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Why Apple’s Mac Sales Are Slowing

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Aug. 22 2018, Updated 6:33 a.m. ET

Apple’s upbeat fiscal third-quarter results

Apple (AAPL) announced its fiscal third-quarter (ended in June) results on July 31, beating analysts’ estimates and recording higher revenue and earnings YoY (year-over-year). The upbeat results boosted the company’s stock and made it the first publicly traded US company to hit a market cap of $1.0 trillion. It beat Amazon (AMZN) and Microsoft (MSFT), whose market values are $915.3 billion and $819.5 billion, respectively.

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Apple’s Mac shipments fell 13%

While Apple’s iPhone and Services revenue grew 20% YoY and 31% YoY, respectively, in the fiscal third quarter, its iPad and Mac revenue fell 5.0% YoY. Also, whereas Apple’s iPad shipments grew 1.1% YoY to 11.5 million units, its Mac shipments fell 12.9% YoY to 3.7 million units—the lowest quarterly result since 2010. Mac revenue fell 5% YoY to $5.3 billion, and by 9% sequentially. Both iPads and Macs (which represent almost a fifth of Apple’s total revenue) dragged down the company’s overall revenue in the quarter.

Apple’s Mac products were upgraded and revamped in fiscal Q3 2017. Despite these updates, users have reportedly complained that their Macs do not meet professional needs. To address this issue, Apple released a high-end iMac Pro and a new MacBook Pro with an updated keyboard and faster processor options.

The slated launch of a new, lower-priced MacBook Air later this year, followed by the launch of three new iPhones, is expected to revive Mac sales. According to Cross Research, HP (HPQ) and Lenovo have released products priced similarly to the MacBook Air to compete for market share.

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