought my wife a very nice monitor for under 300.

  2. Dana, you can get RAM from third parties for far less. If you order memory from Apple, the price is considerably higher than what you’d pay for top-tier RAM from the likes of RamJet, Crucial, etc. And Apple sources its memory from the same suppliers.

    Price out a 16GB Mac Pro via Apple’s built-to-order system, for example, and you’ll be shocked.


  3. MichaelT says:

    There’s no such thing as a “bad Beatles song.” 😉

  4. All right, fair enough. How about “less compelling”? 😀


  5. Ilgaz says:

    MS just doesn’t get afraid of Apple and OS X, they are also afraid they could be wrong about Unix all these years.
    OS X is a true desktop Unix system (even certified just like AIX!) and yet MS users switch to OS X because “it is simpler to use”. That is a nightmare at Redmond for sure.
    Also, Linux distros like Ubuntu copy the OS X concepts (or lets say, get influenced), KDE which is mix of Windows like interface with a professionally written Framework (Qt) is there…
    Companies already started to wonder “What if we put a giant Linux/BSD/OS X server to server room and don’t care whatever our clients use if it supports open standards?”
    The usability was issue, now almost comically, a mix for BSD Lite+Mach/NeXT/OpenStep OS is called “easier”. If just Linux guys woke up and take a look at OpenStep…

  6. Dana Sutton says:

    My point exactly, Gene. Everybody knows that you have to be out of your mind to buy RAM from Apple and that it is much cheaper on the street, so presumably few folks are discouraged from buying them for this reason. At least this is straightforward for the Mac Pro, but situation gets a bit tricker in the case of models where the user can’t install his own RAM, because then he has pay a qualified technician to do the job (visiting mine involves a 45-min. drive each way, which is probably very convenient in comparison to the situation of some users) and suffer the consequent downtime. On the other hand, presumably large organizations that purchase such Macs in bulk have an in-house guy capable of doing the job.

  7. Terrin says:

    I doubt Apple is actually trying to encourage you to buy Ram from it. Many of it’s retail partners make very little off the sale of the computer, but do make money off selling extras like RAM. This probably is a way to appease its partners.

  8. RB says:

    Yes, overpriced RAM and Monitors hurts the brand, not just the sales of those particular items. RAM prices especially leave a bad taste in the mouth of the purchasers. There is no “option delete” for it like there is for a separate display. The overpriced monitors plainly also adversely affect iMac and laptop sales and the buying public’s impression of pricing of them.

    The reason that Apple does not make an impression on the “Enterprise Market” is that they simply do not try. The rigid inflexibility of Apple hardware configuration mitigates against business interest as they simply are unable to buy hardware which is configured the way they want it. It is like the burger commercials. Some places serve you a burger their way no matter what you want and some places make it to order. If you want hardware the way you want it don’t call Apple.

    In a post Steve Jobs era this might change, but not while he is still in charge. The only real hope for a serious business impact would be something like Intel buying both Apple and SUN and turning SUN into the business division and Apple into the consumer division. The OSes, or at least the UIs, could be unified to a sufficient extent that the benefits would be marketable.

    In a post Steve Jobs world Michael Dell might also lead the way to selling outside boxes with OS X installed. Goodness knows he wants to. Apple is a business, whether some people like to admit it or not, and there are very successful businesses which are not restricted to hardware sales.

    P.S. There are Beatles songs badly performed by others, but no known “bad songs”. Some are simply classics and some are not. 😉

  9. Mac sales soar! Indeed. Amazing that Apple’s desktop sales are up 55% over last year whereas for others it’s -5%.

  10. And they were telling us, once, that desktops were passe.


  11. RB says:

    I was in the Apple store yesterday for a Genius Bar appointment (having forgotten that it was both Easter weekend and Spring Break). It was incredible. iPods, iPhones and other things were just “flying off the shelves”. When I asked, the Genius said it had been a very good week for them. I think that they had called everyone in to deal with the crowd as I have never seen that many employees in the place since the grand opening.

    If there was anything remotely approaching this at the other Apple stores, this could be a very good quarter indeed.

  12. MisterRon says:

    There’s no such thing as a “bad Beatles song.”

    How about “I Don’t Want to Spoil the Party” and “Sour Milk Sea”?

  13. MichaelT says:

    I think I’ll go with Gene’s “Less compelling” tag. They weren’t all brilliant. 😀

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