Blog: Mac Sales Drops Help Microsoft, But It Ain't No Cure

Blog: Mac Sales Drops Help Microsoft, But It Ain't No Cure

You knew it would happen eventually. The faltering economy finally caught up to Apple, as Mac retail sales dropped 6 percent in January compared to January 2008, according to research firm The NPD Group.

Apple, welcome to earth in 2009, where premium pricing doesn't cut it anymore.

The 6 percent drop is only one month of data (and a January in a bad economy no less) so it's not as if the sky is falling on Apple. Yet it was Apple's first year-over-year decline in three years, says NPD, and is a sign that consumers are valuing price over lifestyle.

This can only be good news for makers of PCs and lightweight, low-cost netbooks. Windows-based PCs are cheap, most in the US$650-$850 range. Netbooks are really cheap ($350 or so), and exploding in popularity. Research firm IDC predicts that netbook unit sales will grow by 50 percent over the next two years. We live in a time where cheap is trumping cool, and probably will until this economy turns around. That's bad news for Apple, which has no netbook (that we know of).

Nevertheless, Apple's losses are not necessarily Microsoft's gain. Not in this economy.

The past four months say a lot about consumer spending and the economy.

According to NPD, retail PC sales have had steady year-over-year growth each month since October, peaking at 16.6 percent growth in January. Mac unit sales plummeted from 27 percent growth in October (after it unveiled a new line of MacBooks) to -0.3 percent in November to 0.4 percent in December to -5.5 percent in January.

"It has much more to do with pricing than with just netbooks," said NPD analyst Stephen Baker. "There's been some switching even among Apple buyers to the US$999 [MacBook]. That's taken some sales away from the next tier up."

There seems to be no reason, other than an economic turnaround or reduction in Mac prices, for consumers to start buying Macs in droves again — there is no new line of MacBooks or iMacs coming, and there is no holiday or back-to-school season on the horizon.

So if price is going to trump value for the foreseeable future, what does it mean for PCs and netbooks? It's not a free pass, that's for sure. The entire computer industry, Windows-based or not, is likely to suffer this year. Lethargic PC sales are the main reason Microsoft missed its earnings estimates for its fiscal Q2, and forced the company to start a round of unprecedented layoffs. IDC forecasts that PCs will grow by only 9 percent over the next two years.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags MicrosoftAppleIDCPCHewlett-PackardWindows 7vistawindows xpmacbook

Show Comments