Stop the Noiz

Apple Could Become #2 PC Maker This Year

Frank Fox - 2011.05.09 - Tip Jar

Canalys has decided to include the tablets (e.g., the iPad) with other computer sales when estimating market share. Because the iPad is selling so well, this has given Apple a big boost in ranking.

Because of the iPad's inclusion, Canalys ranked Apple number three during Q4 2010 (see PDF). That was the big holiday quarter when Apple sold 7.33 million iPads. This pushed it ahead of Dell, but it remained behind HP and Acer.

Q4 2010
Year/Year Growth Units Sold (millions) Macs Sold (millions) iPads Sold (millions)
HP 2.9% 18.7 - -
Acer 8.8% 13.6 - -
Apple 241.0% 11.5 4.13 7.33
Dell 10.6% 11.4 - -

Canalys most recent report shows that Apple dropped to number four spot, with Dell moving ahead of it in rankings. Apple sold fewer iPads during the quarter, and that reduced unit sales by several million.

Q1 2011
Year/Year Growth Units Sold (millions) Macs Sold (millions) iPads Sold (millions)
HP -5.8% 14.7 - -
Acer -6.5% 11.3 - -
Dell 2.8% 10.0 - -
Apple 187.9% 8.2 3.76 4.69

Apple's problem with iPads wasn't low demand, but a limited supply. It's suppliers simply couldn't make enough.

The website iSuppli reduced its forecast of iPad sales for 2011 to 39.7 million. Out of that estimate, we know that Apple has already sold 4.7 million iPads. That leaves Apple projected to sell on average 11.7 million per quarter.

The other import information we learn from both reports is that the growth of Windows-based PCs has slowed compared to Apple. Growth at HP, Acer, and Dell did worse each quarter. Only their overall size kept them in the lead.

Apple, on the other hand, did outstanding regarding growth, both with its Mac sales and with the addition of iPads pushing growth even higher. Mac growth Q4 2010 was up 23% from the year ago quarter - and 241% when you include iPads. Mac growth Q1 2011 was up 28% from the year ago quarter, and 187.9% when you include iPads.

This is rock star growth compared to the other big three.

With PC growth down, especially among the big three, and the iPad boosting Apple's ranking, it won't be long until Apple becomes the number one seller.

We can easily see that by the end of the year Apple will be in the number two spot.

First, let's look at how poorly the PC crowd is growing. In Q4 2010, HP grew 2.9% y/y, Acer 8.8%, and Dell 10.6%. This year has been worse. HP grew 5.8% y/y, Acer 6.5%, and Dell 2.8%. For the US economy's sake, we can only hope these companies turn this around, returning to positive numbers. It would be optimistic to give 3% to 5% growth. That puts HP at 19.3 million, Acer at 14, and Dell at 11.8 at the low end of growth.

Apple, on the other hand, will grow a lot more. Apple has been steadily growing Mac sales 23% to 33% for at least the last six quarters. In Q4 2010, it sold 4.13 million Macs and 7.33 million iPads. By the end of this year, Mac sales should reach 5.35 million, if they continue to have at least 28% growth. If we add to this the average projection of 11.7 million iPads, then we have a total of 17.1 million for Q4 2011.

If we compare Apple in Q4 2011 to what we expect for growth from the big three, Apple will be number two, beating out Acer, but not quite big enough to get ahead of HP.

Q4 2011 (future projection)
Year/Year Growth Units Sold (millions) Macs Sold (millions) iPads Sold (millions)
HP 3.0% 19.3 - -
Apple 149.6% 17.1 5.35 11.7
Acer 3.0% 14.0 - -
Dell 3.0% 11.8 - -

Two factors could throw this result off. If PC sales suddenly get a kick start, but with a tough economy and high gas prices, it is hard to see where the demand will come from. The flip side will be if iPads demand exceeds 11.7 million per quarter.

It would only be reasonable that the 39.7 million estimated by iSuppli will not be divided evenly. With holiday sales, the fourth quarter is always the best for Apple. Apple has to sell 13.9 million iPads to take over the number one spot.

Still, holiday sales may be good for everyone, so HP has a good chance of keeping its number one spot this year. Acer would have to surge ahead by 25% to keep up with Apple, and that just isn't likely to happen.

The PC crowd with their mediocre tablets has a long way to go before they catch up to Apple. In the meantime, Apple won't be slowing down to let them catch up either. Even if Apple is not the number one selling brand by the end of the year, it will be in 2012. LEM

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