Mac shipments lowest in 1.5 years - first year-over-year drop in 5.5 years

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By: switchtoamac at: 2:40 PM on April 27, 2009 | Comments (2)

On April 22, 2009 Apple reported earnings for its fiscal 2009 second quarter that ended on March 28, 2009.  Although Apple's CFO commented that the quarter was "the best non-holiday quarter revenue and earnings in our history", Mac shipments were the lowest in 1.5 years and experienced their first year-over-year (year/year) drop in 5.5 years.

State of the Mac - Q2 2009 Analysis
Macs were the largest revenue generator across Apple's product lines accounting for 36.1 percent of total revenue in the quarter.  Macs dwarfed the revenue generated by the iPod which came in second accounting for 20.4 percent of total revenue.  Of note, the iPhone accounted for 18.6 percent of revenue.

The table and graph below detail total Mac shipments over the past fourteen fiscal quarters in thousands of units.  For example, 2216 units indicates 2.216 million units.  The Year/Year Change highlights the percent change in shipments over the comparable quarter from the prior year.  For example, Q2 2009 is compared to Q2 2008.  Note that during the quarter, Apple released updates to the entire desktop line; the iMac, Mac mini, and Mac Pro on March 3, 2009.

As shown, Q2 2009 Mac shipments experienced an 3.19 percent year-over-year decline versus Q2 2008 and a 12.20 percent decline versus Q1 2009.  This number also represents a 54.1 percent deceleration versus the 14.5 percent growth (yellow) Q2 2008 experienced over Q2 2007.  The quarter also marked the second consecutive quarter of declines (-3.33 percent and -12.20 percent), a trend last seen between Q4 2006 and Q2 2007 (orange).

Portable shipments fell 22.20 percent versus the prior quarter, Q1 2009 marked a new portable record of 1.796 million units (green).  The 1.398 million portables is the lowest level seen in 1.25 years (Q1 2008 - observable in the graph).  Mac desktops showed signs of life rising 12.36 percent versus the prior quarter but fell 4.44 percent over the year ago quarter.  The desktop uptick is likely attributed to the refresh indicated above.

Summary of Metrics
  • Total Mac shipments fell 3.19 percent year-over-year and 12.20 percent sequentially
  • Portable shipments fell 2.44 precent year-over-year and 22.20 percent sequentially
  • Desktop shipments fell 4.44 percent year-over-year but rose 12.36 precent sequentially
First year-over-year Mac shipment drop in 5.5 years
In our Q1 2009 and Q4 2008 analysis, we asked if the deceleration highlighted observed during those two quarters would continue into Q2 2009.  We now know the answer, not only did the deceleration gain steam but year-over-year Mac shipments also dropped for the first time in 5.5 years, a period dating back to Q3 2003.

Mixed signs?
Over the past year, Mac portables (MacBook, MacBook Pro, and MaBook Air) were the clear driving force behind Mac growth.  The stunning 22.20 percent sequential drop following the record set in Q1 2009 is alarming.
  • Is the portable drop a sign that buyers are deferring Mac purchases?
  • Is the drop a sign that buyers are turning away from the Mac price premium?
  • What does this have to say about buyer willingness-to-pay (WTP)?
  • What insight does this provide into potential switcher mindset and trends?
In our prior analysis, we stated, "Once Apple releases updates to the desktop models, we'll gain insight into buyer intentions and willingness to buy".  The Q2 2009 increase in desktop shipments occurred despite Apple releasing new models during the final month of the quarter.  In fact, the March 3, 2009 release date means that Apple had only 25 days to book desktop shipments in the quarter.  This is clearly a positive sign for Mac desktops.  What remains to be seen if the desktop trend can continue and if the portable trend will reverse.

Despite the underlying issues, it should be noted that the global economy is experiencing a significant contraction.  Whether or not Apple's Mac business is experiencing a more severe contraction versus its PC competitors remains to be seen.  We'll gain further insight in subsequent quarters.

2 Reader Comments

Nice analysis as you highlight that Macs are suffering a bit. I agree with you that desktops may be turning the corner thanks to the updates that took way longer than they should have. The plunge in notebooks is scary.

Nice analysis, but Apple does not operate in a vacuum.

Apart from netbooks (a market which Apple does not compete in), computer sales were down 15-17%. If you consider the fact that, as Apple stated, 2Q 2008 numbers were slightly skewed by the MacBook Air introduction, then you have to look at a 3% y-o-y reduction as quite an accomplishment. The first y-o-y drop in Mac shipments in 5 1/2 years corresponded with the worst set of economic conditions in 3/4 of a century. Imagine that. It's already quite evident that the "contraction" has been significantly less severe for Apple than for the industry as a whole - why you present this as an unknown is unclear to me. One question that you fail to address is, what portion of these numbers fits in with the normal ebb and flow of Apple sales, product introductions, and product updates over the course of a year, and for what portion is the recession primarily responsible. It may not be a question which can be answered, but it certainly should be asked.

I do believe that this is a case of customers deferring purchases. First, because buyers who are purchasing $300 net books were probably not candidates for Macs anyway. Second, the target of Microsoft's ad campaign - buyers for whom price is the primary differentiator - again, not prime candidates for Macs. As Apple's decline has not been nearly as steep, their ascent will not be as arduous as the economy recovers. And because they have committed to "innovate thru the downturn," they will be well positioned with products and mindshare when people start spending again.

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