Apple Blames Low Mac Sales on iMac Supply Constraints

[MacRumors]

Today's quarterly results call revealed that Apple's Mac sales are down 16% compared to last year. Apple sold just 312,000 Macs per week compared to 371,000 per week during the same time period a year ago.

Peter Oppenheimer noted that Apple has experienced significant constraints on the new iMacs, and was only able to ship them during December. Without these constraints, he says, Mac sales would have been higher.

IDC estimates the global personal computer market contracted by 6% during the December quarter. We introduced the new 13-inch MacBook Pro retina display as well as our stunning new iMacs in October. As we projected a quarter ago, we were significantly constrained with respect to the new iMacs and were only able to ship them for the final month of the December quarter. We believe our Mac sales would have been much higher absent those constraints.

Apple was only able to provide 3 to 4 weeks of inventory, below its target of 4 to 5 weeks. Apple's newest iMacs have been plagued with production issues, mainly due to a new lamination process used for the displays.

Cook further addressed this in the Question and Answer section.

The best way to answer this is to look at the previous year. The difference is $1.1 billion from last year. iMacs were down by 700k units year over year. As you remember, we announced new iMacs late in October. Announced they would ship in November and December. Did ship by those dates. Limited weeks of ramping on those products during the quarter. Significant constraints on the iMac at the end of the quarter. Sales would have been materially higher without those constraints. Tried to share this on the conference call in October.

If you look at last year, we had 14 weeks in the quarter last year. 13 weeks this year. Channel inventory was down from the beginning of the quarter by more than 100k units. Didn't have the iMacs in channel. These factors bridge more than the difference between this year's sales and last year's.

Cook also mentioned a few other minor factors, including the weak PC market and the impressive sales of the iPad. Apple sold more than 23 million iPads, and Cook said that some cannibalization was almost certainly a factor.


Article Link: Apple Blames Low Mac Sales on iMac Supply Constraints

[simonb76]

Somehow I could see that coming considering most people are tight with their money in the present economy.

[Lesser Evets]

Originally Posted by simonb76

Somehow I could see that coming considering most people are tight with their money in the present economy.

I wonder about that AND the price-vs-function of the iMac.

Apple should consider making sub-iMacs that are maybe 20" and less processing power and connectors to make something like an iMac-mini for $999. One USB3, one TB, one Ethernet, one headphone output, mono speaker, small camera, etc.

At the moment they supply a barely-mid-level machine at a price a little above worth for starters. A good machine, but most budget conscious people can go with the mini and regret nothing.

[Peace]

I think Apple is in the middle of moving away from samsung = Constraints.

[Verbatim Cookie]

Originally Posted by MacRumors

How is the first quarter of Apple's fiscal year defined if it's not October 1 to December 31?

Originally Posted by Marlor

When I realised I couldn't open the machine to change the hard drive, I bailed on my purchase of a 27" model. That's basic maintenance - like changing the oil on your car.

WAT What are you doing with your Mac(s) that makes so much use of the hard drive? And I assume you need lots of storage space or else you'd just put in a solid state drive.

[blackhand1001]

Originally Posted by Lesser Evets

I wonder about that AND the price-vs-function of the iMac.

Apple should consider making sub-iMacs that are maybe 20" and less processing power and connectors to make something like an iMac-mini for $999. One USB3, one TB, one Ethernet, one headphone output, mono speaker, small camera, etc.

At the moment they supply a barely-mid-level machine at a price a little above worth for starters. A good machine, but most budget conscious people can go with the mini and regret nothing.

No ones gonna pay 999 dollar for a machine with that kind of crap in it. A mono speaker on a thousand dollar desktop.

[bedifferent]

Originally Posted by Lesser Evets

I wonder about that AND the price-vs-function of the iMac.

Apple should consider making sub-iMacs that are maybe 20" and less processing power and connectors to make something like an iMac-mini for $999. One USB3, one TB, one Ethernet, one headphone output, mono speaker, small camera, etc.

Agreed. I understand for many this is a mobile market, but at least have one decent desktop/tower system (not talking AIO). Selling a power system with three year old specs for thousands of dollars is just... sad. The new iMac's aren't wowing many for that price range.

Apple has neglected a market, and sales are showing. People state that Apple leads markets, not follows. Yet these same people claim Apple is neglecting power systems as it is a "niche" market, and thus are following sales into the consumer market. Which is it? you can not have it both ways.

Yes, power systems are a smaller market than the iDevice/notebook market. However, that doesn't mean there aren't power users/businesses that need a tower system. PowerMac's and Apple's CCFL LCD's were great, affordable systems that many invested in as they allowed upgradability, expandability, and the use of different displays. AIO systems are not as flexible, repairable, and/or useful longterm. This has forced many, from studio's to power users, into Linux, hackint0shes, or Windows systems. Adding up the thousands many businesses invest in hardware and licenses, it adds up.

[MacCruiskeen]

While I would agree that there are plenty of reasons why consumers might hesitate to buy a new mac right now (my own iMac is almost 4 years old at this point and still works fine--I guess I'm in the minority in waiting until my current system fails irreparably before buying a new one (as far as I'm concerned, these things are just too expensive to do otherwise)), presumably if demand were more constrained than supply, there wouldn't be 2-3-week waits to get a new machine shipped to you. A long wait time still implies more demand than available supply.

[nuckinfutz]

Originally Posted by bedifferent

Agreed. I understand for many this is a mobile market, but at least have one decent desktop/tower system (not talking AIO). Selling a power system with three year old specs for thousands of dollars is just... sad. The new iMac's aren't wowing many for that price range.

Source please:

Apple has neglected a market, and sales are showing. People state that Apple leads markets, not follows. Yet these same people claim Apple is neglecting power systems as it is a "niche" market, and thus are following sales into the consumer market. Which is it? you can not have it both ways.

No the sales are showing that numbers are down because of constrained availability.

Yes, power systems are a smaller market than the iDevice/notebook market. However, that doesn't mean there aren't power users/businesses that need a tower system. PowerMac's and Apple's CCFL LCD's were great, affordable systems that many invested in as they allowed upgradability, expandability, and the use of different displays. AIO systems are not as flexible, repairable, and/or useful longterm. This has forced many, from studio's to power users, into Linux, hackint0shes, or Windows systems. Adding up the thousands many businesses invest in hardware and licenses, it adds up.

Yet Apple announces their best earnings and sales ever proving that the users you speak of are inessential to Apple's success.

Response in-line in red

[bedifferent]

Originally Posted by nuckinfutz

Response in-line in red

Obviously my post was opinion based, I never stated otherwise.

[2bcool2]

i got an 27" iMac ! yayyyyyyyyyyy

i dont like the fusion drive ... i wanted a 256gb ssd ...... i hear it spinning up and down wtf

[Brian Y]

When Apple don't count it as a sale until it's shipped and payment taken - that's going to affect figures badly. I think we all knew this though :P.

[Macmaniac]

If I were a Financial Analyst I would make millions predicting **** like this. As a normal person I look at the facts and draw the same conclusion. Amazing society we live in.

[Raftysworld]

I feel like Steve wouldn't have allowed supply constraints like this to happen.

[macs4nw]

Originally Posted by Raftysworld

I feel like Steve wouldn't have allowed supply constraints like this to happen.

Got the meme, nevertheless Steve had a great supply-chain man, maybe that's what TC needs. One man can't run the company while at the same time securing components.

[lifeinhd]

If they had a new Mac Pro, would be even higher

[mrsir2009]

16% down is quite a lot though, and desktop Macs make up only a fraction of the sales of portable Macs...

[blackhand1001]

I am sorry but apple sells 10 times as many laptops as they do desktops. The imac is not the reason mac sales were down 22%.

[1Alec1]

BS.

- The new iMac has non-removeable RAM, a deterrent for some users. And the SD card slot is on the back, WTF.

- It took Apple ridiculously long to update the iMac. Dell can push out an update every 2 seconds. All they have to do is make the internal components NOT over a year old. No need to change the style, just update it.

- Apple clearly doesn't care about desktop computers. If you go to an Apple store, there's that one iMac in the corner while the posters on the wall and the ads all tell you to buy something else.

[iBug2]

Originally Posted by blackhand1001

I am sorry but apple sells 10 times as many laptops as they do desktops. The imac is not the reason mac sales were down 22%.

They already said that the iMac sales were 700K less than last year. Yes that doesn't make the 1.1 million loss (assuming that the mac wouldn't shrink or grow), but still that's a lot. So what you mean is that the iMac isn't the only reason mac sales were down.

[Karma*Police]

Originally Posted by blackhand1001

I am sorry but apple sells 10 times as many laptops as they do desktops. The imac is not the reason mac sales were down 22%.

They also had one less week of sales this year which is huge. That's why they reported so many weekly comparisons YoY because a straight up YoY comparison wasn't fair. Also, I think Tim mentioned there was some cannibalization from iPad, but a 2 month drought of iMacs and one less week of sales for all Macs could easily account for the drop in Mac sales from last year.

[LastLine]

Originally Posted by mrsir2009

16% down is quite a lot though, and desktop Macs make up only a fraction of the sales of portable Macs...

Honestly, this isn't as true as you'd think. I work in an APR, and I'd say our iMac sales are probably 40% of our CPU sales. We're feeling the iMac constraints, trust me. This headline is, as they say, a no brainer.

[cameronjpu]

The supposed supply chain genius engineered this problem.

[Chupa Chupa]

Originally Posted by cameronjpu

The supposed supply chain genius engineered this problem.

BINGO! Totally foreseeable & unacceptable. You don't half-ass launch a new product during the holiday season. If we understand this then surely Tim Cook did but he launched the new iMac anyway & now shifts blame for Apple missing revenue estimates. AAPL has lost $250 per share under his tutelage.

[InfoTime]

Hmm, Mac desktop sales down? I don't know, maybe....

http://en.wikipedia.org/wiki/Osborne_effect