Apple's iMac on the road to irrelevance
The computer that saved company's bacon in '98 peaked a year ago
Computerworld - Sales of Apple's iMac, the computer often credited with saving the company, have peaked and by the end of 2014 will account for approximately 2% of the firm's revenues, analysts now predict.
The iMac, an all-in-one computer with roots in the original 1984 Macintosh, was introduced in 1998 as a gumdrop-shaped machine sporting a CRT (cathode ray tube) display. Its hallmarks were an AWOL floppy drive -- the first Mac to dump the then-standard component -- and translucent plastic cases that came in a bevy of eye-squinting colors. Six years later, Apple reshaped the machine to fit the logic board, drives and other components behind an LCD screen, a form it still retains.
Apple's return to computer industry significance is often traced to the original iMac, the first system introduced by then-interim CEO Steve Jobs after his return to the firm he had co-founded two decades earlier.
But even with that pedigree, the iMac has long been outpaced by Apple's laptops. In the last four quarters, for example, Apple's laptops outsold desktops by nearly three to one, with a similar revenue disparity.
Poor desktop sales were caused in part by the long stretch between product refreshes: Apple revamped the line in May 2011, then waited until late October 2012 to release the next update, an interval 72% longer than average. But the iMac immediately stumbled, as the new models did not go on sale until Nov. 30 because of supply issues.
Those supply issues will have a dramatic impact on iMac sales this quarter and next, according to a pair of Wall Street analysts who model future quarters.
Brian White, of Topeka Capital Markets, for instance, forecasts that desktop sales this quarter will be just over one million machines, or 31% fewer than during the same quarter last year. Nearly all of Apple's desktop sales are iMacs; the other two desktop lines, the Mac Mini and Mac Pro, sell in comparatively tiny volumes.
Meanwhile, Brian Marshall, of ISI, predicted equally bad news, saying that desktop sales will be down 29% this quarter.
Clearly, the lack of available iMacs in the fourth quarter, traditionally the best for desktop sales, has eliminated the usual "pop" from the holidays and a recent refresh.
And things are not going to get better.
White's estimates for 2013 peg desktop sales at under a million for two of the coming year's four quarters, down 20% and 2% for the first and second quarters, respectively. For fiscal year 2013, which runs from Oct 1., 2012, to Sept. 30, 2013, White figures that Apple's desktop sales will be 14% lower than in the previous year.
Marshall's take is the same: In the first quarter of 2013, desktop sales will be down 20%, and sales during the calendar year will be off 14%.
By the end of 2013, each analyst estimates, Apple's laptops will outsell its desktops by four to one.
Naturally, revenue follows. Desktops will contribute just 2.5% of Apple's total this quarter, 2.7% in the 2013 fiscal year, and 2.4% the year after that, according to White. That's down significantly from 2010, when desktops accounted for 9.5% of all Apple revenue, and even off fiscal 2012, when sales were 3.9% of total revenue.
Charting White's and Marshall's estimates show that after the fourth-quarter 2011 peak of 1.5 million, Apple's desktop line-up will essentially flatten at an average of under one million per quarter for the next two years.
Meanwhile, Apple notebook sales are forecast to increase by 11% this quarter, and post double-digit gains in 2013 and 2014. In other words, sans MacBooks, Apple would essentially be out of the computer business.
- Apple has bigger plans than just song ID with Shazam deal
- Mac Pro shortage sets record as worst Mac production debacle
- Apple slates WWDC for June 2-6, sets up ticket lottery
- Apple patches Safari's Pwn2Own vulnerability, two-dozen other critical bugs
- Microsoft's free OneNote vaults to top of Mac App Store chart
- Apple discounts iPhone 5C 8%-9% in five markets via storage cuts
- Apple hands stock worth $12.1M to top execs in retention deal
- Hands on: Apple's Mac Pro is the fastest Mac ever
- Apple CFO to retire in September after he cashes in $53M stock award
- Apple's CarPlay to spark mobile apps war in your car
- Path Selection Infographic Path Selection Infographic
- Hyperconvergence Infographic A wide range of observers agree that data centers are now entering an era of "hyperconvergence" that will raise network traffic levels faster...
- Preparing Your Infrastructure for the Hyperconvergence Era From cloud computing and virtualization to mobility and unified communications, an array of innovative technologies is transforming today's data centers.
- How WAN Optimization Helps Enterprises Reduce Costs If you wanted to break down innovation into a tidy equation, it might go something like this: Technology + Connectivity = Productivity. Productivity...
- Cloud Knowledge Vault Learn how your organization can benefit from the scalability, flexibility, and performance that the cloud offers through the short videos and other resources...
- LIVE EVENT: 5/7, The End of Data Protection As We Know It. Introducing a Next Generation Data Protection Architecture. Traditional backup is going away, but where does this leave end-users? All Macintosh White Papers | Webcasts
Our new weekly Consumerization of IT newsletter covers a wide range of trends including BYOD, smartphones, tablets, MDM, cloud, social and what it all means for IT. Subscribe now and stay up to date!