Apple's surprising sales in emerging markets like China & Latin America keep Mac growth ahead of PC
Sales growth for Apple's Mac platform has outpaced the PC market for the 31st time in the past 32 quarters, keeping the trend alive. But surprisingly, Apple's premium-priced computers were actually driven by growth in emerging markets last quarter, new data shows.
Chart via Needham & Co.
The fact that the Mac outpaced the overall PC market last quarter is not surprising --?Apple has seen its share of the worldwide PC market grow from 2.1 percent in 2005 to 5.5 percent in 2013, Needham & Co. analyst Charlie Wolf noted on Monday. But in the March quarter, Mac sales actually underperformed in established markets.
Year-over-year growth for Mac sales was down in North America, according to data from Gartner. In addition, PC sales growth exceeded the Mac in Europe and Japan.
But Apple's Mac platform saw explosive growth in Greater China, Asia Pacific, EMEA (Europe, the Middle East and Africa), and Latin America. In particular, Apple saw explosive growth north of 20 percent in EMEA, and exceeded 25 percent year-over-year growth in Latin America.
Wolf, who summarized the data in a note to investors that was provided to AppleInsider, is baffled by this result.
"We can see no obvious explanation for the disparity between developed and developing regions," he said. "It could be a one-quarter blip, which only the data for June will reveal. Or it could represent an inflection point in the Mac's fortunes. Only time will tell."
Apple's growth in emerging markets comes in spite of the fact that the average selling price of a new Mac has remained well above $1,000, placing the devices in a class -- and price range -- beyond the low-margin nature of the rest of the PC business. Market watchers believe the continuing decline in PC sales is attributable to the rise of touchscreen tablets, particularly Apple's iPad and iPad mini, which compete at lower price points.
But it's also worth noting that Apple recently began experimenting with much lower pricing on its Mac lineup thus far in 2014. Notably, a lack of new next-generation chips from Intel has helped push Apple to focus on more affordable options with its latest Mac models.
In addition to the new $1,099 iMac that launched in June, Apple also slashed $100 off its suggested pricing for new MacBook Airs that debuted in April to a new entry price of $899, making them the most affordable mass-market notebooks the company has ever sold.
Resellers have undercut those prices even further, likely with the blessing of Apple, which does not itself offer regular discounts or promotional pricing. Steep discounts went into effect on the new MacBook Air and iMac models almost immediately, most notably pushing the entry-level iMac down from $1,099 to just $979 in sales late last month.
Those discounts, however, didn't take effect until Apple began launching its new 2014 Mac models in April, after the March quarter data from Gartner. That means that any results from sales and discounts in the just-concluded June quarter will not be revealed until the company's fiscal third quarter earnings call next Tuesday.
In the meantime, Apple's strong March quarter performance in emerging markets remains "counterintuitive," Wolf admitted.
Chart via Needham & Co.
The fact that the Mac outpaced the overall PC market last quarter is not surprising --?Apple has seen its share of the worldwide PC market grow from 2.1 percent in 2005 to 5.5 percent in 2013, Needham & Co. analyst Charlie Wolf noted on Monday. But in the March quarter, Mac sales actually underperformed in established markets.
Year-over-year growth for Mac sales was down in North America, according to data from Gartner. In addition, PC sales growth exceeded the Mac in Europe and Japan.
But Apple's Mac platform saw explosive growth in Greater China, Asia Pacific, EMEA (Europe, the Middle East and Africa), and Latin America. In particular, Apple saw explosive growth north of 20 percent in EMEA, and exceeded 25 percent year-over-year growth in Latin America.
Wolf, who summarized the data in a note to investors that was provided to AppleInsider, is baffled by this result.
"We can see no obvious explanation for the disparity between developed and developing regions," he said. "It could be a one-quarter blip, which only the data for June will reveal. Or it could represent an inflection point in the Mac's fortunes. Only time will tell."
Apple's growth in emerging markets comes in spite of the fact that the average selling price of a new Mac has remained well above $1,000, placing the devices in a class -- and price range -- beyond the low-margin nature of the rest of the PC business. Market watchers believe the continuing decline in PC sales is attributable to the rise of touchscreen tablets, particularly Apple's iPad and iPad mini, which compete at lower price points.
But it's also worth noting that Apple recently began experimenting with much lower pricing on its Mac lineup thus far in 2014. Notably, a lack of new next-generation chips from Intel has helped push Apple to focus on more affordable options with its latest Mac models.
In addition to the new $1,099 iMac that launched in June, Apple also slashed $100 off its suggested pricing for new MacBook Airs that debuted in April to a new entry price of $899, making them the most affordable mass-market notebooks the company has ever sold.
Resellers have undercut those prices even further, likely with the blessing of Apple, which does not itself offer regular discounts or promotional pricing. Steep discounts went into effect on the new MacBook Air and iMac models almost immediately, most notably pushing the entry-level iMac down from $1,099 to just $979 in sales late last month.
Those discounts, however, didn't take effect until Apple began launching its new 2014 Mac models in April, after the March quarter data from Gartner. That means that any results from sales and discounts in the just-concluded June quarter will not be revealed until the company's fiscal third quarter earnings call next Tuesday.
In the meantime, Apple's strong March quarter performance in emerging markets remains "counterintuitive," Wolf admitted.
Comments
Seems to me that "computer" should be defined as "anything with a CPU that doesn't run iOS." That way we can be sure that iPads are not unfairly inflating Apple's numbers.
(Of course, when counting tablet sales, anything from kid toys to dedicated readers to touchscreen computers should be counted to keep from unfairly inflating iPad numbers...)
Seems to me that you don’t get what a computer is.
LOL. It's so unfair for Apple to sell millions of iPads. Of course we have to fudge the numbers to take away the unfair advantage and help everyone's self esteem¡
I'm fairly confident that was sarcasm...
What an analysis who is confused and can not explain the data. Okay hell must have frozen over that an analysis was unable to spin the data in a way which they could not manipulate it in a way which was bad for Apple and profitable to them.
Maybe analysis operating theories have been wrong all along, maybe consumers given the choose of cheap over a product with real value they will choose real value.
Or maybe the people with no money choose a phone over a PC and those with money bough a phone and a mac. So we now have phones canalizing cheap PC sales.
So Apple only failed to grow in a single market, the USA?
Pssh. Says you. I got punched in the face last week and it only cost me $4.95!
If you think you might at some point want to develop an iOS app, you need to get a Mac. I don't think it explains all of the sales bump in emerging markets, but I'm sure it's responsible for some of it. That, and the fact that the emerging middle class there needs its status symbols and that glowing Apple logo in the back of the screen is as ostentatious as the "LV" pattern on a Vuitton purse.
Computer users everywhere know quality and they know malware problems. They know effects of phishing and malware crap.
That Apple is benefiting from consumers figuring out the right answer is not surprising.
Computer users everywhere know quality and they know malware problems. They know effects of phishing and malware crap.
That Apple is benefiting from consumers figuring out the right answer is not surprising.
Pssh. Says you. I got punched in the face last week and it only cost me $4.95!
That's because you get punched in the face every week so you get a multi-punch discount.
I see the growth of PC in the US, Europe and Japan as caused by two things. One that business is starting to pick up and two, the XP EOL situation. Lots of businesses are upgrading to avoid any problems with lack of support and security patches, especially since Chrome will be ending support for XP as well.
In the emerging markets, I can only comment on Latin America but I have observed that wealthier people tend to buy Macs and people with lower income tend to get by on whatever they have, usually a handed down XP machine, at least until it breaks, and then buy the cheapest thing they can find, perhaps even a used PC. Nevertheless I am surprised how strong Mac sales appear in that chart for Latin America, because up until only a couple years ago it was almost exclusively Windows, at least in my experiences there.
Gartner seriously need to upgrade whatever junk they're using to generate charts.
Oh but I thought Apple's prices were keep Mac sales down because nobody can afford them? Hmm.....makes you want to rethink that IDC story from last week.
Remeber it is far easier to get a big percentage increase if your volumes are already low.