“One of the big alleged disappointments of Apple’s otherwise stellar fiscal first quarter results was the company’s Mac shipments,” Larry Dignan blogs for ZDNet. “The issue: Apple shipped 1.6 million Macs in the quarter and that was short of the 1.75 million analysts were expecting. Of course, Apple’s outlook was weaker-than-expected, but many Wall Streeters were expecting that guidance anyway. That leaves Mac sales as a big reason why Apple shares are getting shellacked today.”
“Now it’s time for perspective. Those Mac sales were up 28 percent from a year ago and flat quarter over quarter. In a PC industry that’s showing growth of about 3 percent that’s pretty impressive,” Dignan writes.
Dignan reports, “‘Apple has achieved an approximate 2-5 million increase in the number of active Mac OS X users-and this while increasing blended average shipment ASPs on its CPU category by almost 10 percent versus last year,’ said ThinkEquity Partners analyst Jonathan Hoopes. That’s a significant point. Meanwhile, Hoopes also notes that what Apple didn’t say at Macworld–it didn’t talk tablet PCs, didn’t showcase new OS X features and stayed clear of any next-gen Mac notebook and PC designs. The hint: These things will come later this year to drive Mac sales. ‘We expect the next few months to contain a few special events where new software, services, and hardware will be announced,’ said Hoopes.”
Dignan reports, “On the conference call last night (see SeekingAlpha transcript), Apple chief operating officer Tim Cook was asked…about a quarter to quarter Mac sale decline.”
His answer:
We have an extremely strong educational business in the Q4 period that includes substantial institutional business, and that institutional business corrects significantly as we get into Q1. The sequential decline that we saw is something that is very seasonal in nature. Frankly, we were very happy to overall have the same number of total Macs that we had in Q4, because we expected that given the high level of institutional sales, including two very large one-to-ones that total 50,000 units, we had predicted the Mac to be down from Q4, and it is not.
Dignan writes, “Bottom line: Put those Mac sales in context before getting panicky.”
More in the full article here.
Sheesh! We expected the seasonal sequential decline in Mac sales so implicitly, that the panicky reaction by some to Q1 vs. Q4 Mac unit sales took us totally by surprise. That’s what we get for actually listening to Apple’s conference call and taking notes.
Thanks to Dignan for spelling it out so clearly. Some people are looking for any Apple weakness; if they can’t find anything, they seem to just make something up.
MacDailyNews Note: Apple’s recent earnings and unit sales information:
2004:
• Q1 (ended 12/27/03): revenue of $2.006 billion, net quarterly profit of $63 million, 829,000 Macs, 733,000 iPods
• Q2 (ended 03/27/04): revenue of $1.909 billion, net quarterly profit of $14 million, 749,000 Macs, 807,000 iPods
• Q3 (ended 06/26/04): revenue of $2.014 billion, net quarterly profit of $61 million, 876,000 Macs, 860,000 iPods
• Q4 (ended 09/25/04): revenue of $2.350 billion, net quarterly profit of $106 million, 836,000 Macs, 02.016 million iPods
2005:
• Q1 (ended 12/25/04): revenue of $3.49 billion, net quarterly profit of $295 million, 1.046 million Macs, 04.580 million iPods
• Q2 (ended 03/26/05): revenue of $3.24 billion, net quarterly profit of $290 million, 1.070 million Macs, 05.311 million iPods
• Q3 (ended 07/13/05): revenue of $3.52 billion, net quarterly profit of $320 million, 1.182 million Macs, 06.155 million iPods
• Q4 (ended 10/11/05): revenue of $3.68 billion, net quarterly profit of $430 million, 1.236 million Macs, 06.451 million iPods
2006:
• Q1 (ended 12/31/05): revenue of $5.75 billion, net quarterly profit of $565 million, 1.254 million Macs, 14.043 million iPods
• Q2 (ended 04/01/06): revenue of $4.36 billion, net quarterly profit of $410 million, 1.112 million Macs, 08.526 million iPods
• Q3 (ended 07/01/06): revenue of $4.37 billion, net quarterly profit of $472 million, 1.327 million Macs, 08.111 million iPods
• Q4 (ended 09/30/06): revenue of $4.84 billion, net quarterly profit of $546 million, 1.610 million Macs, 08.729 million iPods
2007:
• Q1 (ended 12/30/06): revenue of $7.10 billion, net quarterly profit of $1 billion, 1.606 million Macs, 21.066 million iPods
As for upcoming Apple special events, we hear such chatter in the rumor mill currently; we’ll let you know when Apple makes something official.
Related articles:
Gartner: Apple’s U.S. Mac shipments up 30.6% year over year – January 18, 2007
IDC: Apple’s worldwide and U.S. Mac shipments were each up roughly 30% year over year – January 18, 2007
Analyst: Apple’s holiday-quarter Mac sales were solid – January 18, 2007
Apple smashes Street, posts revenue of $7.1 billion and record net quarterly profit of $1 billion – January 17, 2007
Net Applications: Apple’s Mac market share continues rise, now at 5.39%, up 31% year-over-year – December 01, 2006
Apple’s Mac market share surges, up 35-percent year-over-year as growth accelerates – November 01, 2006
Analyst: Apple has ‘real shot at dramatically expanding Macintosh market share’ – October 31, 2006
Analyst: Apple Mac gains market share, the reason why is significant – October 26, 2006
IDC: Apple Mac attained 5.8% of U.S. market share in Q3 06 – October 18, 2006
Gartner: Apple Mac grabbed 6.1% of U.S. market share in Q3 06 – October 18, 2006
Gartner: Apple Mac grabbed 4.6% U.S. market share in Q2 06 – July 19, 2006
IDC: Apple Mac attained 4.8% U.S. market share in Q2 06 – July 19, 2006
One word to investors: BUY AAPL.
Mac n’ Cheese,
Dude, that’s two words. Good advice, though.
Investors Expectations my Butt!
Amazing. Mac sales growth was over 9 times higher than the industry average. It’s no wonder Mac marketshare is growing so fast. The release of Mac OS X Leopard will improve the Mac situation further, considering the lackluster release of Windows Vista. The release to comsumers is two weeks away, and I don’t hear any “buzz.”
Mac marketshare will be at 10% by the end of 2008.
“Mac marketshare will be at 10% by the end of 2008.”
Be careful what you wish for.
Technically AAPL isn’t a word, it’s a symbol.
B.S. Apple shares are down because options expiration is tomorrow.
Watch, on Monday they’ll bounce back HARD. I bought a pile of AAPL after hours this afternoon at $88.63.
“The release of Mac OS X Leopard will improve the Mac situation further, considering the lackluster release of Windows Vista. The release to comsumers is two weeks away, and I don’t hear any “buzz.” “
I hear buzz. The buzz I hear is that everyone should avoid installing Vista.
I hear buzz. The buzz I hear is that everyone should avoid installing Vista.
I hear Vista’s buzz too. It sounds like a wet fart.
Apple, OTOH, is just getting started. 2007 is already shaping up to be a great year. Their web site teaser was no bluff!
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That’s twice that someone has blamed Friday’s options expiration for the drop in AAPL. Could someone please tell me more about this? Like, ummm, a LOT more? Including how one finds out about such (apparently) significant dates?
Thanks in advance…
Des Gusting, both of those instances were me, I think. I happen to know because I owned AAPL calls that expire on the 19th. You can find this on finance.yahoo.com, by looking up AAPL and clicking on Options.
Or you could just remember that options expirations are always the third Friday of each month.
Options Expiration Explained (ignore the stupid “will you fill out a questionnaire pretty please” alert)
http://www.888options.com/help/faq/expiration.jsp?prt=etrade
So if options expire tomorrow, does that mean it will likely that APPL will go further down still, or up?
Hey, Mac n’ Cheese, are you an admin on this site or something? As you know, originally you wrote “BUY APPL”, and I posted “Shouldn’t that read, ‘BUY AAPL'”. Now your post is correct and mine is gone.
You’re not going to start ‘backdating’ your posts next, are you?
Some folks were disappointed with the Macworld keynote focus on only two new products, the apple tv and the iPhone, but I believe Apple will host several Special Events to announce some killer new products in 2007.
Speaking of AAPL, did you ever fart so hard you ended up in another zip code?
Amazing. Mac sales growth was over 9 times higher than the industry average. It’s no wonder Mac marketshare is growing so fast. The release of Mac OS X Leopard will improve the Mac situation further, considering the lackluster release of Windows Vista. The release to comsumers is two weeks away, and I don’t hear any “buzz.” Mac marketshare will be at 10% by the end of 2008. Technically AAPL isn’t a word, it’s a symbol. Apple shares are down because options expiration is tomorrow. Watch, on Monday they’ll bounce back HARD. I bought a pile of AAPL after hours this afternoon at $88.63.
I agree, all this focus on the iPhone is great, I can’t wait for SJ to pull another “nano” on us. That’s the last time people were really surprised by a product.
To “Sum Jung Gai”: Thanks!
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“Amazing. Mac sales growth was over 9 times higher than the industry average. It’s no wonder Mac marketshare is growing so fast. “
The industry avaerage was about 8%, so at best Apple grew at 4x the industry average year on year.
It was up 30% compared to the quarter where everybody knew that the new Intel Macs were shipping next quarter and were putting off Mac purchases. So it’s being compared to a quater of low Mac sales. Given that, 30% growth is hardly a big win.
Quarter on quarter Mac sales growth was 8% under the industry average.
HP achieved a 24% increase, almost as much as Apple, without such a strong incentive holding back HP purchases last year.
So now that the Intel transition is complete and the pent up demand is starting to dissipate, lets see if Apple underperfoms as it just did last quarter on a quarter to quarter basis, or pulls a rabbit out of the hat.
To Demand,
“So it’s being compared to a quater of low Mac sales. Given that, 30% growth is hardly a big win.”
There may have been a pause due to the Intel transition, but that quarter last year still sold more Macs than any quarter since 1Q 2000 (Oct-Dec 1999). Also last year’s quarter had 14 weeks compared to the 13 weeks in this year’s quarter. Sounds like a pretty big win to me.
“HP achieved a 24% increase, almost as much as Apple, without such a strong incentive holding back HP purchases last year.”
I didn’t look it up, but I’d guess, unlike Apple, HP didn’t grow its ASP. Apple grew its ASP from $1375 to $1501 (q-to-q and y-to-y). Since Hurd’s arrival, HP has been slashing prices (and costs) to successfully take market share from Dell, not Apple. Slashing prices is what Dell used to do, and where oh where did it leave Dell? (Answer: Giving a CES keynote about saving trees and same-old same-old gaming PCs to a fairly empty room while Apple launched the iPhone!) I hope HP has another rabbit to pull out of its hat before it gets to that same place.
“lets see if Apple underperfoms as it just did last quarter on a quarter to quarter basis, or pulls a rabbit out of the hat.”
Since Q2 is usually Apple’s worst of the year due to seasonality issues, you’re desire to do a q-to-q comparison is simply a set-up for bashing Apple some more.
You really don’t know anything about Apple, do you?
Except recall that despite seasonality woes, at one point– recently– their typically worst quarter ended up being a company record-breaker. It’s unlikely again, but possible.
Bring on Leopard!
“Sounds like a pretty big win to me.”
It’s sure better than staying flat, or declining but as I said there’s a number of complicating factors which make it hard to just take that number on face value. If they repeat that growth number in year, that will then be impressive.
24% growth, with the volumes that HP do is a truly impressive number. It’s much more impressive that Apple’s 30% growth bcause high growth off a small base is easy to achieve.
“Since Q2 is usually Apple’s worst of the year due to seasonality issues, you’re desire to do a q-to-q comparison is simply a set-up for bashing Apple some more.”
The seasonality argument is BS. The overall PC industry grew substantially during that quarter, so people were out there buying relatively more Windows PCs and less Macs. Why should that be a good thing? or even an acceptable thing, just because Apple traditionally has done that. I’d be telling Apples marketing guys to find out why, with all these supposed advantage and a completed Intel transition, they can’t even stand still in the PC market and are going backward, at least compared to their industry peers.
“successfully take market share from Dell, not Apple. “
What you’re missing is that quarter to quarter, Apple lost market share because the overall industry volume increased yet Apple’s sales remain flat. HP no doubt got some of Apple’s loss.
“You really don’t know anything about Apple, do you?”
If by that you mean that it’s a magical company which should not be judged by normal metrics because that’s “apple bashing”, I know some people think that, but I don’t beleive that.
There’s a reason the people who know what the’re doing sold Apple stock rather than brought it on this news.
I was kinda hoping the momentum of previous quarters could be maintained, but I guess there’s been a slowdown for whatever reason (Vista hype?) Hopefully things will pick up again with the release of Leopard and CS3.