Apple optimistic on reversing the decline in Mac sales
Apple’s (AAPL) Mac is another important business for the company, accounting for more than 10% of Apple’s overall revenues in the last quarter. It is the third-most valuable segment for Apple after the iPhone and Services segments. Mac revenues declined by 9% in the last quarter, paralleling the struggles that the overall PC (personal computer) market is witnessing. However, Apple is optimistic about Mac’s growth returning in the future as it believes first-time buyers will drive growth.
In its latest major market survey, Apple reported that over half of Mac buyers were new. In China (FXI), this figure stands at 80%. Despite a decline in Mac revenues and unit sales, Apple has still gained share in the overall PC market. According to a report from IDC and as the chart above shows, Apple’s share of the worldwide PC market rose from 6.7% in 1Q15 to 7.4% in 1Q16. Lenovo (LNVGY), HP (HPQ), and Dell also gained market share, while smaller players ASUS and Sony (SNE) lost market share.
Factors impacting the overall PC market decline
The overall PC market declined by around 12% in the last quarter, according to IDC. The report states that “shipments were in line with conservative expectations for a decline of 11.3%, and anticipated a relatively weak environment during the first half of 2016 as Windows 10 enterprise upgrades largely remained in pilot phase while consumer demand remains weak. The volatility in stocks, commodities and currencies also helped depress shipments.”
The PC industry was impacted by PC vendors focusing on clearing out the Microsoft (MSFT) Windows 8 inventory rather than adopting Windows 10 completely. Also, users were more focused on upgrading their existing PCs with Windows 10 than buying new computers.