Apple watchers have already seen the headlines (as close to the ‘writing on the wall‘ as we can get). ‘Mac Sales In Tailspin.’ Or, ‘Mac Shipments Decline.’ Or, ‘Aging iPad’s Sales Drop.’ That kind of attention grabbing headline.
Both IDC and Gartner, those well known institutions who excel in projections from Suppositoryland, say the PC market continues to shrink but the Mac is shrinking more. In fact, so is the iPad line, down about 15-percent in the last quarter (compared to the year earlier).
What’s going on?
In the post-PC era the tablet, as exemplified by the iPad and competitors, has negatively impacted the PC industry, including the Mac. While PCs have been in decline for a few years, the Mac– until recently– had escaped the downward trend.
Obviously, the iPhone’s is Apple’s bread and butter product line, and it’s doing well despite an onslaught of cheaper Android smartphones, and desperate moves from Microsoft and Samsung. Is there less value in the Mac and iPad line for Apple these days?
The Mac contributes over $5-billion in quarterly revenue, while the iPad is responsible for, on average, about $7-billion per quarter. Combined, that’s well over $40-billion in revenue, and probably brings $10-billion to the company’s bottom line, even during tough economic times.
Where is the love, Apple?
The Mac seldom gets featured in Apple product presentations, and the company has been notoriously slow to upgrade the Mac to newer, faster Intel CPUs (the MacBook Pro, for example, still doesn’t have the Haswell chips the MacBook Air received months ago). After announcing the long awaited Mac Pro in the summer, Apple has said little since. Worse, the iPad hasn’t had any kind of a refresh in a year, and major competitors already have tablets with better screen resolution.
What’s going on?
While every PC manufacturer struggles to eke out a meager profit, Apple seems content to let the Mac run its course without taking advantage of weakened competitors, either with new products to spur buyers, or lower prices to crush what’s left of the PC market. Even tablet manufacturers have yet to show a profit but have carved away a large chunk of the marketshare once owned by Apple’s iPad with lower prices on hardware with better specifications. Even with the iPad Apple seems content to drift along, collecting profits, but not dominating in PCs or tablets while competitors are visibly weakened.
Here’s what I think.
Apple does not know how to dominate a market. The company’s executives seem to assume that Apple’s share of any market segment will be less than competitors, so continues to build products for customers in the premium segment while ignoring the masses that it assumes it cannot attract.
Obviously, that’s a strategy that has paid big dividends for the company and shareholders in the 21st century, but it highlights Apple’s character. The company does not want to dominate. Apple wants to prosper by designing and building products that delight a minority segment of the customer pool, not the great unwashed masses who cannot differentiate Apple’s products from cheaper knockoffs. That’s just the way it’s been. That’s the way it is. That’s likely to be the way for a long time to come.