Apple's average Mac selling price steady at $1300 as iPad eats away at PC sales
As PC sales continue to decline at the hands of tablets like Apple's iPad, the Mac platform is quietly growing its install base while maintaining an average selling price well above the rest of the market.
Analyst Charlie Wolf with Needham & Company noted that the average annual price of devices in Apple's Mac lineup has remained "relatively constant at around $1,300." The analyst had previously projected that Mac sales would decline as lower-cost devices like the iPad grow in popularity, but that hasn't been the case.
Even with the average price holding steady, Apple continues to gain PC market share at the cost of Windows devices. In fact, Mac sales have exceeded PC growth and gained overall marketshare in 30 of the last 31 quarters.
The lone blemish came in what Wolf called an "astonishingly" poor quarter last January, when Apple's streak of 26 consecutive periods outpacing the overall PC market came to an end. Since then, however, Apple's Mac lineup has again chipped away at the dominance of Windows.
Those gains have not always come as a result of growth --?in some recent quarters, Mac sales simply haven't declined as much as the overall PC market, resulting in Apple still making gains. Both Windows and Mac sales have been affected by the rise in popularity of tablets, most notably Apple's iPad.
But the Mac platform returned to growth in the holiday 2013 quarter, reaching 4.8 million units. That was up from 4.1 million units during the same period in late 2012, and also exceeded market expectations of 4.6 million Mac sales.
As a result of the Mac's recent performance, Wolf adjusted his valuation of Apple shares on Monday, giving the company's traditional computer lineup a greater share of his estimated stock price. Wolf's latest estimates gave the Mac a 26.9 percent increase to $42.03 worth of a projected $590 share price.
His estimates peg Apple's more profitable iPhone at a $271.70 per share value, while the iPad has a value of $53.23. The company's excess cash is valued at $157.47 per share, while its iTunes content businesses are assigned $52.29.
Wolf's new price target is down slightly from his previous projection of $595. Wolf has a different approach to than his colleagues, as he will only re-evaluate a company's price target twice per year, with the last update arriving in August.
Analyst Charlie Wolf with Needham & Company noted that the average annual price of devices in Apple's Mac lineup has remained "relatively constant at around $1,300." The analyst had previously projected that Mac sales would decline as lower-cost devices like the iPad grow in popularity, but that hasn't been the case.
Even with the average price holding steady, Apple continues to gain PC market share at the cost of Windows devices. In fact, Mac sales have exceeded PC growth and gained overall marketshare in 30 of the last 31 quarters.
The lone blemish came in what Wolf called an "astonishingly" poor quarter last January, when Apple's streak of 26 consecutive periods outpacing the overall PC market came to an end. Since then, however, Apple's Mac lineup has again chipped away at the dominance of Windows.
Those gains have not always come as a result of growth --?in some recent quarters, Mac sales simply haven't declined as much as the overall PC market, resulting in Apple still making gains. Both Windows and Mac sales have been affected by the rise in popularity of tablets, most notably Apple's iPad.
But the Mac platform returned to growth in the holiday 2013 quarter, reaching 4.8 million units. That was up from 4.1 million units during the same period in late 2012, and also exceeded market expectations of 4.6 million Mac sales.
As a result of the Mac's recent performance, Wolf adjusted his valuation of Apple shares on Monday, giving the company's traditional computer lineup a greater share of his estimated stock price. Wolf's latest estimates gave the Mac a 26.9 percent increase to $42.03 worth of a projected $590 share price.
His estimates peg Apple's more profitable iPhone at a $271.70 per share value, while the iPad has a value of $53.23. The company's excess cash is valued at $157.47 per share, while its iTunes content businesses are assigned $52.29.
Wolf's new price target is down slightly from his previous projection of $595. Wolf has a different approach to than his colleagues, as he will only re-evaluate a company's price target twice per year, with the last update arriving in August.
Comments
I wish they could hit lower price points with some hardware. imo the mini is not worth more that $500.
That is so spot on!
I wish they'd make they mini a $1,200 entry Mac so we wouldn't have to deal with whiners. And I don't mean herbapou specifically, just in general. We shouldn't forget that the price of service, the software, the QA, it's all included in the price. Sure, a fugly Wintel box will be cheaper, but the added value of a Mac and using it without cringing every other minute when using Windows should make people understand why you pay for what you get.
The lone blemish came in what Wolf called an "astonishingly" poor quarter last January, ...
Could that have been due to, oh, I dunno, maybe the one-time production delay caused by that fancy new friction-welding process? You know, the technique Apple first introduced in late 2011 for all iMacs?
http://appleinsider.com/articles/12/11/14/rumor-release-of-new-imacs-may-be-delayed-into-2013
Well when Michael Dell gives his money back to the share holders ...
Well when Michael Dell gives his money back to the share holders ...
Well, by taking the company private... isn't that what he technically did?
I always like it when people who are legends in their own mind have to drink their own bath water.
The Mac ASP compare is a bit skewed (favorably toward 2013) because of the huge shortage of iMacs in the Holiday 2012 (Dec-2012) quarter. If you recall, it was estimated that Apple was backlogged by up to 600K - 1M Macs during the Dec-2012 period, whereas the iMacs were not supply constrained in the Dec-2013 period. Since the iMacs drive ASP up based on a higher ASP than portables ($1600-or-so), if iMacs were not supply-constrained in Dec-2012, you would have seen a decline in ASP year-over-year. How much? It's anybody's guess.
One could argue that the Mac Pro not shipping in FQ1 2014 (Dec-2013) artificially depressed the Dec-2013 number, which would be a valid point, but only if Apple shipped a lot of the legacy Mac Pro models in Dec-2012, which I don't believe it did.
If you check their 10K 2012, they break down ASP for desktop vs laptop and this was before the supply constraint.
2012 desktop was $1297, laptop was $1272
2011 desktop was $1379, laptop was $1272
2010 desktop was $1340, laptop was $1250
ASP wouldn't have changed. The shipment volume would have differed as they noted a 700,000 unit shortfall so it would have been 4.8m last year and 4.8m this year.
What was the conclusion you were hoping to reach? That Apple is struggling just like the manufacturer of the computer you are currently using? It's not necessary to be so insecure about it. Just throw it away and buy a Mac.
Wow, Marvin - not trying to make any point - Simply an observation that the iMac shipment shortfall in Dec-2012 likely depressed ASPs in that period. I am a proud Mac owner (multiple times over) and a huge Apple supporter.
I will note that in favor of Dec-2013, there was an increased revenue deferral of $20 per unit to account for the OS X giveaway so that was a direct hit to ASP, making it $1,320.
The problem with All the Mac's pricing now are Intel. Which is commanding the largest BOM cost. And getting a Haswell Refresh next year definitely isn't worth it. And AMD isn't giving Intel any pressure at all. To lower ASP without affecting margin, Apple will need to find something to Replace Intel CPU.
You seemed to reach the conclusion that the ASP would have declined first and then looked for facts to fit that conclusion and it was based around the assumed desktop ASP of $1600. The desktop ASP isn't $1600 and hasn't been for at least 3 years. The iMac makes up about 80% of the desktop sales or more so without it, there's not really enough revenue to shift the figures.
The article conclusion is accurate that in spite of post-PC devices eroding PC sales, the Mac line isn't suffering nearly as badly. That holds true for unit volume and ASP.
It's good you avoided putting a 'but' at the end, usually there's a 'but'. That sets off a buzzer. We need to get another buzzer though as the last one wore out.
OS X revenue is counted separately from Mac revenue. They have a category "software, services and other sales". It wouldn't affect machines with bundled OS X.
THE HOLY FUC**** TRINITY!!!!
I'll be getting the iPad Air with 128 gigs soon. I'm so stoked!!!!!
See below.
You seemed to reach the conclusion that the ASP would have declined first and then looked for facts to fit that conclusion and it was based around the assumed desktop ASP of $1600. The desktop ASP isn't $1600 and hasn't been for at least 3 years. The iMac makes up about 80% of the desktop sales or more so without it, there's not really enough revenue to shift the figures.
The article conclusion is accurate that in spite of post-PC devices eroding PC sales, the Mac line isn't suffering nearly as badly. That holds true for unit volume and ASP.
It's good you avoided putting a 'but' at the end, usually there's a 'but'. That sets off a buzzer. We need to get another buzzer though as the last one wore out.
OS X revenue is counted separately from Mac revenue. They have a category "software, services and other sales". It wouldn't affect machines with bundled OS X.
Actually, the giveaway of OS X did hurt the Mac ASP, just like the iOS Suite giveaways (iPhoto, iWork, etc.) hurt iPhone, iPad and iPod Touch ASPs - via revenue deferrals. Oppenheimer estimated that they would defer an 'incremental' $900M on the FQ4 13 earnings call in October.
Apple had to defer additional revenue on the devices themselves, which hurt FQ1 2014 ASPs across the board. However, that revenue will be recognized over the next 8 quarters or so (hence, Apple's $11.4B in deferred revenue stashed away, of which $8.4B is current or will be recognized in the next four quarters).
The loss of sales on OS X and the other software is an outright loss of revenue to the "Software / iTunes / etc." product category. So, it really has a dual effect, although the deferral is merely temporary as the revenue is eventually recognized in future periods' P&Ls.
Software accounting distorts a bit and that's why you have to look at Operating Cash Flow, which adjusts for all of these accounting nuances.
Here's Oppenheimer's exact words from the FQ4 2013 call:
As a result of the traditional rights and features we are deferring a greater portion of the sale of each iOS device in Mac sold. We anticipate that the additional deferral per device sold coupled with our sequentially greater unit volume expectations in the December quarter will result in about a $900 million sequential increase in the net amount of revenue deferred for software upgrade rights and non-software services....
Given the announcements that we made last week and that I went through it in my prepared remarks, we have actually increased those deferrals. iPhone and iPad, we are differing between $15 and $25. That's up as much as $5 per device and Mac has been some $20 to $40, so up an additional $20.
- The Killers
Their latest figures include any deferrals and the ASP is still $1322 for the quarter, which is almost identical to the previous quarters going back 3 years. Anyway, whatever they choose to bundle free has nothing to do with the effect of post-PC devices. For now, the Mac line isn't suffering nearly as much as PCs.
They really are doing a great job with the MacBooks. PCs will stay around, but there is a clear market change occurring.
They will really bring the pc market back to glory, but we will still see tablets doing great.
I mean, they are even featured in old Sci fi, its not like its some completely new concept.
Just glad repairs are not out of the question! Expensive bit of kit, where as PC can very easily chop and change. Family broke the ipad but misses got repaired on http://www.theipadpros.com
Hope they can reduce the cost and make more accessible. But screens are butiful