Apple Now Ranked as Fifth Largest Global PC Vendor Due to Price Cuts, Improved Demand

[gprovida]

If Price Cuts were so important why do PC sales suck?

The mindless explanations and narratives of Apple's success over the last 4-5 years in growth versus stagnant to diminishing PC sales includes "Apple reduced their prices."

While lower cost certainly can be factor, it is at best a minor one since Apple's ASP remains pretty stable on all product lines and the competition is selling at increasingly lower prices and yet their sales are dropping and Apples are increasing not just this quarter but over the last few years, I recall 33 of 34 quarters show increases in sales.

In addition, these analysts have been poor predictors of Apple's sales, fail to update their overall picture when Apple's real numbers show up, cherry pick what is and is not a PC [Chromebooks or tablets], etc. and most interestingly do not report PC sales drops sans Apple's growth. In other words, PC sales are a lot worst and have been for quite some time but the effect is somewhat masked by Apple's increase in sales.

So why is Apple more successful? If the standard mindless narrative by the analysts is demonstrable wrong, is there any real attention to understanding what is causing the drops? So far I see no evidence that the press or the analysts are really trying to sort this deep systemic problem out.

Something is deeply wrong in desktop and laptop PC business and it is more than low margins and market maturation.

 

[Heltik]

Would be interesting to see the actual value of those sales. I reckon globally Apple must be close to 10% of the market on retail price?

I was thinking the same... But in terms of % profit in the market.

 

[canman4PM]

I teach at a state university in Pennsylvania, and my casual observation suggests Apple has made major gains in the education market. When I started teaching at my current institution (2008), I'd say 1 out of 10 computers I saw students using was a MacBook (the white unibody). This year, I see about five MacBooks (Airs/Pros) for every one PC. Granted, my observations are limited to student common areas and the classroom, but it still represents a drastic shift in education penetration over the last 6 years.

Still, Macs (iMacs) are not cost-effective at the university-level. Our computer replacement cycle is every four years, which negates any long-term savings that a Mac's higher reliability may generate. I believe the university pays around $600 for the standard Lenovo All-in-One PC (Intel Core i3 8GB 240GB Win7) that faculty receive and is placed in the majority of labs. I believe the base iMac costs the university $1000, which is why it requires a special request for faculty to get Macs in their offices.

As an aside, the university deferred our computer replacement for an additional year to skip over Windows 8.

And yet my 24" 2007 (that's 7 years old, bye the bye) Core2 Duo Extreme is running Mavericks, is supposed to handle Yosemite, no prob and still kicks the crap out of my kid's (Christmas) 2012 HP 15" quad-core laptop ($699). So assuming Yosemite does work on this computer, it's going to get at least 8 years full bore service. Assuming Yosemite is the last OS update I can make, I should be able to get a good ten years out of this machine. And by "good" I mean still operating at a reasonably high level. I figure it could probably limp along for another 5 after that, if used for the normal day-to-day stuff like email, music, word processing, web browsing. Leaving the high-end operations like photo processing, movie editing and GarageBand music making to its replacement. I paid $3k for the machine working out to $300/year per my "good" definition. Still double your Lenovo cost, but I don't pay for any extra software (or later upgrades to it, as Pages, Numbers, etc are included), didn't have to change over to a new unit the 2.5 times in ten years that you will (pain in the but) and I haven't paid for an anti-virus program in 7 years.

I do have to admit, though, if the new unit comes with a 5K monitor and is close to the $3,500 a current fully loaded model costs, my current computer may get early retirement.

 

[canman4PM]

The average person isn't building a computer. They're looking for something economical to do their task and not sell their soul doing it. I'm not taking away from Apple as I have an IP6+, ipad2, Apple tv, and iPod nano. The MacPro may not have the "best" but it surely can probably do soo much more than the average PC which is costly.



So you're suggesting that the average person just dig in their pocket juuuust a lil bit deeper to get the product that will be more cost effective in the long run. Good luck on trying to convince the masses on that. People are watching their pennies, bills and everything else. Some people just don't have it.

The average Mac is over 1K while the average PC is under 1K. I have a PC and it has been with and going strong since 2009/2010 or so. I'll probably get a Mac next but it ONLY out of desire and not the need for such high performance.

You're quite right. I remember seeing a report years ago that calculated the cheapest car to own at the time. This was based on the "total cost of ownership over a 5 year period." It included insurance, gas, service and repairs, trade-in value, etc. the winner was the relatively expensive Buick Park Ave, which, if memory serves, was selling for over $40K at that time. At the same time a fully loaded Civic was under $10K. Again, if memory serves...

You can see my numbers (in the post) above for my personal experience owning my Mac. I should also add that my 7 years with my computer have been exactly problem free. But you are quite right. It's a hell of a lot harder to come up with (or qualify for a loan of) $45K vs $10K, per my car example. Not in most people's reach. Same-same the $3000 computer.

Truth is, us Mac owners are Mac owners because we want 'em. Period; end of list. I guess the good news for you is, since you are getting one anyway, content yourself with the fact that in the long run, you'll do well, money-wise.

 

[canman4PM]

Apple really needs Windows as a pre-installed Boot-camp option on new Macs.

No thanks. I use Windows at work and in 7 years haven't missed it at home. So let's leave it as a pay-extra-option for those that want/need it. Most of us don't want to pay extra for what is never going to be used by most of us.


In other words, I pay to use OS X. They have to pay me to use Windows. 'Nuff said.

 

[canman4PM]

My Mac Pro is only 8 years old and while it functions admirably, as far as Apple is concerned it is dead. Buying a computer every 6-7 years for several thousand dollars in order to have current features does have it's cost.

My poor Mac Mini G4 that I bought in 2005 was an ever worse story "the cheapest, most affordable Mac ever" ended up being very untrue only a year later.

I've got a 2005 Dell GX620 in the garage that is slow (SSD helped), but it still works no problem and runs current version of Windows, albeit 32 bit.

Apple is a luxury item. There is nothing wrong with that. But I wouldn't try to justify that owning an Apple is somehow a better choice in the long run from a financial perspective. They have a real history of forced obsolescence across all of their products.

It is improving, though. Normally, with each new iteration of the OS, the list of compatible Macs drops off the oldest computers from the previous list. The last two OS X upgrades did not do this. Yosemite is not supposed to either. As such, my Late 2007 iMac is currently running Mavericks and is supposed to handle Yosemite - we shall see. See my post above, about 3 up or so. I expect to get 10 years out of my Mac before it starts to show real sighs of age. My first iPhone was a 3G, that stopped being supported after 2 years, 3 months (iOS 4.3 was the highest she could take) after they debuted. My 4S that replaced it, runs IOS 8, so it'll be ok for a full 4 years, at least. [side note: Canadian wireless companies required 3 year contracts until recently, hence my slow upgrade cycle. If anyone cares.] This was also true of the iPad.

Now if you bought a Mac Pro 'cause you're doing really high end stuff...

...then you're a pro user and would be upgrading every few years despite the cost, no matter what system you used. Just a cost of doing said business.

Otherwise you're right: buying a Mac Pro (or for that matter, a fully loaded iMac) is a luxury. But one that is going to cost me a mere $300/year. Not too shabby.

 

[canman4PM]

I don't think this is a bad thing. I think this is really an amazing testament to the level of integration we are seeing in current computers. I have been extremely impressed with the graphics chips built-in to Intel's over the last several years. I can play World of Warcraft very respectfully using just the Intel HD4000 graphics chips. Meanwhile I do not get the heat or noise of a separate video card. And there is the Iris Pro version which is several times better.

The "SoC" or system on a chip is really making all this happen. Intel chips have the processor, the graphics chip, the memory controller and the PCI-express controller all built-in to the chip. For some Haswell chips meant to be used in Ultrabooks, the entire PCH (which encompasses USB and SATA connections) is integrated into the processor die. So you have almost the entire computer enveloped within one single chip.

This has allowed for all kinds of benefits.

• Less production cost of the chips themselves
• less heatsink material needed
• less PCB needed (the actual board the chips mount on)
• smaller cases due to less heatsink and physical real estate
• smaller power supplies

We now have $100 8" touch screen tablets running FULL BLOWN Windows 8. I don't care what you think about Windows, we are talking a fully functional mainstream operating system that runs on a $100 computer. It even comes with Microsoft Office already (which should come with Windows anyways in my opinion).

$100 any type of computer was practically unheard of a year ago. Only Chinese Android tablets hit that price point and they had horrible reviews for usability and (lack of) functionality. I bought my Surface RT last year for what I thought was a stellar deal at $180. Now you can buy a 10" Tablet running real Windows for just $20 more. Not some lame RISC processor on a gimped OS (Windows RT and Chromebook) that isn't compatible with the rest of the world, but a real bonafide Intel processor that will run anything.

The point here, is that computers have come such a long way in the hardware department over the last 5-6 years, yet the software requirements haven't changed that much. As a result there is no reason an average user should be paying $1000 for a computer anymore. They are commodity items. And they have commodity prices.

If Apple can convince people to spend money for features outside of the hardware department (such as software, materials, form factor, status symbol) then that is great. We can have luxury brands. But the other side of the spectrum is equally exciting right now.

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I agree. I didn't buy an Apple phone, for its phone qualities. I bought it because I love iTunes and listen to music a lot and have several iPods. Same with buying an Apple TV and now I have 2 Macs running 24/7.

It's the integration, and I can't stress this enough to people who only look at their products individually.

Well said. Both top and bottom. The bottom point is the one most non-Apple people don't get. And to be perfectly fair, don't need/want. I recently converted my mom. But she's a daily computer user (works at home) using all the usual productivity apps, loves her iPad and was a fairly high-end Blackberry user. Once I showed her that the Mac, iPad and iPhone work fairly seamlessly together, she converted over. buying an iMac a couple of years ago and her first iPhone this past year. And now she's really become an iTunes junky and a making-photo-books-in-iPhoto junky.

If Blackberry had made a computer...

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You actually just need to have less losses. One thing that has always intrigued me though is peoples priorities. Mine aren’t perfect for sure but in the recent financial climate the number of people still buying high value goods, (not just Apple ones), was astonishing.

Even during The Great Depression, there were still rich people buying yachts.

 

[westrock2000]

So why is Apple more successful? If the standard mindless narrative by the analysts is demonstrable wrong, is there any real attention to understanding what is causing the drops? So far I see no evidence that the press or the analysts are really trying to sort this deep systemic problem out.

Something is deeply wrong in desktop and laptop PC business and it is more than low margins and market maturation.

Much of what the more critical technology journalists have said is that there simply isn't a reason to upgrade computers anymore. Starting with the Core 2 and moving in to the i3/i5/i7 model the processors have out paced the software requirements for the average user. Despite what people think, 4GB of memory really is still enough for the vast majority of users, and computers have been shipping 1TB drives for years now. The integrated graphics built-in to both the AMD and Intel processors are more then enough for casual computer usage.

There just simply isn't a good enough reason to upgrade when you take into account other costs.

But enter Apple. It's a new user experience, it's an attractive product, and there is a status symbol attached to it. Only 10% or whatever the report said of the population have them. That is status and exclusivity. All of those things combined are enough of a reason for people to buy something new.

But that appeal will diminish as Apple's foothold grows. The growth can be sustainable for a while, but eventually it will have to even out as less people convert from Windows (smaller ratio of PC to Apple) or the current Apple users hold off on buying another model due to the price.

 

[Gudi]

Consider that one could have purchased Windows 7 back when the EOL'd Snow Leopard was alive and that there are still five more years to go before W7 dies. At Apple's current pace even Yosemite may be gone while W7 is still supported.

Please elaborate on what it means that Windows is "supported"? Obviously it doesn't mean it gets updated with new features for free like OS X and iOS. And I've never heard of any viruses specifically targeting Snow Leopards end-of-life vulnerabilities. The reason I still run Windows 7 is because I don't care for Metro UI and I won't pay anything to enter its brave new world. At Microsoft's current pace I doubt I will ever again install a new version of Windows.

 

[Gudi]

And if you want that, you will have to go PC, not Apple. Because you can build a PC yourself, and that allows you to cherry pick the best choice for each component. For instance, even a MacPro doesn't have the best CPU, the best SSD, the most reliable PSU or the best GPU...

A computer is a system. In a system the whole is more than the sum of its parts. You don't create the best computer in picking the best components. If you do that, you will end up with a huge, heavy, hot, loud box under your desk. The Mac Pro beats your best self-build PC in anything but price.