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Apple vs. the PC Industry

Robert McMillan, writing for the WSJ Digits blog last week:

Worldwide PC shipments saw their sharpest decline in nearly two years in the second quarter of 2015, dealing continued damage to retailers and makers of computers, chips and PC software.

Shipments fell 9.5 percent, year on year, to 68.4 million units, according to the research firm Gartner. Rival researcher IDC, which doesn’t include tablets in its tally, tracked an 11.8 percent drop, year on year, to 66.1 million shipments during the quarter. Both firms released PC sales reports on Wednesday.

To put Apple’s current industry position in perspective, the company probably sold somewhere between 60-65 million iOS devices last quarter. (I’m guessing ~50 million iPhones, ~10-12 million iPads, and a handful of million iPod Touches.) The average selling price of a PC has fallen to under $400. The average selling price of an iPhone has been estimated to be as high as $660. So while iOS devices, taken as a whole, might still fall a few million units short of the PC industry, they’re clearly generating more in revenue. More importantly, the PC industry operates on razor-thin margins; iOS devices sell with remarkably high margins. And, if that’s not enough, the “PC industry” includes the Mac, which appears to continue to be holding its own in the face of this overall slide in demand — IDC is forecasting a 16 percent increase in Mac sales globally for the quarter.

So, in short: Apple is the only “PC” maker stemming the tide against an overall decline in sales, and, with iOS, has created a new product line that is as large as (unit sales-wise) and far more profitable than the entire PC industry.

Also, they now make watches.

Friday, 17 July 2015