What hurt are iPad sales putting on Macs?
At last week's earnings call with financial analysts, there was only one question about Macintosh. One. It was about Mac sales being down, although not by much. But there was an interesting admission from Apple — that, yes, iPads are cannibalizing MacBook sales.
According to the Apple executives, the company sold "just under 4 million Macs", which was a 2 percent decline from the same quarter a year ago. The actual number was 3,952 units, down from 4,061 units sequentially (and Apple's big quarter).
Tim Cook, Apple CEO, said desktop sales were strong following last quarter's launch of new iMacs. At the same time, laptop sales were down, he noted. Apple doesn't break out the numbers in desktops and notebooks, nor the sales in market geographies.
He was asked about the overall PC/Mac market in the era of tablets, and whether it is high prices or the iPad that's inhibiting or cannibalizing Mac sales, respectively. Here's his answer from the Seeking Alpha transcripts:
I think the reason that we were down last quarter, we were down 2 percent as you had mentioned. The market for PCs are incredibly weak. IDC said that the market for the March quarter was down 14 percent year on year, which is the largest decline that I remember from being in this industry for a long time.
At the same time, we sold almost 20 million iPads, and it's certainly true that some of those iPads cannibalized some Macs. I personally don't think it was a huge number, but do I think it's some. And I think probably the larger thing at least for the, maybe not so much on the Macs side, but on the PC side, it's cheaper, probably extending their upgrade cycles.
That said, I don't think this market is a dead market or bad market by any means. I think it has a lot of life to it. We are going to continue to innovate in it. We believe that if anything, the huge growth in tablets may wind up benefiting the Mac, because it pushes people to think about the product they're buying in a different manner, and people may be even more willing to buy a Mac where today than may be buying a PC.
And so, we're going to continue making the best personal computers. Our strategy is not changing. And we feel really good about it. We delivered some incredible innovation last year with Retina display with the MacBook Pro, an incredible thin and light package, and we've got some more great stuff planned. So this is an area we're continuing to invest in.
Interesting: The iPad is cannibalizing sales somewhat, he admitted. However, Apple appears to believe that this erosion isn't coming so much from current Mac owners; rather, more from its PC customers, who might be considering switching to the Mac.
In addition, Apple sees a future computer upside to iPad sales, with an emphasis on the Mac. I believe in this potential as well. People are figuring out that they need different computing devices for different tasks, which is a more mature market approach.
For example, I recall folks who said: "I don't need a PC. The iPhone is all I need in a computing machine." And following the arrival of the iPad, they said the same thing about the iPad. Nonsense; this isn't a sensible approach to productivity and computing. We want the right tool for the job, iPhone, iPad, and Mac.
Yes, we can do amazing and useful things on iPads and iPhones. But for a real content creation platform, you want a powerful, multi-windowing, multi-tasking computing environment. And if you're going to pick such a machine, then customers will want a quality experience, which they get from a Mac.
You have to laugh at the timing, but last week, the Soluto system analyst company released a report that noted that the MacBook Pro is the most reliable platform for running Windows. Gotta love it.
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