Apple Q2 Decline Delivers Market Share

It's the same old story, quarter after quarter. Well, Apple is stronger than ever. PCs? They're the market segment that's tanking.

It’s the same old story, quarter after quarter. Well, Apple is stronger than ever. PCs? They’re the market segment that’s tanking.

Macs, iPads and iPhones gains share and profits as PCs Android falter

After the latest earnings season report on the iMaker’s performance, pundits celebrated the Apple Q2 decline while conveniently ignoring all the upside news that Apple reported. Even though sales declined in the year to year comparison, Apple’s results produced the ninth highest profit in the company’s history. Only companies in the energy sector have produced greater than $10.5 Billion in quarterly profits. Heck, one would be hard pressed to name ten companies that produce $10.5 Billion in profit during an entire Fiscal year.

None of that seems to matter in the Apple hating punditry class. These so called expects can only denigrate Apple’s results, not in relationship to the results of the iMaker’s key competitors, but to Apple itself. Hey, no one ever promised Apple a Rose Garden. Even still, the Cupertino powerhouse ought to be evaluated fairly. Who am I kidding? Apple will never be evaluated fairly when the agenda says, “Regardless of what Apple earns, the story must follow the ‘Apple is Doomed’ narrative.”

Daniel Eran Dilger has written another excellent article looking at this very issue. There is no other observer of Apple and its various businesses more capable of cutting through all the B.S. than Dilger. Here is a taste of his take on the issue.

Apple’s computing revenues grew by 6x over the last decade

“Not only has Apple increased its Mac sales dramatically over the past decade, but it has also cultivated a new Post-PC replacement for PCs that has grown to be equally as large over the past six years (iPad and Mac both generated over $11 billion over the last six months).

While iPads differ in some respects from conventional PCs, they are direct competitors for an increasing number of important markets ranging from education to the enterprise. It’s obvious that iPads are indeed eating up former PC sales, and the latest iPad Pro models are only going to accelerate that trend.

Not only have Mac revenues grown by a factor of three over the last decade, but iPad sales have grown up in parallel, meaning that the non-phone computing devices that Apple sells (iPads and Macs) have grown over the past decade by a factor of nearly six: $1.7 billion worth in Q2 2006 to $9.5 billion in the most recent Q2.”

… while PC revenues have collapsed

“And that’s Apple’s computer-based revenues, not unit shipments. PC shipments are up just 1.2 times over the past decade, but PC ASPs have a collapsed in half over the last ten years, meaning those 1.2x shipments have actually generated revenues that are only 60 percent as much as they contributed a decade ago.

That means Apple’s “computing device” revenues have grown by an order of magnitude greater than the rate of all other PC makers combined: 6x vs 0.6x. It also highlights the fallacy of focusing on unit sales rather than profits, because unit sales that don’t generate profits are just busywork. Ask Nokia, HP or Samsung.”

Read the full analysis by Dilger here. It’s one of the best explanations yet as to why Wall Street and the pundits always get it wrong when it comes to Apple. Doomed? Not by a long shot.

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