Mac Musings

Best Mac Quarter Ever

Dan Knight - 2010.07.21 - Tip Jar

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Best. Mac. Quarter. Ever.

From a Mac user's perspective, those four words summarize Apple's latest quarterly results.

Yes, Apple set new records with $15.7 billion in sales and $3.25 billion in profits.

Yes, the iPad is a runaway success - Apple sold nearly as many of the iOS tablets (3.27 million) as Macintosh computers over the past quarter. And yes, the iPhone remains a huge hit with 8.4 million units sold, a 61% year-over-year improvement, thanks to the launch of the iPhone 4, "the most successful product launch in Apple's history". And even though total iPod unit sales declined, it remains the dominant platform with 70% of the market, total iPod revenues are up, and iPod touch sales grew 48% year-over-year.

But the big news for those who think the Mac has somehow become less important to Apple in light of the success of the iPhone and iPad (Apple has sold over 100 million iOS devices to date), Macintosh sales were up 33% year-over-year, reaching a record high of 3.47 million units. (Mac sales were up 40% in the Americas, and, according to IDC, the overall computer market has a 22% growth rate.)

Better. Than. Christmas.

That's better than the holiday quarter, which was the Mac's previous sales record.

Over the past year, Apple has sold over 12 million Macs (12.83 million to be precise), the first time it has reached that level, and there seems to be no end in site for the Mac's continued growth.

Looking at Mac sales history, Apple has sold over 40 million units since switching to Intel CPUs in 2006.

We've Come a Long Way

For a while there in the late 90s, Apple and the Macintosh appeared to be heading for extinction. The word beleaguered was the one most widely associated with Apple circa 1997.

And then came Jobs. And the first G3 desktop and notebook Macs. And then the iMac. And later the iBook. And shortly after that, the Power Mac G4, followed by dual-processor models 10 months later.

Macintosh unit sales have been on the increase since 2004 and continue to set new records.

Y2K was good to Apple. Between people wanting to leave Windows behind (whether due to the Y2K scare, the malware scene, or the iMac) and the introduction of ever more powerful Macs, sales spiked in 1999, dropped in 2000, and were remarkably steady (around the 3 million unit-per-year mark) through 2003.

By the end of 2005, annual unit sales broke record levels set in 1999, and growth has been solid ever since: 3.5 million units in 2004, 4.7 in 2005, 5.6 in 2006, 7.7 in 2007, 9.9 million in 2008, and 11.2 million in 2009. Hitting 14 million units in calendar 2010 is not out of the picture.

No End in Sight

In terms of unit sales, the iPhone and iPod lines already eclipse the Mac, and the iPad may do that as well, but there's a lot more to the picture than unit sales. Macs cost a lot more than iPhones and iPads - the least expensive Mac, the $699 Mac mini, retails for more than the average iPhone and iPad selling prices ($595 and $640 respectively), and most Macintosh models sell for well over $1,000.

I haven't seen any hard numbers for Macintosh income, but we can make an educated guess. iPhone sales, $5.33 billion. iPad, $2.17 billion. iPods, $1.5 billion. iTunes Store, $1 billion. That leaves $5.7 billion.

Apple's retail stores generated $2.58 billion in revenue, but a lot of that had to come from sales of Apple product, which should be included in the above numbers. Based on a chart displayed by Macworld, it looks like total Mac revenues were in the $4.2 billion ballpark, a very solid second place behind the iPhone - and nearly as much as the iPad, iPod, and iTunes combined.

Since writing this, the number has been revealed. The Mac division generated $4.4 billion of income over the quarter, even better than my guess.

Macs will continue to be a significant source of income for Apple, even if the spotlight is on iOS devices. If Apple can continue to exceed the PC industry growth rate by 50%, Mac unit sales will continue their climb, and Apple has little incentive to kill off a profitable product line.

Mac users, the best years are ahead of the Mac. We're here for the long haul.

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Dan Knight has been using Macs since 1986, sold Macs for several years, supported them for many more years, and has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.

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