What hurt are iPad sales putting on Macs?

What hurt are iPad sales putting on Macs?

Summary: It's a short-list question on the minds of analysts: how much are tablet sales cannibalizing the sales of full-featured computers? Here's Apple's take on the matter.

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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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Topics: Apple, iPhone, iPad, Laptops, Operating Systems, Windows

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78 comments
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  • David Morgenstern your too old to be an apple fanboy

    Soluto system is like zdnet, another apple paid agency. why the hell they compare a 500$ laptop to 2000$ mackbook.
    Odel Babor
    • Odel Barbor, you are too young to know how to spell

      :-)
      ForeverSPb
    • You have a point about the comparison

      For $500 all you could possibly expect is a heap of junk.
      Laraine Anne Barker
      • Not according to the "study".

        For less than $500 you get a system that's within .06 of a "Soluto" point of the 13" MacBook.
        ye
        • actually

          the Soluto ranking was rigged in favour of SSDs in that it factored in stuff like boot times which has no relevance to reliability.
          I posted a recalculated rankings based on only reliabilty scores published by Soluto themselves and two Acer machines beat the Macbook Pro.
          warboat
    • Read the link before you write

      The Soluto report was based on reliability defined several ways, but speed wasn't one of them. Read the link which was a published story by Ed Bott.
      Luke Skywalker
  • Apple's only option is to further the iO.S.ification of O.S. X

    Microsoft has an advantage over Apple because they have 1 unified ecosystem for all their services, Apple must learn from this. Macintoshes are only a small percentage of the market while iO.S. is more widely used, they must fuse those 2 into 1 unified O.S.

    Apple is being stupid by thinking that ''Mobile'' is different from what's on your desk, and more people would buy Macintoshes if they would resemble what they love & know (iO.S.).
    Văn Minh Nguyễn
    • Thank goodness

      Thank goodness Apple still have the sense to differentiate how Desktop behave is different from mobile devices

      Look at the negative responses from people who hate Metro on the Desktop
      ThinkFairer8
      • Launchpad

        I know how they feel, I can't stand Launchpad on the Mac.
        DJL64
        • I actually like that

          Initially I was concerned that Launchpad would always be there, like the full icon screen of iOS. But on my machine (at any rate), Launchpad only shows up if you do the four finger gesture on the trackpad. Then it is super easy to find programs.
          Mac_PC_FenceSitter
          • I agree

            Just recently I started using LaunchPad on my MBP and I've actually come to like it -- it's a nice shortcut to launch something that isn't in the dock.

            But I also agree with the folks who say that we work inherently differently with desktops/laptops than with tablets and phones. I would never want my Macs to lack multiple windows or require touch for everything.

            Apple should continue to port ideas both ways, where they make sense, but not necessarily force us into a one-way-fits-all solution ... because they rarely do.
            imalugnut
          • Numbers

            Perhaps if I used it more, it might grow on me. However, I don't find it easy to find something in five pages of 7x5 grids.
            DJL64
        • Re: You hate Launchpad

          Then, don't use it. That simple.

          Did you know OS X comes with full blown PostgreSQL RDBMS? Don't need it, don't use it. It also comes with a *ton* of other software, which if you don't need/want -- you simply don't use.

          None of this gets in your way though. And this is *the* key to Apple's success.
          danbi
          • I don't

            I don't use it, but then the clue about that was in my initial post. Not entirely sure what your point is. I like most other things about OSX, and I'm familiar enough with the system to know that it comes with lots of useful things, some that I use and some that I don't. I'm not entirely sure what your point is.

            I don't like cabbage either, so I don't eat it. Are you now going to tell me that nature comes with all sorts of brassicas to pick and choose between?
            DJL64
      • seems only tech writers

        And trolls dislike windows 8.
        TD_2003
    • Looks like MS is doing well..

      Looks like MS is reaping bountiful benefits of integrating all their platforms, doesn't it? That's why Windows 8, Windows RT, and Windows Phone 8 are doing so well. Give me a break!
      Tiggster79
  • I was expecting a lot worse

    Giving how poorly PC sales are doing and how expensive Apple PCs are.
    AleMartin
  • Love how Dave Morganstern gets all excited about Macs...

    Here's someone who is probably gitty about some company who is making a boat load of money and doesn't give a care about Dave. Its similar to how cities go ga-ga over their NFL team, stumbling to build them huge stadium and give them giant tax breaks all in the hopes that someday they will love us back.

    Dave, no one at Apple cares about you. That's what Microsoft people have known for years. Microsoft people are pragmatic and sensable. That's why they don't pay $2100 for a laptop when $350 will do the job. But keep on writing Dave. Maybe one day someone with that big shiney Apple logo will read your article and them, with a big bright smile, and toss you a jersey.

    I think I'm getting choked up here.
    A Gray
    • You get what you pay for

      Some of us want more than just a system that will do the job, we want a system that is reliable, beautiful, and a pleasure to use. I've been a PC user since 1989 and converted to a Macbook Air 2 years ago. I wouldn't even consider going back. Sure, if you can't afford a $1,200+ laptop, there is nothing wrong with getting an inexpensive PC, but for those of us who have a choice, the Mac is a no brainer.
      Tiggster79
      • I agree...

        with you that you get what you pay for. But Apple is not the only one making high end hardware. Since you mentioned the MacBook Air, there are options from other vendors that are as good or better than a MacBook Air. For example, the Lenovo X1 Carbon has a 14" screen, a better spill resistant keyboard than the MBA, constructed in carbon fiber and passes many military tests. It's a little more expensive than a MBA, but it looks like it's worth it. So the "choosing a Mac is a no brainer" is not true at all. BTW, I'm not saying that the MBA or Apple products are bad. They have some excellent products, but the same applies to other vendors products.
        dvm