Consumer Electronics

Apple's New Problem

It seems Apple has not had a major problem for years. Its earnings have gone up with machinelike precision. It has over $150 billion in cash and a market cap of well over $2.5 trillion, making it the most valuable company in the world. Yet, it stumbled recently as sales of the Mac took a hit while most of its competition’s sales improved. (These companies control over half their industries.)

According to International Data Corp.’s Worldwide Quarterly Personal Computing Device Tracker, Apple’s market share fell in the year’s first quarter. The industry, in general, had a problem: “Global shipments numbered 56.9 million, marking a contraction of 29.0% compared to the same quarter in 2022.” The slowing economy was to blame, according to IDC experts. The hope was that as current computers age, there will be a rebound in sales in 2024.

Apple’s market share in the first quarter was 7.2%, down from 8.6% in the same quarter a year ago. Unit sales were 4.1 million, a decline of 41% over the same period.

While all the largest personal computer companies had declining sales, Apple’s percentage was by far the worst. Industry leader Lenovo had a 30.3% drop to 12.7 million units. The second-place company, HP, saw sales fall 25% to 12.0 million.

The reasons for Apple’s performance are hard to gauge. One might be that Macs tend to be more expensive than most PCs. In a tough economy, people may be unwilling to pay the extra money.

Fortunately for Apple, Mac sales are not critical to its financial success. iPhone sales remain the driver. In the most recent quarter, Apple had revenue of $117 billion. Mac revenue was slightly less than $8 billion of that.

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