“Apple will likely proclaim the past week’s Macworld expo a success… but deep questions linger as to the future of its computer business,” Red Herring reports. “Reaction from the Mac faithful to the first of Apple’s Intel-powered machines couldn’t have been more positive the day CEO and founder Steve Jobs unveiled them, despite worries that Apple was giving up its unique identity by switching from IBM’s PowerPC chips.”
“But it’s unclear if the initial love shown Apple’s new laptop, called MacBook Pro, and upgraded desktop, will be enough to translate into increased revenue and market share for the Cupertino, California-based company’s computer business,” Red Herring reports. “Apple’s market share is tiny—just 4.2 percent of the personal computing market, according to Gartner. Its bread and butter the past couple of years has been the iPod, but with the portable player’s somewhat low-key presence at the conference, even Apple seems to realize that it must shift emphasis back to computers to survive. It won’t be easy, experts said. ‘Macintosh is not doing very well,’ said Caris & Company analyst Mark Stahlman. ‘Sales of Macs in December were a disappointing 1.2 million. … Expectations were well north of 1.5 million—1.7 million would have been good.’”
“The machines introduced at Macworld may not have what it takes to lift Apple’s doldrums. Though Mr. Jobs touted them as between two and five times faster than current Macs, using Intel’s low-power Core Duo chip, Mr. Stahlman said those speeds aren’t actual measures of performance,” Red Herring reports.
Full article here.
Is it really so hard to realize that the closer to the Intel transition Apple got, the more people waited for the new machines? And it was 1.25 million Macs sold to be correct (according to Apple’s 8-K filed on Jan. 10, 2006); those extra 50,000 machines made last quarter the best for Macintosh ever: last quarter, ended September 05: Apple shipped 1.236 million Macs; the quarter ended June 05: 1.182 million Macs; the quarter ended March 05: 1.07 million Macs; the quarter ended December 04: 1.046 million Macs; and the quarter ended September 04: 836,000 Macs. That’s a pretty clear growth trend and accomplished in the face of a looming major processor transition, no less. Expectations for higher Mac sales were just not realistic. As the Intel transition progresses, any lingering “deep questions” about Apple’s Mac business will evaporate because Apple has started to take orders for and ship the kinds of Macs for which many were waiting.
For more about Caris & Company analyst Mark Stahlman, and an insight into his inability to predict how Apple is doing with their business, please see the related article link below. It contains some of Stahlman’s advice that would have been rather costly to investors if they had actually followed it. Clearly, Mark Stahlman is the one who’s not doing very well.
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Related MacDailyNews article:
Caris & Co analyst downgrades Apple, says ‘current enthusiasm might have overrun the realities’ – April 11, 2005
I agree with MDN’s take.
The first “Apple is going to die” article I’ve seen in a while. What are they smoking? Even without the iPod, Apple is making money, something very very, I’ll say it again, very few computer companies are doing these days.
Apple needs to start ADVERTISING the Mac!
Apple needs to tell the rest of the world about the Mac, OSX, security, iPod/iTunes/iTMS, iLife, .Mac, etc., etc.
I imagine they’ll wait for the Intel transition to be complete, before they launch a full-blown campaign though. Maybe by then they’ll be touting the ability to run Windows natively.
Sometimes it is just incredible to read these myopic musings over the murky future and possible death of Mac and Apple! Who did expect sales of 1.5 million Macintoshes? Anyone who did that can’t have paid much attention to what is going on with the switch to Intel etc. 1.25 is very good numbers in the light of that fact.
These people are looking and looking and simply not believing what they see. There must be something wrong with this picture. Apple is not supposed to do so well. Let us see; aha! They only sold 1.2 million Macs! That is clearly not good, because… uh, because… ah yes, they should really have been selling more. I think. Shouldn’t they? Oh yes, they should. Yes, they are going to die, that’s for sure.
Red Herring obviously does not understand the SPECSfp_2000 benchmark suite used and relied on by ALL manufacturers of Intel, AMD, and other chip manufacturers in reporting performance.
Steve’s presentation and the info on Apples web site is clearly about performance not some marketing finger in the air hype.
As to Market share – lets see now
At last count more than 500 companies were building Branded computers. Thats an everage market share of 0.2% so that makes Apples 4-5% 20 to 25 times higher than the average. Not to be sneezed at.
So I guess its just another red herring …. and you know what is said about red herrings … just another falsehood to divert from truth.
In a way, Apple picked a horrible time to make the transition, although it looks like their was no real choice in the matter. It gave microsoft another year to play catch up with Vista. Hopefully Apple can continue it’s Mac growth this year, and break the 5% barrier relatively soon. Lets face it, if Vista is a significant release by Misrosoft, and can manage to actually provide decent protection, the OS war will be over, and Microsoft will have won, and everyone will say Apple blew a huge opportunity, and they will be right.
For the life of me I don’t understand why Apple doesn’t price thier machines a little more competetively to gain some marketshare. Maybe they will announce a Mac Mini w/intel soon and it will be competitive. Please let this be true.
All together now: market share doesn’t make you profitable. Profits make you profitable.
There is no OS war … Apple will always be a niche because the average consumer is too stupid to appreciate and understand a quality computing experience and platform …
If you want apple to engage in the race to the bottom… and you won’t support better made products that cost a bit more … good bye and enjoy your pc hunk of crap …
MDN has it right yet again and AAPL Dude echos my sentiments exactly.
The TV ad for the new iMacs is a start, but it’s pretty weak. Apple’s TV ads are pretty much artsy-fartsy.
Some have said that it’s very difficult to tell about a computer in a 30 second spot, but everything needn’t be said in that 30 seconds. A series of short ads in heavy rotation will sell computers.
Dell does it, Gateway does it, HP does it too.
I cannot understand why Apple spends a lot of money on R&D just to shoot themselves in the head and not spend the advertising dollars to promote their products like Dell, Gateway or HP.
I have a CD of TV ads by Apple from the late 80’s and the early 90’s and some of them are pretty good.
I’ll be very happy when on this issue Apple really does Think Different.
If it’s $5.7 billion for the quarter, it’s either more than 1.25 million Macintoshes or SPJ was low-balling when he said it was 14M iPods.
Once again, 14M iPods generate around $2.8 billion in revenue and Apple will probably move around $1-1.25 billion in miscellaneous items like software, iTMS sales and displays. That leaves some $1.7 billion unaccounted for which points to around 1.4 million CPU units.
The only way that math doesn’t hold together is if Apple actually shifted closer to 15M iPods, and SPJ was simply rounding down.
If it’s really 1.25 million Macs for Q1/FY2006 – which appears to be the case if you go to 1:01.50 in the webcast and then verify them against the quarterly results – then Apple should only have generated around $1.625 billion in CPU revenues, add in 1.25 billion for miscellaneous (the only imponderable variable) and you’re left with figures that suggest that Apple actually sold 14.1 to 14.5 million iPods.
Good points all around. One more thing, though– Apple is not a one trick pony. It’s still on an upswing and hasn’t shown all is has in store. These writers need something to write about and since the unknown often means “potential doom,” that’s what they write about. Whatever.
Move on, nothing to see here…
It is what it is; just another shot at Apple bashing. Other than manufacturing a negative news story about Apple, I wonder what vested interest the writer has in the PC world that makes it necessary to spew this verbal dysentery.
Well, by not advertising, Apple may be thinking different — but in a different way than y’all want. The point of advertising is to put your product out there for the world to take notice, and ultimately buy. Apple’s retail stores accomplish the same purpose, but instead of using the ephemeral airwaves Apple’s investing in bricks-n-mortar stores that not only put their products in front of people in a way they can test and play with them, but also cash registers to take ther money. I’m sick to death of you people who seem to be genuinely convinced that Apple’s never considered advertising. I believe Apple is pretty smart and is allocating its resources very effectively.
Red Herring has always gone out of its way to paint a doomed picture for Apple. Apple is no longer just about Macs. Viiv powered media centers, possible mobile products, and a true video iPod are things we already know are lurking behind the curtain. Plus, if I can have a computer with an OS I really want which can also run an OS with some apps for my business needs….Hmmm. Slam dunk!!
Who owns Red Herring anyway? The Bill and Melinda Gates Foundation??
“doldrums” ?!!?@??
Must have put on his glasses made by microsoft to write this article…
MW – “Party” – …and he didn’t get invited to the party.
Yep, this is the Mark Stahlman who downgraded Apple shares in April 2005.
http://www.macdailynews.com/index.php/weblog/comments/5443/
In the 10 months since then they have DOUBLED in value!
” Expectations were well north of 1.5 million—1.7 million would have been good.’” Ridiculous! Those figures represent between 45% and 62% year on year sales increase. The whole PC market is expected to increase by onllly 10-12% in 2006
they say Apple is 4.1 % of total market, what are the percentages of the other companies, in the light of Apples recent eclipse of DELL?
guys, as weve all read over the years, when it comes to Apple & the mac market, those so-called pundits, experts, analysts… are nothing more than idiots in suit_n_tie trying to sound smart only to show their true stupidity, either they’re really that stupid or for some reason just always want to bring something negative even when things are positive.
Red Herring….what an appropriate title!
But Apple made a profit and increased Mac sales
That’s all that’s important.
Profitable market share is what matters, not just market share.
Apple will most likely never have more market share than Windows PC’s, as long it keeps selling more and more.
iPod was just a bonus, who knows what else Apple has up it’s sleeve?
Whats with the silly Winfixer ad? Aside from being the worst sort of “free” tool, that is in fact a malware funnel, it doesn’t actually install OS X, which is the real “Winfixer”
I’m just going to throw a couple of thoughts out there and see who runs with it.
First, while its always felt like a MacOS vs. Windows battle, traditionally, MacOS has always existed to support Apple’s Hardware; Apple’s “bread and butter.” With the switch to Intel, the playing field has changed, and Apple has the ability to change it even more drastically. I mean (as much as I hate to say it) the possibility of a Worldwide Empire of Windows on Mac exists. Its not a pretty sight, granted, but I’m thinking of all those IT teams that have plagued my life by devoting themselves to Windows and sneering at me derisively for choosing Mac. I could see a lot of these guys buying a Mac with the intention of using Windows.
Second, if you focus on the fact that Apple has always been a “hardware first” company, its easy to say that the OS exists to support the box and it would be asinine to release MacOS for PC, since OS sales would never amount to enough profit to offset the losses on their machines. But over the last several years, Apple has released some of the most powerful software available for film and photography. Not to mention a strong showing in Music and Art. If, all of a sudden, these applications were made available to the millions (dare I say billions?) of Window’s users by purchasing a copy of MacOS X for Intel, couldn’t Apple make a small killing on software alone?
I’d like to say I have a great idea of where Steve is going, but everytime I think he’s going to zig, he zags instead. I’ve just learned that everything is possible.
This just out:
“Red Herring falling behind. The company once known for it’s savvy evaluations of the computer market have fallen behind the times. They’re now three years behind all other pundits in their predictions of Apple’s future.”
“Yeah,” said Rob Enderle, former behind-the-times anti-Mac pundit, “they seem to have fallen into some kind of time warp.” They’re just beginning to evaluate the 867 MHz PowerPC chips. Boy, just wait, it won’t be long until the G5 surpises them. They sense it’s coming on the horizon. You can bet, they’ll be singing its praises for at least a year.”
“Back then,” Endrele continues, “we were all saying unless Apple gets better chips their future is murky. And yet, these guys are right on track. So you can’t really fault their analysis of the situation. You just have to pity them how embarrasing this is going to be if they ever catch up to the rest of the crowd. They’ve hired me to update certain portions of their pieces, so they don’t sound so out of date. But I can’t change the substance of the story. That would be unethical. So they’re lost in the past. I’m hoping with their kicking their crack habit, and spending some tiem at Betty Ford, that they might actally be abe to catch up. Maybe they’ll be with us when Apple switches to AMD? Who knows?”
Who says Apple´s computer business is profitable??? Now with iPod sales being the engine of Apple, lots “profits” can be hidden in the accounting of things.
If what he says is correct that computer sales were short by about 300,000 to 500,000 in December that is quite a bit.
This Macworld was a ho-hum event with obviously big things not shown for whatever reasons.
The quarter that iPod sales don´t increase…watch out!
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Interesting side note – digital camera sales peaked last year (probably because of cameras in phones) and camcorder sales dropped by 5% last year.
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And from personal experience after a couple of years of sending and posting photos via email and on websites I have noticed that I have stopped sending as many out and friends and families are doing the same. I asked other people and they experienced the same thing. The “coolness” or “newness” of sending personal videos and photos has matured and not done as much.
Anybody else experience that also?
So do people really need the iLife suite of products that much anymore – is that a reason to buy a mac???
I’m almost secure there is an error: somebody has said Apple sold 1.25 million CPU’s in the last quarter, not knowing the last quarter ended in september. If I’m right, until the present Apple has not confirmed any result (sorry for my English)