Apple Mac sales shine while PC industry slumps

By Jonny Evans

Apple [AAPL] has crossed another milestone, grabbing over 7 percent of Western Europe's PC industry while its iPad continues to assimilate the netbook market, the latest Gartner market share figures show.

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Apple's star continues its rise

I've said before that Apple's iPad has helped destroy the market for netbooks. This is confirmed by Gartner's latest Western European data, which show a 40 percent decrease in mini notebook shipments in the third quarter of 2011. Apple meanwhile reached 7.6 percent PC marketshare in Western Europe.

Weekend reports have warned that Apple's phenomenal Christmas iPhone 4S sales might not be so amazing, citing claims of component order reductions across Apple's Asia-Pacific supply chains. If this is true then everyone in the PC industry should be very afraid -- if Apple is experiencing reduced demand, then so too must they be...

"PC shipments in Western Europe totaled 14.8 million units in the third quarter of 2011, a 11.4 percent decline from the same period last year," Gartner claims.

[ABOVE: Interesting viewing: a selection of Apple luminaries talk about Apple and Steve Jobs.]

Education sales slump

"The results in the third quarter of 2011 make unpleasant reading for the PC industry, as the third quarter is traditionally a strong consumer quarter, driven by back-to-school sales," warned Meike Escherich, principal analyst at Gartner.

That's not entirely unexpected. Cash-strapped parents have no choice but to cut back on spending, and it would be easy to perceive a child's computer as a luxury, or replace such devices with a tablet.

There was a time parents may have considered a netbook as a replacement. That's in the past. The mobile segment saw a 12.6 percent decline in Q4: "Driven by more than a 40 percent decrease in mini notebook shipments in the third quarter of 2011."

Across the industry, desktop sales declined 8.7 percent.

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Apple is a cannibal, PC sales its prize

With its MacBooks and the iPad, Apple presently dominates the mobile space. While the industry experienced an 11.4 percent decline, with Acer sales tanking due to that firm's exposure to fluctuations in netbook demand, Apple's share grew by 19.6 percent.

"I believe a materially larger number of people are electing to buy an iPad instead of a Windows-based PC," said Apple CEO, Tim Cook, during Apple's most recent financial call.

"And so I think we are overwhelmingly coming out very, very well in that cannibalization....with cannibalization like this, I hope it continues," he said.

ABI Research claims iPads make up 68 percent of the tablet market, so any move to tablets is essentially a move that favors Apple.

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iPad leads the pack

Paul Hunter, vice president of HP's Personal Systems Group in the UK, told the Guardian last week: "Some of that is a move to tablets, and some is that the price difference between netbooks and [larger-screen] notebooks doesn't exist," he said.

"People were using netbooks as a secondary device; now they're either buying notebooks with SSDs [solid state disks] or tablets."

While analysts cite consumer confidence in the face of the deepest recession to hit Europe for near 100 years, they have so far failed to comprehend why Apple's markets are expanding while the industry is not.

Competition 101

Even before you look to software, design and the rich feature set of Apple's devices, potential drivers that favor future growth for Apple could include:

  • Slower-than-anticipated adoption of Windows 7, further evidence of Microsoft's fall from grace.
  • The move to favor non-PC devices such as the iPad for many tasks in both consumer and enterprise markets.
  • 65 percent of tablet owners prefer their iPad to their notebook, a recent UM survey claims.
  • Apple's continued move to offer best-in-class devices at competitive prices.
  • Apple's recognition that it is not enough to simply offer devices, but also important to deliver entire ecosystem within which to place these devices.
  • The continued success of Apple's retail store strategy.
  • Apple's continued drive into China.
  • That Apple's combined product matrix drive interest in other devices from the same manufacturer.

Despite Intel's encouragements, competing manufacturers continue to fail to match Apple's existing MacBook Air on price or performance.

This means Cupertino is in prime position to maintain its accumulation of market share, as most consumers are already aware of and have faith in Apple's brand. When competing devices cost around the same or more as Apple's offering, consumers will favor Apple.

Today's Apple is scant inches away from establishing the kind of broad consumer market understanding that it is no longer a premium player offering expensive devices for the rich and the well-heeled: it now offers the world's most sophisticated, integrated devices at prices the competition seem unable to match.

This is why Apple's market share is growing in the toughest imaginable environment, and why so many of its competitors are suffering so badly.

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Copyright © 2011 IDG Communications, Inc.

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