After 'astonishingly' poor quarter, Mac sales predicted to rebound

Posted:
in Current Mac Hardware edited January 2014
Mac sales outgrew the overall PC market for 26 consecutive quarters until December, but Apple is expected to see sales improve in the current quarter.

Needham


The Mac's sudden collapse in the December quarter was described as "astonishing" by analyst Charlie Wolf of Needham & Co. on Friday. He noted that Mac shipments fell below PC shipment growth in all geographic regions and segments in the quarter.

"There was absolutely not one iota of positive news in the Mac shipment numbers," Wolf said.

Apple blamed the Mac's poor quarter, in which shipments fell by 22.1 percent year over year, on a lack of availability of the iMac. The new all-in-one desktop went on sale in the month of December, but supply was severely constrained through the end of the quarter, and Apple has still not yet caught up with demand.

However, there are signs that iMac availability is improving, as the NPD Group reported this week that domestic Mac sales were up 31 percent year over year in the month of January. As a result, Wolf believes Apple could be in a position to surpass the overall PC market again in the current March quarter.

Needham


Beating the PC market may not even require year over year growth. For example, Mac sales were down 6.1 percent in the third quarter of 2012, but that still managed to outperform the overall PC market, which was down 13.8 percent in the quarter, according to Gartner.

Beyond limited iMac availability, Wolf said that it's likely that a "material percentage of consumers" opted to buy an iPad over a Mac. He also noted that Apple's recent price cuts on its MacBook Pro models with Retina displays are a sign that the company "overestimated the allure" of its high-end notebooks.

Finally, Wolf admitted that Microsoft's new Windows 8 operating system will present "a major test" to the Mac, particularly in the business market. He believes the tiled Metro interface employed by Microsoft is a refreshing alternative to the iPhone and Android devices, but said it's an "unanswered question" whether the interface will catch on with desktop PCs.

"It's conceivable that desktop users will eventually fall in love with the new interface," Wolf said. "In the meantime, however, Metro involves a steep learning curve."
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Comments

  • Reply 1 of 119
    freshmakerfreshmaker Posts: 532member


    What a silly article.  It was completely attributable to production issues that have since been resolved.  Mac sales are going to be great this quarter.

  • Reply 2 of 119
    zoffdinozoffdino Posts: 192member
    Well, production issue is also a reflection of managament's aptitude on supply chain. Nobody was expecting a thinner iMac. What was sorely needed, however, was an updated iMac with Ivy Bridge and USB3. Apple could have easily jammed those into the existing package, take the time to iron out the production issues on the new chasis and have it ready for Haswell. They chose the hard route and was punished as a reseult. Tim Cook mentioned a backlog of 700,000 iMacs on the quarterly call. I suspect this quarter won't fill all of them.
  • Reply 3 of 119
    xzuxzu Posts: 139member
    Supply constraint was predicted by Apple and no one listened.

    On the other hand, after 25 years of Mac only use, I am buying a couple desktop PC's running Win7. No Mac Pro makes me sad, and an iMac is just a vertical laptop.
  • Reply 4 of 119
    afbiafbi Posts: 7member
    What a load of crap! Any analyst with half a brain would understand that due to some supply chain issues which are now completely corrected there was a shifting (not a loss) of revenue from the Dec. quarter to the March quarter.

    Regardless... the REAL reason for Apples huge stock drive, is now pretty well understood to be caused by the major short selling and gaming that hedge funds were doing pretty much from the Sept. top right through into Jan. If anyone doesn't believe that was the real cause, they simply DO NOT understand how easily stocks CAN be manipulated.

    We just saw another case of this with that Hedge fund putz Kass's recent Twitter manipulation.
  • Reply 5 of 119
    zoffdinozoffdino Posts: 192member

    Quote:

    Originally Posted by xZu View Post



    Supply constraint was predicted by Apple and no one listened.



    On the other hand, after 25 years of Mac only use, I am buying a couple desktop PC's running Win7. No Mac Pro makes me sad, and an iMac is just a vertical laptop.


     


     


    And the Mac Pro as well... even though there are rumors they will release it before June. Honestly though, what the f---- is so new and so revolutionary about the new Mac Pro? Top end CPUs, top end graphics, truck load of RAM, massive HDD, multiple SSDs, plenty of expandability... those are plain-to-see requirements for a pro machine. And the fact that the current Mac Pro aren’t selling like hot cakes (I doubt the new one will either), it makes sense for Apple to preannounce it and have it ship later.


     


    What they totally miss is a stable road map. If I buy a workstation from Dell, I know they will come out with a faster version once a new Intel chip is out next year, and the year after next. It’s like clockwork that allows me to plan for a stable upgrade route for my business.

  • Reply 6 of 119
    solipsismxsolipsismx Posts: 19,566member
    freshmaker wrote: »
    What a silly article.  It was completely attributable to production issues that have since been resolved.  Mac sales are going to be great this quarter.

    Have the production issues of the iMac been resolved? They are producing them which was an issue when they stopped selling the older models after the new ones were introduced but the times are still 2-3 weeks and 3-4 weeks for the 21.5" and 27" models, respectively. Did a lot more people buy right away because they knew they had to wait or are they buying more now.
  • Reply 7 of 119
    zoffdinozoffdino Posts: 192member

    Quote:

    Originally Posted by AFBI View Post



    Regardless... the REAL reason for Apples huge stock drive, is now pretty well understood to be caused by the major short selling and gaming that hedge funds were doing pretty much from the Sept. top right through into Jan. If anyone doesn't believe that was the real cause, they simply DO NOT understand how easily stocks CAN be manipulated.


     


    Have you stopped crying wolf for a moment and think why it’s been going down so spectacularly in the past 5 months? I don’t disagree that short sellers and hedgies play a (major?) role in it, but how can they do it so far and for so long? It’s because Tim Cook and the board doesn’t care one bit about shareholders. All he keeps saying is “we take a long view”,  “we care more about innovation”. None of these is wrong, but he isn’t feeling or sharing the pain of the shareholder when the stock keeps dropping and dropping. He has tools to fight against it: a PR to announce X millions iPhones sold, a denial of rumors, dividend hikes, buyback boosts, …. And yet he chose to do nothing.




    It’s like you have a gangster brother but the bullies know you aren’t telling him nothing. Do you think they will stop stealing your lunch money or giving you wedgies? They will bully you until you’re on life support. Your friends will be too scared to play with you now.


     


    Last week there was news of Foxconn hiring freeze that was automatically translated to Apple’s production cut. In fact it was due to better than expected retention rate (note how no one credited Apple with improving the working conditions at Foxconn). Just today, there’s rumor of inventory buildup in Europe because iPhone 5 isn’t selling--it can be due to a myriad of things, including that Apple has solved iPhone 5 production problems and start to build channel inventory toward their 4 - 6 weeks target. Every Apple story has been twisted to shine negative light on the company, and management refused to clarify it. Tim Cook could have simply call his broker and order a $1B share buyback. Announce it at 3pm, and slap the bears in the face. That would convince me that he means serious business.

  • Reply 8 of 119
    "after 25 years of Mac only use, I am buying a couple desktop PC's running Win7. No Mac Pro makes me sad, and an iMac is just a vertical laptop."

    @xzu With the statements you made, there is no way that you were a Mac user for any time. You sound like a hard core Windows box user and may have used a Mac for half an hour. You just don't 'get' Macs if you put down the iMac as a vertical laptop. Powerful computers are made with powerful processors and graphics chips regardless of the shape of the box.
  • Reply 9 of 119
    saareksaarek Posts: 1,520member


    Astonishing? Well, I suppose it's astonishing that Apple could have screwed up the iMac refresh so badly in the first place, but after they had done so the sales figures should have been expected, quite frankly I'm surprised they were not worse.

  • Reply 10 of 119
    rsdofnyrsdofny Posts: 98member


    That says a lot about Tim Cook who is supposed to be the supply chain genius.  He updated the entire product line and none of them are working as well as he expected.   The only bright spot was the iPad mini which due to supply constraint could not be manufactured faster enough to meet demand.  Low cost or larger size iPhone should be on the design shelf ready to go with a moment's notice.  Now, we hear all these rumors about late 2013 or 2014 introduction.  The market is not going to sit still, and Apple should get its a$$ moving.  Premium products need innovation, and I hope that they have a lot around.   

  • Reply 11 of 119
    flaneurflaneur Posts: 4,526member
    zoffdino wrote: »
    Well, production issue is also a reflection of managament's aptitude on supply chain. Nobody was expecting a thinner iMac. What was sorely needed, however, was an updated iMac with Ivy Bridge and USB3. Apple could have easily jammed those into the existing package, take the time to iron out the production issues on the new chasis and have it ready for Haswell. They chose the hard route and was punished as a reseult. Tim Cook mentioned a backlog of 700,000 iMacs on the quarterly call. I suspect this quarter won't fill all of them.

    "Well, production issue is also a reflection of managament's aptitude on supply chain."

    No it isn't. Trial production of a new screen laminating process will not tell you how everything is going to work when full production begins. They are doing something complex that has never been done before. Unless you know the details, specific details, of what happened with those lamination processes, you have NO damn business talking shit about "supply chain aptitude."

    "Nobody was expecting a thinner iMac."

    So you caught that meme, did you? The new iMac is about the new screen, which is coated by an anti-reflective coating and now missing a layer of glass as well. So you want to tell them to "jam" this amzing new screen in the old fat frame? Yeah, that sounds like something Jony Ive would do.

    Have you looked at the displays on these machines?

    This story by Neil Hughes is written so blankly, lacking all reference to the production background, that it allows for perfidious comments like this about "supply chain aptitude." I'm beginning to think there's something funny going on at AI with regard to these "analyst" stories.
  • Reply 12 of 119
    sdo2000sdo2000 Posts: 29member
    "after 25 years of Mac only use, I am buying a couple desktop PC's running Win7. No Mac Pro makes me sad, and an iMac is just a vertical laptop."

    @xzu With the statements you made, there is no way that you were a Mac user for any time. You sound like a hard core Windows box user and may have used a Mac for half an hour. You just don't 'get' Macs if you put down the iMac as a vertical laptop. Powerful computers are made with powerful processors and graphics chips regardless of the shape of the box.

    He isn't really far off though. The imac does not have desktop class graphics. The imac uses laptop grade video cards which aren't as powerful as their desktop counterparts. /shrug
  • Reply 13 of 119
    enjournienjourni Posts: 254member
    Apple killed the older model iMac before they had sufficient stock of the new one, which was horrendously bad planning. They literally had no iMacs to sell anyone, because they could not time the new release correctly. This is management's fault, plain and simple.
  • Reply 14 of 119
    solipsismxsolipsismx Posts: 19,566member
    saarek wrote: »
    Astonishing? Well, I suppose it's astonishing that Apple could have screwed up the iMac refresh so badly in the first place, but after they had done so the sales figures should have been expected, quite frankly I'm surprised they were not worse.

    rsdofny wrote: »
    That says a lot about Tim Cook who is supposed to be the supply chain genius.  He updated the entire product line and none of them are working as well as he expected.   The only bright spot was the iPad mini which due to supply constraint could not be manufactured faster enough to meet demand.  Low cost or larger size iPhone should be on the design shelf ready to go with a moment's notice.  Now, we hear all these rumors about late 2013 or 2014 introduction.  The market is not going to sit still, and Apple should get its a$$ moving.  Premium products need innovation, and I hope that they have a lot around.   

    You two are jumping the gun with your hypotheses. While it could be Apple or Cook's fault there is no clear evidence that is the case all we known that it's negatively affecting Apple's sales.

    Consider the original iPhone which had only 270k units sold its entire 4th quarter. This is not unlike what Apple did with the old iMac style not being available after the new iMac was announced. Now consider all the other delays constricted shipments Apple has seen over the years under Steve Jobs. There have been plenty but we tend not to remember them as we can see with many pundit claiming that Apple is collapsing without Steve at the helm.

    My question is why would Apple make a new iMac and risk losing sales altogether for 1-2 months and then have severely constricted supply for so long? You can't just say that Apple is stupid or Tim Cook sucks (not that you two would be so superficial or impudent). They cold have just kept the same design and then updated the internals. I am certain they have backup designs for many projects so why not just update the internals of the iMac and be done with it months earlier.

    Did a supplier fall through at the last minute (which means that some of the blame is off of them) or could there be a more complex and longterm reason why Apple choose to lose some sales on the least popular type of device (desktop PC) within their least popular product category (PCs)?

    One hypothesis I've put forward is that these iMacs were necessary for them not to get behind. But how if they are behind on iMac sales? That's looking at just the iMac. Apple has a long history o incorporating skills perfected in one area with other areas. This reduces costs and increases margins while still being competitively priced. What if these iMacs — the stir-friction welding, large laminated display, or something else entirely — are trials for a bigger, more colossal project that would be set back a year if Apple had waited a year to release this new iMac design?

    I'm not saying that is the case, just that there isn't enough information to say what circumstances that led to why they did what they did, just as looking at only the original iPhone's 4th quarter would show that Apple dropped the ball… which they clearly didn't.
  • Reply 15 of 119
    flaneurflaneur Posts: 4,526member
    freshmaker wrote: »
    What a silly article.  It was completely attributable to production issues that have since been resolved.  Mac sales are going to be great this quarter.

    This is correct. The story is written as if by a zombie. Where the hell is the background?

    At the newspaper I worked for, the city editor would have tossed the copy across your desk, and said," "Fix this." If you asked him, "Fix what?" he would have screamed at you, "Who, what, where, when and why! You forgot why!"

    Maybe I should stop thinking of this as a news site.

    Edit: Forgot "when." : )
  • Reply 16 of 119
    jim wjim w Posts: 75member

    Quote:

    Originally Posted by zoffdino View Post


     


     


    And the Mac Pro as well... even though there are rumors they will release it before June. Honestly though, what the f---- is so new and so revolutionary about the new Mac Pro? Top end CPUs, top end graphics, truck load of RAM, massive HDD, multiple SSDs, plenty of expandability... those are plain-to-see requirements for a pro machine. And the fact that the current Mac Pro aren’t selling like hot cakes (I doubt the new one will either), it makes sense for Apple to preannounce it and have it ship later.


     


    What they totally miss is a stable road map. If I buy a workstation from Dell, I know they will come out with a faster version once a new Intel chip is out next year, and the year after next. It’s like clockwork that allows me to plan for a stable upgrade route for my business.



    Totally agree. I would rather wait for Haswell than rush one out, but I need to know it is coming. The Mac Pro is not an iPhone with that type of competition or need for secrecy. No one else makes an OSX workstation. It would seem management has a lot to learn about the pro pipeline. Used to be much more predictable. That is necessary when year out and beyond budgeting decisions need to be made and you only have one supplier of your workstations. There are many companies and individuals who refuse to go to Windows, but their patience is being sorely tested.

  • Reply 17 of 119
    wizard69wizard69 Posts: 13,377member


    Get a grip there, the wait for the new Pro isn't the end of the world.  


     


    As to revolutionary there is actually a lot of tech that is about to come on line that could end up in the new Mac Pro.    It is hard to say what we will get obviously but it is reasonable to hold out hope that this years new Mac Pro will break new ground.   


     


    It is never a good idea to pre announce in the tech world.   Time after time it has caused significant issues with companies that have done so.  


    Quote:

    Originally Posted by zoffdino View Post


     


     


    And the Mac Pro as well... even though there are rumors they will release it before June. Honestly though, what the f---- is so new and so revolutionary about the new Mac Pro? Top end CPUs, top end graphics, truck load of RAM, massive HDD, multiple SSDs, plenty of expandability... those are plain-to-see requirements for a pro machine. And the fact that the current Mac Pro aren’t selling like hot cakes (I doubt the new one will either), it makes sense for Apple to preannounce it and have it ship later.


     


    What they totally miss is a stable road map. If I buy a workstation from Dell, I know they will come out with a faster version once a new Intel chip is out next year, and the year after next. It’s like clockwork that allows me to plan for a stable upgrade route for my business.



    Yes Dell often does bump their machines in sync with Intel.   Often they do so with minor benefit to the user.   At this point it doesn't hurt any reasonable work station user to wait to see what Apple delivers.    If it is just another run of the mill upgrade you have your choice of Dell or Apple.    If it is ground breaking then the wait is worth it.  

  • Reply 18 of 119
    xsuxsu Posts: 401member

    Quote:

    Originally Posted by zoffdino View Post


     


    Have you stopped crying wolf for a moment and think why it’s been going down so spectacularly in the past 5 months? I don’t disagree that short sellers and hedgies play a (major?) role in it, but how can they do it so far and for so long? It’s because Tim Cook and the board doesn’t care one bit about shareholders. All he keeps saying is “we take a long view”,  “we care more about innovation”. None of these is wrong, but he isn’t feeling or sharing the pain of the shareholder when the stock keeps dropping and dropping. He has tools to fight against it: a PR to announce X millions iPhones sold, a denial of rumors, dividend hikes, buyback boosts, …. And yet he chose to do nothing.




    It’s like you have a gangster brother but the bullies know you aren’t telling him nothing. Do you think they will stop stealing your lunch money or giving you wedgies? They will bully you until you’re on life support. Your friends will be too scared to play with you now.


     


    Last week there was news of Foxconn hiring freeze that was automatically translated to Apple’s production cut. In fact it was due to better than expected retention rate (note how no one credited Apple with improving the working conditions at Foxconn). Just today, there’s rumor of inventory buildup in Europe because iPhone 5 isn’t selling--it can be due to a myriad of things, including that Apple has solved iPhone 5 production problems and start to build channel inventory toward their 4 - 6 weeks target. Every Apple story has been twisted to shine negative light on the company, and management refused to clarify it. Tim Cook could have simply call his broker and order a $1B share buyback. Announce it at 3pm, and slap the bears in the face. That would convince me that he means serious business.



     


    If you are a long term investor and you believe in the longer term strategy of Apple, then the price drop of Apple stock is not going to be a pain for you.  In fact, you will rejoice at the fact that it's now much cheaper, and you can get nearly twice as much stocks for the same amount of money.


     


    Whenever a company start doing things like you proposed for no other reason than to prop up the stock price, the company inevitably start on a slippery slop to long term decline.  Stock price should be a reflection of a company's future earnings.  PR announcements, dividend hikes, stock buybacks does absolutely NOTHING for future earnings.  

  • Reply 19 of 119
    flaneurflaneur Posts: 4,526member
    solipsismx wrote: »

    You two are jumping the gun with your hypotheses. While it could be Apple or Cook's fault there is no clear evidence that is the case all we known that it's negatively affecting Apple's sales.

    Consider the original iPhone which had only 270k units sold its entire 4th quarter. This is not unlike what Apple did with the old iMac style not being available after the new iMac was announced. Now consider all the other delays constricted shipments Apple has seen over the years under Steve Jobs. There have been plenty but we tend not to remember them as we can see with many pundit claiming that Apple is collapsing without Steve at the helm.

    My question is why would Apple make a new iMac and risk losing sales altogether for 1-2 months and then have severely constricted supply for so long? You can't just say that Apple is stupid or Tim Cook sucks (not that you two would be so superficial or impudent). They cold have just kept the same design and then updated the internals. I am certain they have backup designs for many projects so why not just update the internals of the iMac and be done with it months earlier.

    Did a supplier fall through at the last minute (which means that some of the blame is off of them) or could there be a more complex and longterm reason why Apple choose to lose some sales on the least popular type of device (desktop PC) within their least popular product category (PCs)?

    One hypothesis I've put forward is that these iMacs were necessary for them not to get behind. But how if they are behind on iMac sales? That's looking at just the iMac. Apple has a long history o incorporating skills perfected in one area with other areas. This reduces costs and increases margins while still being competitively priced. What if these iMacs — the stir-friction welding, large laminated display, or something else entirely — are trials for a bigger, more colossal project that would be set back a year if Apple had waited a year to release this new iMac design?

    I'm not saying that is the case, just that there isn't enough information to say what circumstances that led to why they did what they did, just as looking at only the original iPhone's 4th quarter would show that Apple dropped the ball… which they clearly didn't.

    Exactly. This bears quoting to double the chances that some of these supply chain geniuses here might read it.

    I think you might have said this before, too: for all we know, the same production facilities are involved with the new iMac that were making the old one. So they had to shut down production of one to set up for the other. They knew there would be a gap, but so it goes, we can afford it. At least buyers of the old model are not going to bitch when the new one comes out only a week later.

    The only surprise might have been how clueless the "analysts" and the market are. And posters on the news sites like here, of course. (Like they care about us—hah!)
  • Reply 20 of 119
    wizard69wizard69 Posts: 13,377member


    You make assumptions here about what will be in the new Mac Pro.   Haswell might not even be in the picture.   


     


    As for Apple letting Pros know what is up, they already did that some time ago.   Maybe you where asleep at the wheel but they told everybody that a new Mac Pro was coming in 2013 what in the hell do you want besides that.   Do you really think Apple owes you a personally addressed letter, detailing to the minute when the machine will come out?     


    Quote:

    Originally Posted by Jim W View Post


    Totally agree. I would rather wait for Haswell than rush one out, but I need to know it is coming. The Mac Pro is not an iPhone with that type of competition or need for secrecy. No one else makes an OSX workstation. It would seem management has a lot to learn about the pro pipeline. Used to be much more predictable. That is necessary when year out and beyond budgeting decisions need to be made and you only have one supplier of your workstations. There are many companies and individuals who refuse to go to Windows, but their patience is being sorely tested.


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