The Mac Is Roaring Back While the PC Gets Weaker

Last quarter, there was no sugarcoating it: Apple's (NASDAQ: AAPL  ) Mac shipments were surprisingly weak. Mac units came in well below anyone's best guesses, and the shortfall was primarily related to the redesigned iMacs that were being faced with supply constraints related to full display lamination. Even as the broader PC market has been rather weak lately, the Mac dramatically underperformed the overall market.

This quarter, things might be about to change, as the Mac is roaring back while the PC gets even weaker.

The Mac is back
According to estimates from market researcher NPD last month, Apple's domestic Mac shipments soared by an impressive 31% year-over-year in January alone. Now NPD is pegging the Mac maker's U.S. unit shipments as growing 14% year-over-year throughout the first two months of the year. Piper Jaffray analyst Gene Munster is sharing the data alongside a recent research note, noting that the comeback is thanks to easing iMac constraints.

The figures only relate to U.S. shipments. Prior to the recent reporting changes, Apple used to disclose Mac units shipped to each geographical region, with Americas and retail comprising the bulk of unit sales.

Source: SEC filings. Calendar quarters shown.

Munster is modeling for an overall 5% drop in Mac sales during the March quarter. That may not initially strike investors are "roaring back," but remember that Apple posted an underwhelming 22% decline last quarter, breaking its multi-year streak of outperforming the PC market, so a negative 5% would be quite an improvement sequentially. The analyst's estimate puts Mac units in the neighborhood of 3.8 million this quarter, following an expected seasonal decline coming off the holidays.

It's also worth mentioning that a negative 5% result this quarter would allow Apple to return to its PC-market-beating ways, since new data shows the broader PC market performing even worse than initial expectations.

The PC is slacking
IDC now believes first quarter PC shipments in China are going extremely slow, in part due to government budget cuts and anti-corruption measures that are putting a drag on sales. China represented 21% of global PC shipments last year, so any softness in that region will weight on the broader market.

The transition to Microsoft (NASDAQ: MSFT  ) Windows 8 has been tough on OEMs and suppliers (and Microsoft, too), and that isn't expected to ease up any time soon. IDC predicts first quarter PC units to fall by 7.7%, with any possible surprises more likely on the downside than the upside, according to its supply chain data. The drop could even touch double-digit territory in Q1, with a mid-single-digit fall next quarter. The only way that the PC market will rebound during the latter half of the year is if new designs are introduced at competitive pricing relative to tablets.

A mixed opinion
The PC pessimism echoes sentiment from Nomura Equity analyst Rick Sherlund. Last week, Sherlund said Windows 8 has been "awkward" so far and that the inherent compromises in the platform have hindered adoption. Over time, the situation should improve as Microsoft refines the operating system and OEMs deliver new form factors at competitive price points.

However, Sherlund does express optimism in the medium-term, predicting shipments to rebound in the second half of the year, which is why overall he still rates Microsoft a "buy" and has a $32 price target on the software giant.

Every little bit helps
Ultimately, Macs remain a small portion of Apple's overall business nowadays as mobile devices comprise the bulk of sales. We're talking about just 13% of trailing-12-month sales coming from Macs, compared to 72% for iPhones and iPads combined. But with fears that Apple may miss its own guidance in the current quarter, every little bit certainly helps.

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Read/Post Comments (6) | Recommend This Article (19)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 20, 2013, at 7:40 AM, jdmeck wrote:

    When it comes to laptops and desktops it's the best.

  • Report this Comment On March 20, 2013, at 10:57 AM, skitz2004 wrote:

    I don't think they take into account all of us that build our own PC. I do not like Mac and I wouldn't use one if it was given to me. It's no different than when Intel bribed companies to not use AMD products. The fact that so many schools push Mac makes it a little harder for the regular PC sales. I build my own and so do most of the people I know but the average person with little to no computer experience will buy whatever is popular. I worked for Foxconn at one time and learned quite fast that building your own means better quality and you get what you want out of your PC. As a gamer it's almost necessary and easy to do. As for Windows 8, I'll keep my Windows 7 since it provides what I need without the added junk I do not.

  • Report this Comment On March 21, 2013, at 10:29 AM, v1tanuova wrote:

    @skitz, I'm glad you have time to make your own PC. I don't think that applies to the majority of people who need computers for work. I want something I can enjoy using and that enhances my productivity since I have it in my hands all day long. I don't have time or skills to make such a thing myself. Macs are a superior off-the-shelf product and were it not for the investment many companies have already sunk into PCs over the last 20 years, more of us would have them. I actually like Windows 7 but If Windows 8 runs aground with this confusing new interface, more people may just consider switching to OSX.

  • Report this Comment On March 23, 2013, at 12:48 AM, MCCrockett wrote:

    Some of us got tired of the system engineering that was needed to build a PC after doing it for 15 years.

    After discovering that Apple was using components very similar if not identical to ones that I would have selected, I bought a Mac Pro. One added feature was the BSD OS under the hood. I would have preferred BSD/OS but it was close enough.

    With virtualization I can continue to run the one Windows application that I use, Quicken.

  • Report this Comment On March 23, 2013, at 1:21 AM, NOTvuffett wrote:

    The Mac is roaring back? Forgive me if I have missed the news, but has AAPL exceeded 10% market penetration in PC's?

    As skitz2004 said, nowadays it is not very hard to build your own pc. Here is a link for a video from a hardware vendor for a series of instructional videos on the topic.

  • Report this Comment On March 23, 2013, at 1:23 AM, NOTvuffett wrote:
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