Apple announced a number of impressive figures in its latest earnings call: record profits, record revenue, record iPhone sales. However, the company made a slightly different kind of mark in the record books as well. The Mac's long-standing run of consistently out-growing the PC industry as a whole finally came to an end. It's a streak that's been going on for years at this point; even this past October, when Apple reported a mere 1 percent growth in Mac sales, it still trounced the 8.6 percent decline IDC reported for the PC industry as a whole.
The newest numbers? A 21.2 percent drop in Mac sales from the same time last year, while IDC's latest figures have the PC industry shrinking just 6.4 percent in comparison — but the culprit may be the same in both cases.
Average becomes acceptable for Apple
During the earnings call, Apple CEO Tim Cook noted a big chunk of the decrease was due to the iMac; sales for that product line alone shrank by some 700,000 units. Supply restraints were to blame, and the fact that it was not even possible to buy an iMac from Apple for over a month during the quarter, but Cook didn't give the impression that a massive bounce-back was in the cards for the rest of the lineup. In fact, he touted the merely on-par performance of the company's laptops as a sign of strength. "If you look at our portables alone," he said, "they match IDC's projections of market growth." It's a marked shift for a company that once boasted how it was outgrowing its competitors.
Part of it, Cook admitted, is that the market for PCs is not as strong as it once was — and that the company's own iPad is likely eating into some PC sales. (In contrast to the Mac, Apple sold 22.9 million iPads — up from 15.4 million the same quarter last year — and that's with the company not being able to meet demand on the iPad mini.) If it all sounds familiar, it's because Cook sounded a similar refrain in last year's earnings call — but with a slightly different tone. "There is cannibalization of the Mac by the iPad," he said last January, "but we think there's more cannibalization of Windows PCs by the iPad — we love that trend."
The logical outcome of Apple's computer-as-appliance philosophy
The latest results, however, suggest that the iPad's impact on computer sales may have very well become an equal-opportunity offender. Computer owners that once flocked to the Mac could simply be bypassing traditional computers altogether when looking for more accessible devices. It's the logical outcome of Apple's computer-as-appliance philosophy — users ditching trucks for the metaphoric cars Jobs once touted — and the company has certainly never been shy about obsoleting one of its products with another. Jobs famously pointed to the iPhone as a way of cannibalizing the iPod before a competitor was able to, and yesterday Cook continued to express belief in that strategy.
"On the iPad we have the mother of all opportunities here."
"I see cannibalization as a huge opportunity for us," he said. "On the iPad we have the mother of all opportunities here — the Windows market is much, much larger than the Mac market." However, Cook also seemed to think that the iPad could somehow drive new Mac sales while also eating away at them. "When someone buys their first Apple product," he said, "they end up buying another one." It's the so-called "halo effect" that got iPod owners into Apple Stores and buying Macs in the first place, and Cook thinks the iPad will eventually bring about the same phenomenon.
The mixed messaging is indicative of a company that is trying to assert itself while simultaneously reacting to the post-PC landscape it helped create. It's the kind of challenging terrain that has seen established software companies turn to hardware, online service providers flirt with designing devices, and where Apple's expansion into different product categories may end up being the greatest threat to the Mac of all.