A Look At Apple, Part One . . .

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Apple has been in the news a lot lately. The new anti-Vista ads are one reason; they stung enough to make Bill Gates whine a bit to Newsweek

OK, just how well is Apple doing now that it’s shifted to Intel and all that? Are the armies of iPod users swinging over to Macs?

I took the unit sales of Macintoshes for the past two calendar years (as stated in their Form 10-K reports to the SEC)and compared them to worldwide PC sales (as stated by IDC Researchfor each quarter in 2005-2006. production

Quarter

Total Mac Sales (in thousands)

Total World Sales (in thousands)

Apple’s World Market Share

4Q 2004

1,046

52,186

2.00%

Q1 2005

1,070

47,109

2.27%

Q2 2005

1,182

47,477

2.48%

Q3 2005

1,236

52,879

2.33%

Q4 2005

1,254

60,318

2.07%

Q1 2006

1,112

53,207

2.09%

Q2 2006

1,327

52,084

2.55%

Q3 2006

1,610

57,052

2.82%

Q4 2006

1,606

65,587

2.44%

So in two years, Apple has gone from 2.0% to 2.5% marketshare.

In comparison, here’s a couple other companies that made gains over this time, too. First, Hewlett Packard:

Quarter

Total HP Sales (in thousands)

Total World Sales (in thousands)

HP’s World Market Share

4Q 2004

8,257

52,186

15.8%

4Q 2005

9,564

60,318

15.7%

4Q 2006

11,900

65,587

18.1%

Hmmmm. Between 2005 and 2006, HP increased its marketshare 2.5%, or five times what Apple did, and sold 2.3 million more units 2006 than 2005, which is almost 50% more units than Apple sold in total that quarter.

But you only hear about HP when they have a scandal (or pass Dell in sales).

HP is a PC giant, you say? OK, how about a certain company called Acer?

Quarter

Total Acer Sales (in thousands)

Total World Sales (in thousands)

Acer’s World Market Share

4Q 2004

2,165

52,186

4.1%

4Q 2005

3,302

60,318

5.4%

4Q 2006

4,630

65,587

7.1%

Hmmm. In two years, Acer more than doubled its PC sales, and increased its market share 3%, or six times that of Apple. It sold 2.5 million more PCs in in the last quarter of 2006 than 2004, over 50% more than Apple’s total sales.

Do you know who the head of Acer is? Do you know anything about him, outside of his obvious uncoolness compared to You Know Who?

Dying and Thriving

Even after we’ve put Apple’s sales in proper perspective, the company obviously still is selling considerably more Macs than they used to.

Just what is selling and what is not is the real story about Apple.

First, let’s see how Apple’s desktop computers (the Powermacs, the iMacs and miniMacs) are doing, quarter by quarter:

Quarter

Desktop Mac Sales (in thousands)

Laptop Mac Sales (in thousands)

4Q 2004

623

423

Q1 2005

608

462

Q2 2005

687

495

Q3 2005

602

634

Q4 2005

667

587

Q1 2006

614

498

Q2 2006

529

798

Q3 2006

624

986

Q4 2006

637

969

While the overall PC market increased 25%, the Apple desktop market stayed static, while the number of notebooks more than doubled. For sure, notebooks have been grabbing the lion’s share of the overall PC market, but not quite to this degree.

Just as Apple has become an iPod company that happens to sell Macs, they’re becoming a notebook company that just happens to sell desktops.

To the extent anybody’s switching, it’s to the notebooks. This brings up an interesting idea, which we’ll discuss tomorrow.

Ed


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