Mac December sales flat, says NPD

'Apple is clearly having some issues,' says analyst

Mac retail sales in the U.S. were essentially flat last month compared to the same month year earlier, more evidence that Apple Inc.'s systems are priced too high for the current economic climate, research company NPD Group Inc. said today.

Although Apple's laptop sales were up 20% in December 2008 compared to the same period in 2007, desktop sales were down 36% year to year, resulting in a total gain of just 0.3%, said NPD analyst Stephen Baker. In November, Apple sold approximately 1% fewer Macs than it did the same month the year before.

"They didn't blow things out in December like they have in the past," said Baker. "Apple is clearly having some issues, like everyone else," he said, referring to the recession and generally gloomy economic outlook.

Sales of Windows-based notebooks grew by 23% year to year, Baker added, with two-thirds of that growth coming from sales of machines in the relatively new netbook category, a class of laptops usually defined by small size, light weight and low price.

That Apple lacks an entry in the netbook market hurt sales, said Baker. "It certainly is looking like [the price drop to] $999 wasn't enough, and that they may have to come down to something like $799."

In October, when Apple launched its new all-aluminum "unibody" MacBook and MacBook Pro laptops, it also lowered the price of the older plastic-cased MacBook by $100, to $999, although some analysts had expected more aggressive cuts, perhaps to as low as $800.

Apple's laptop sales look better when Windows netbooks are taken out of the equation, Baker acknowledged. "From an overall perspective, if you [separate] those netbooks out, Apple actually outgrew what you might call the 'standard' notebook market," he said.

According to NPD, which collects sales data from both brick-and-mortar retailers as well as some of the larger online stores, such as, netbooks accounted for about 10% of all sales of laptops running Windows during December. That's more than double the category's share of sales in November 2008.

An examination of the average sales prices (ASP) of Windows and Mac notebooks shows evidence of the shift toward netbooks -- as well as the dramatic discounts in Windows machines to boost sales during the holidays. In December, the ASP for laptops running Windows was $596, Baker said, but for Macs it was $1,485 -- nearly two and a half times more.

"A lot of us, and I was one, thought that Apple would be able to weather the [economic] storm a lot better than others," Baker said. "They only weathered it a little bit better."

Of particular concern, said Baker, were the continued weak sales of Apple's desktop computers. "Apple's underperforming in desktops, and they need to do something in both product and pricing for the iMac," said Baker. "There's no question about that."

Other analysts have predicted that Apple's sales in the last three months of 2008 were respectable but not spectacular. Gartner Inc.'s Mikako Kitagawa, for example, said last week that Apple's U.S. sales in the last quarter were up 8% year to year, a number dramatically lower than the growth rates the company had posted earlier in the year.

Apple will report its fiscal first quarter earnings on Wednesday after the stock market closes, when it will reveal Mac unit sales and revenues.

Copyright © 2009 IDG Communications, Inc.

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