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Can You Believe Third-Party Apple Sales Estimates?

Just this week, the estimates came out about how well Apple did in January. According to Piper Jaffray, which has been frequently known to get their figures wrong, Apple is on track to sell between 2 million and 2.2 million Macs for the first three months of 2009, compared to 2.3 million for the same period last year.

Now in this shaky economic climate, I suppose you could say that’s pretty good news. Other PC makers should do as well, and, despite the first drop in Mac sales in quite a while, if that sales rate sustains itself, Apple will probably earn a decent profit. All well and good.

But can you believe Piper Jaffray?

Well, according to the NPD Group, which I regard as having a pretty good degree of credibility, Apple’s retail sells fell 6% in January.

However, it seems that Apple is notorious for exceeding the expectations of analysts in their quarterly statements. “Beat the Street” is a common refrain repeated, even if the stock market doesn’t always approve of the actual numbers.

In any case, you have to wonder just where Piper Jaffray is doing its surveys to come up with its numbers. Do they examine the sales at Apple’s own retail chain? Well, not exactly, since Apple doesn’t just hand out that information. What about NPD? Well, according to analyst Stephen Baker, whose been a guest on The Tech Night Owl LIVE, “This is the first time in a long time that Apple has underperformed the market.”

All right, folks, I’m not the sort of person to require that the news about Apple always be favorable. With sales tanking in nearly every market segment, except, perhaps, for McDonalds and Wal-Mart, I suppose there’s nothing particularly unusual about Apple’s current predicament. Things could even get worse, since there’s no telling whether the current recession has bottomed out yet or has a ways to go.

Certainly when just paying for the necessities, such as housing, utilities and food, may be difficult, it’s not reasonable to expect people would still be as willing to shell out upwards of $1,000 to buy a new Mac. That they are still doing so in reasonable numbers is surely a tribute to Apple’s stellar success in convincing customers that the Windows way is the wrong way, and that they have a better answer to personal computing for regular people.

It’s also not the first time Apple has encountered a sales downturn. More to the point, even if sales at the end of the quarter are still below last year’s levels, it doesn’t mean that profits will turn to losses. Apple, courtesy of their COO Tim Cook, maintains extremely tight controls on inventory. If sales of particular products aren’t going as well as expected, they will simply turn down the spigots so they aren’t saddled with lots of unsold product. That means there’s still a possibility for reasonable profits when the financials are released.

Even if profits are near-nonexistent, don’t believe anyone who says that Apple is poised to return to the dark days of the mid-1990s, where red ink nearly did the company in. They have over $28 billion in the bank (and we hope it’s a bank that’s still solvent), and they could certainly access those funds if necessary to cover a deficit. Indeed, they could survive for quite some time in this fashion without having to go into debt.

Indeed, Apple remains debt free, and in this particular questionable economic climate, that’s a great place to be. More to the point, they have a market cap that’s way higher than all the American auto companies combined. You could certainly call Apple prosperous.

In any case, the next question is whether Apple is just going to wait out the financial downturn or wow us soon with more trend-setting products in an attempt to fuel sales. This takes us to an area that’s way beyond my pay grade. I couldn’t begin to suggest whether a major media event with some cutting-edge gear would be sufficient to improve sales way beyond where they’d be otherwise.

My suspicion, however, is that Apple isn’t going to cut back on new product introductions, despite the situation. Steve Jobs has said, in the past, that the company will always innovate out of recessions, as they did several years back in a lesser economic downturn. There’s little doubt they’re going to do so this time too.

The only issue is, of course, when the next new product announcement will come, and what sort of products will be presented. It could simply come in the form of a basic press release, which might suit for a simple iMac or Mac mini refresh. But with Apple, I’m not about to do any guessing.

But I will continue to explore those sales reports, even if they don’t necessarily reflect the entire picture. You’ll just have to wait till April for the answers.