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Apple beats recession, sells more Macs, touts 'value'

Drops prices, sells more; again scorns netbooks

By Gregg Keizer
July 21, 2009 07:27 PM ET

Computerworld - As some analysts predicted, Apple today announced that Mac sales climbed last quarter, just three months after it was forced to report the first drop-off in six years.

Company-wide revenues jumped 12% for the quarter compared with the same period in 2008, based not only on better Mac sales, but soaring sales of both the iPod Touch and the iPhone. Sales of the former, for instance, were up 130% year-over-year for the quarter, while iPhone sales leaped 626%.

"Everything for Apple did better than people had feared," said Ezra Gottheil, an analyst with Technology Business Research. "But I don't know how much of this is Apple's doing. The real change, I think, is more of consumer confidence. Apple's [poor] quarter last time was a function of how scared people were. Now, they're thinking, 'It may be a long slog, but we've hit bottom.'"

Apple sold 2.6 million Macs during the just-concluded quarter, a 4% increase over the 2.5 million it sold in the year-ago quarter. "We had outstanding sales," Peter Oppenheimer, Apple's chief financial officer, said during a conference call with Wall Street analysts. "This was a new June quarter record, nearly meeting the all-time record in September 2008." Apple sold 2.61 million machines in 2008's third calendar quarter.

Revenues from Mac sales, however, were down 8%, from $3.6 million last year to $3.3 million this year. That was, said Apple, the result of lower prices for its portable line, and a shift within its notebook models to the lower-priced MacBook Pros.

But they professed they were "thrilled" to sell more Macs this year than last, during an economic downturn where overall computer sales, according to research firms such as IDC, are currently off by about 3%. Not surprisingly, Apple sold more than double the number of laptops (1.75 million) than desktops (849,000). Laptop sales were up 13% year-over-year, but desktop sales -- as they have trended for some time -- declined 10%.

To emphasize that Mac sales live or die by its laptop sales, both Oppenheimer and Tim Cook, the company's chief operating officer, celebrated the June refresh of the MacBook Pro line, when Apple also cut prices between 6% and 28%. "After the transition [to the new models], in our non-education business, people were upselling from the $999 [MacBook] to the $1,199 [MacBook Pro]," said Cook. "For $200, it's a significant amount of features."

Some models -- particularly the $1,199 13-in. MacBook Pro and the $1,699 15-in. MacBook Pro -- are in short supply at the moment, confirmed Cook. Both show a seven-day delay in shipping on Apple's own online store. "There are a couple of models constrained today, but we will get beyond [that] in the next two weeks," promised Cook.



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