Apple CEO defends Mac line; analysts foresee iPad hybrids

Sales down for second quarter in a row, but Apple can 'redefine' personal computer, experts argue

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"An iPad Mini in the enterprise could be seen, like other smaller tablets, as a companion to an ultrabook," she said. "It will be interesting to see how Apple deals with the MacBook Air then."

But like Moorhead, she said there's a possibility Apple will react to the PC business changes with a hybrid device. "In the enterprise, the power of having something that works, say, 80% of the time as a notebook, is powerful," Milanesi said. If Apple does take the hybrid/convertible approach with the MacBook Air, the iPad Mini, as small as it is, would nicely serve as a companion, even though the Air would be, as she said, "a tablet when you wanted it to be."

Others saw another Mac strategy for Apple.

"It's not that PCs are dying, that's silly," said Gottheil. "The PC is maturing, though, and the transition from adolescence to adulthood will be difficult. But the Mac is an anchor for them. It's important to Apple, and it's clearly profitable."

Mac sales in the first quarter generated $5.45 billion in revenue, up 7% over the prior year. Gottheil credited the revenue increase to a shift to more expensive models, most likely the 13-in. MacBook Pro with its Retina-quality display: The ASP, or "average selling price," of the Mac climbed to $1,378 from $1,359 in the previous quarter, and was $74 higher than a year earlier.

Riffing on the idea that consumers, but also businesses, are keeping their personal computers for longer periods -- spending the money for replacement machines on tablets instead -- Gottheil argued that Apple is better positioned to benefit from the trend than most Windows OEMs.

"That may be an opportunity, the pony in the manure heap," said Gottheil. "If consumers know they're going to keep their computers longer, they may be more tolerant of the Mac's higher entry prices."

He compared that thinking to what drives many consumers to buy higher-priced automobiles, thinking that a more reliable car, one with extra features, makes economic sense if they intend to hold onto it for nearer a decade than not.

"If I'm going to keep my computer for five years, six years, seven years, I'm going to get a Mac," Gottheil said of a hypothetical consumer's reasoning.

The Mac also plays a part in Apple's larger strategy, Cook said in his defense of the line, citing the familiar "halo" effect.

"We believe that if anything the huge growth in tablets may wind up benefiting the Mac, because it pushes people to think about the product they're buying in a different manner," said Cook Tuesday. "People may be even more willing to buy a Mac, where today they may be buying a PC."

Gottheil agreed. "The Mac remains a good, solid business, and it contributes to their other businesses," he said.

Apple also sold 19.5 million iPads in the first quarter, a 65% year-over-year increase.

When iPad and Mac unit sales are combined -- an approach many analysts are advocating because tablets have assumed some of the tasks once relegated to personal computers -- Apple posted year-over-year sales of 23.4 million units, a jump of 48% compared to 2012.

If iPads were considered equivalent to PCs, Apple's 23.4 million combined sales last quarter would have pushed the company into the top spot worldwide, with sales twice those of either Hewlett-Packard or Lenovo, the No. 1 and No. 2 OEMs in Gartner's and IDC's rankings.

HP shipped few tablets last quarter; Lenovo claimed it sold approximately 800,000 tablets in the fourth quarter of 2012, its most recently-reported period.

Mac sales chart
The Mac accounted for 13% of Apple's total revenue of $43.6 billion in the quarter ending March 30, up a few points from the previous period. (Data: Apple.)

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

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