Here’s What Apple is Doing Wrong
If everything that Apple (NASDAQ:AAPL) touches turns to gold, why is the Mac still aluminum?
A report from Wednesday says that while Hewlett-Packard (NYSE:HPQ) was the top seller of PCs in the first quarter of the year, Apple, in second place, was just 40,000 units behind. With HP totaling 15.8 million shipments in the last quarter, Apple is obviously not too far back. The two have been in a fairly close race for PC domination for a few months now, and Apple had beaten its California neighbor at the end of the fourth quarter of 2011.
But those numbers come with an asterisk: those statistics count tablets as PCs.
Unsurprisingly then, if you break down Apple’s numbers, 11.8 million of those unit sales were iPads. Apple’s massively popular tablet saw a 151 percent increase in unit shipments in the first quarter over the same period in 2011. The Mac, in contrast, only saw a seven percent growth year-over-year.
More incredibly, it has taken Apple barely two years to sell as many iPads as the number of Macs it has sold over the last24 years, that is, 67 million.
However, the wild contrast in numbers does begin to start making sense when one looks at the growth of different segments of the PC market. Sales of notebooks and desktop PCs grew by 11 percent and 8 percent, respectively, from the first quarter of 2011. That growth is to be appreciated considering the laptop’s death has been foretold many times over the past couple of years. However, tablet sales grew by more than 200 percent, and that tells us clearly that when it comes to growth potential, we have a no-contest.
And Apple has been racing away in the tablet market as makers of Android-based tablets struggle to optimize their hardware best with Google’s (NASDAQ:GOOG) operating system. Amazon (NASDAQ:AMZN), which uses the Android software, has chosen to create a separate identity for its Kindle Fire tablet through a breakaway app store and marketing based on utilizing Amazon.com’s digital content strength. It is also the clear winner in the Android tablet segment, making it amply clear that equipment manufacturers will have to break some rules to match up to the iPad’s head-start.
And it will be a race because the overall tablet market is expected to almost double by the end of 2012 to 118.8 million units. By the end of 2016, it is predicted to reach 369.3 million in annual sales, six times higher than in 2011. Gartner also predicts that Apple will corner 72.9 million of those units by the end of 2012, which is 60 percent of the market.
While Apple’s recent embracing of the enterprise segment may help it make more of a move in the PC segment, it has obviously tried to make its priority the product that, it thinks, will take it safely into the coming years. The tablet is here to stay, and Apple knows it, which is maybe why the tech giant has done little to update its PC line in recent years. Of course, rumor has it that all may change this summer with Intel’s (NASDAQ:INTC) new Ivy Bridge chips set to hit markets. If Apple doesn’t leap at the chance to build a new laptop around the much-hyped chips, it will certainly be falling short of expectations.