Apple’s Mac sales fall, economies shudder

Is it too early to panic?

Apple, Mac, PC market, Brexit, recession
Credit: Lee Davenport/Flickr

The latest PC marketshare figures from Gartner and IDC suggest Mac users are anxious for new MacBooks, as Mac sales fall and economic weakness impacts PC sales everywhere.

Apple’s bell chimes

“Apple continues to face an increasingly competitive market as it awaits a refresh of its PC lineup. As a result, shipments experienced a decline from last year,” said IDC.

IDC says Q2 2016 worldwide PC shipments fell 4.5%, totaling 62.4 million units, with Apple and Lenove particularly impacted. Apple fell from a 7.4 percent share in Q2 2015 to a 7.1 percent share in Q2 2016, with an 8.3 percent drop in year-on-year shipments, they said.

Gartner says Q2 2016 worldwide PC shipments fell 5.2%, totaling 64.3 million units. The analyst say Apple’s market share held, year-on-year, at 7.1 percent, though its year-on-year shipments fell 4.9 percent.

Decline almost everywhere

A strong dollar and relatively strong economy leaves the US as a bright spot within the global malaise. However, Apple reportedly saw weakness even there. IDC claims Apple’s PC market share declined year-on-year from 12.7% to 11.2%, while Gartner noted this fell from 13.8% to 12.3%.

“All regions except North America experienced a PC shipment decline,” said Gartner principal analyst Mikako Kitagawa. “Asus, Apple, and Acer are battling it out for the fourth position in worldwide PC shipments for the second quarter of 2016, as preliminary results get finalized,” the Gartner report claimed.

Price rises are also being factored in as a strong dollar against weakening currencies means in future PC sales will also be impacted by inevitable price increases.

Brexit blues

The biggest headwind Apple and everyone else faces is the impact of the UK decision to leave the EU. In conjunction with deep political instability and an increasingly incompetent seeming political class in the UK, Brexit is expected to cut UK 2016 IT spending by 10 percent, said Canalys. This will impact worldwide and seems likely to drive the final nail into the UK’s illusory recovery, driving chronic and sustained recession.

"Even the best case scenario calls for PCs to face significant challenges, with a somewhat fragile stabilization in the long run. The preliminary results did not capture the potential repercussions from the Brexit vote, which is expected to affect the timing and scope of spending plans in Europe," said Jay Chou, research manager, IDC Worldwide PC Tracker.

The big thing no one’s saying

Looking at historical data it is noteworthy that PC sales are slumping at a significantly faster rate than during the 2008 recession.

Apple has enjoyed steady increases in Mac sales every year, far exceeding industry growth. It saw eight consecutive quarters of year-on-year Mac sales increases before encountering a 4 percent drop in the final 2015 quarter and a 12 percent decline in Q1 2016.

That Mac sales – which remained steady during the last recession -- appear to being impacted this time around is a red flag warning of how severe these fresh challenges are. That Apple is impacted means something – the company has been estimated as accounting for 0.5 percent of US GDP and 0.15 percent of global GDP, so its weakness will have a material economic impact.

Are new Macs enough?

No matter how you spin it those declining sales figures in almost every territory for almost every manufacturer reflect a global pattern that isn’t just impacting Apple but everyone else as well.

Within this tough environment I don’t think even new Mac introductions will be the magic bullet to help Apple to regain momentum.

Economic challenges in conjunction with a PC industry shifting to mobile means Apple’s future success depends on the company continuing to manage a successful pivot to generating sustainable businesses through services provision; the creation of additional recurring income streams and growth in developing markets.

Apple will report its Q2 figures on July 26.

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