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Apple to concede Mac sales shrinkage, analyst predicts

But the worst is over, says Wall Street analyst, who points toward China, new iPhone and Snow Leopard

April 21, 2009 12:00 PM ET

Computerworld - Apple Inc. on Wednesday will report that it sold fewer Macs in the first quarter of 2009 than it did in the same period a year earlier, marking the first time in nearly six years that the company will have acknowledged a sales slide, a Wall Street analyst predicted Tuesday.

When Apple releases earnings figures, Brian Marshall, an analyst at Broadpoint AmTech, expects that the company will report a 5% drop in Mac sales during the year's first three months compared to the same quarter in 2008.

Various analysts have pegged first-quarter 2009 Mac sales at the same general level, from 2.1 million to 2.2 million machines. In 2008's first quarter, Apple sold nearly 2.3 million Mac laptops and desktops.

The last time that Apple reported a year-over-year sales dip was in July 2003, when it said it had sold 771,000 Macs in the year's second quarter, down 5% from the same period a year earlier.

Quarter to quarter, Apple will likely report a slide in sales of about 10%, Marshall said. "My assumption is that international sales will be essentially flat, but that U.S. sales will be down about 10%," he said. Apple traditionally posts poor numbers in the first calendar quarter, which comes after the holiday selling season of the year before. In early 2008, for example, Mac sales were off about 1% from 2007's fourth quarter.

First-quarter sales of iPhones and iPods will also be sharply down compared to last year, Marshall said. According to his estimates, Apple sold about 3.1 million iPhones in 2009's first quarter, down 28% from 2008's fourth quarter, and it sold 50% fewer iPods quarter to quarter.

The recession has clearly caught up with Apple. Even if the company reports revenues close Marshall's projection of $8.3 billion -- which Marshall himself acknowledged was higher than the consensus on Wall Street -- it would be down 19% from the $10.2 billion record Apple earned last quarter.

The downturn in Mac sales won't stop anytime soon: Marshall projects that Apple will see a 12% decline in computer sales in the quarter ending June 30.

But he is optimistic that the worst is already behind Apple, if not the Mac. "There's a lot of possibility to drive the shares higher," he said, ticking off the things he's factored into his future projections.

"The first significant event will be [Apple] announcing the iPhone for China," Marshall said. "That may take place as early as May 17, when China Unicom will turn on its 3G [network]." In March, Web sites and bloggers reported that China Unicom, which boasts more than 150 million subscribers, had confirmed that it would start selling the iPhone next month.



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