Business & Finance
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1/18/2007
04:53 PM
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Mac Sales Growth Eclipses Average For PC Companies

Unit sales were up 28% for the last 12 months over the same period the year before, but revenues were up even more dramatically: 40%.

Apple Inc. sold 1.6 million Macs in the quarter than ended Dec. 31, the company announced Wednesday, to end the year up nearly 30% from the year prior, easily outpacing U.S. and global PC growth rates. Analysts, however, don't think that the surge can be sustained.

For the quarter -- the first in its 2007 fiscal year, but the fourth in the calendar year -- Apple sold 637,000 desktop and 969,000 portable Macs, nearly the same amounts it sold in the quarter before. Unit sales were up 28% for the last 12 months over the same period the year before, but revenues were up even more dramatically: 40%. The spike was driven in part by an increase in the average Mac price. In the fourth quarter, the average price of a desktop Mac was $1,499, with portables averaging slightly higher at $1,501. Those numbers are substantially above the previous quarter's average prices of $1,392 and $1,363 for desktops and portables, respectively.

The sales pushed up Apple's share of the U.S. market to 4.7% by IDC's figures, 5.1% by rival research firm Gartner's. But more impressive, say analysts, is the Cupertino, Calif., company's ability to outstrip other PC makers, and the global average, in growth.

"Apple's done extremely well compared to the overall U.S. market," says Gartner analyst Mikako Kitagawa. While overall U.S. total sales slipped 3.2% in the fourth quarter of 2006 compared to 2005's last three months, Apple swelled its numbers by 30.6%.

IDC's numbers showed the same beat-the-average performance. "This is pretty significant growth," says David Daoud, an IDC analyst. "It highlights the fact that the company is taking the right steps. It's moved to more standard components with the shift to Intel, and has benefited from the growth of its own retail stores as well as inking deals with sellers like Best Buy," Daoud says. "Apple is much better at reaching out to customers than most all of its competitors."

Some financial analysts on Wednesday zeroed in on flat Mac sales between the third and fourth calendar quarters -- Apple sold 4,000 more in the third -- but Daoud and Kitagawa both say that the numbers, though stable, were actually impressive. "Apple always has bigger third quarter sales than in the fourth quarter," says Kitagawa, since the third quarter is the back-to-school season, when Apple traditionally does best as it sells to students and educational institutions.

"It's wasn't' bad, not bad at all," adds Daoud. "Compared to historically, Apple's maintained its position."

But the Apple won't be able to keep up the pace, Daoud says. "It remains to be seen how consumer will react to Vista in the second half of 2007. Apple does have an opportunity, especially in the first half of the year, to maintain the marketing and noise around its products, but we'll see competition from the other vendors.

"There's a certain saturation in the market, and a slowing down of the market in general. [Maintaining growth like this] is incredibly hard, in part because it's becoming a zero-sum game. For you to grow your market share, you need to take market share from someone else."

The next growth areas for Apple, Daoud predicts, will be Europe, the Pacific rim, China, and India. "The environment has been more favorable to Apple in the U.S., but that will be their next move. They will have to go there."

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