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iPhone, iPad poised to dominate much of Apple business

updated 01:40 pm EDT, Thu June 24, 2010

Mac likely to be dwarfed by iPhone sales


The Mac and iPod will likely continue to decline in importance for Apple, says Bullish Cross' Andy Zaky. The writer/analyst notes that the iPhone has been Apple's main source of revenue for about three quarters so far, while the Mac has been falling in relative importance even as its revenue grows. By the end of Apple's 2010 fiscal year in September, the iPhone is expected to account for 37.4 percent of revenue. The amount might have been 40.8 percent, says Zaky, if Apple had not introduced the iPad in April.

The iPad is in fact selling so rapidly -- having cracked over 3 million units -- that the iPod, which has been shrinking in importance since 2007, is on the verge of becoming just Apple's fourth-largest business. The device is often credited for helping Apple grow to its current state, but it's thought to have "almost turned into a mere accessory" considering the features of the iPhone. Even the iPod touch only duplicates some the iPhone's abilities, though the device may catch up after a September refresh.

Some have worried that Apple is beginning to treat the Mac as secondary, particularly as WWDC 2010 saw the company exclude Mac apps from its Design Awards, and even eliminate an IT track from labs and sessions. CEO Steve Jobs has insisted there was "no hidden meaning" in the event, and that the Mac could resume its place next year. At the same time, he has also claimed the tech industry is in "the mobile era," having shifted away from traditional computers.







by MacNN Staff

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iPod, iPhone, Investor, computers, Apple, iPad

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  1. Eldernorm

    Fresh-Faced Recruit

    Joined: Sep 2007

    +1
    06/24, 02:30pm | report spam | Reply |

    Really...... but

    If people love Apple products so much,,,,, just what computer do you think they will want to sync and control their Apple products on........ just one guess....

    Macs. And I would not be surprised to see Mac sales keep rising.

    Just a thought,
    en

  1. Paul Huang

    Dedicated MacNNer

    Joined: Sep 1999

    +4
    06/24, 02:40pm | report spam | Reply |

    OSX built the foundation for them, now...

    For the past decade, OS X built the foundation for the iPod, iPhone, and iPad. Now the portable devices are building the foundation for the next decade.

    Lower percentage does not mean lower importance. The mac is still under 10% share of sales (not user base, I am sure, because there are too many PCs in the landfills), but it is vital to the ecosystem, because it is the R&D for many PCs.

  1. Xinnix

    Fresh-Faced Recruit

    Joined: Nov 2003

    +4
    06/24, 02:41pm | report spam | Reply |

    Ridiculous!

    Why are these so called "Analysts" always trying to paint the picture of death for the Mac?

    Every time I read something like this it gets under my skin! Not only is the Mac business growing, Apples core products all interface with it only making it the center, and not something on the edge!. Not to mention the shift in a lot of business to go with Macs. The myth of Macs not doing well in the corporate environment is a joke! I'd bet Microsoft isn't laughing!

    As long as Steve Jobs is alive I don't see the Mac taking a back seat to anything they do.

  1. hayesk

    Professional Poster

    Joined: Sep 1999

    +5
    06/24, 02:49pm | report spam | Reply |

    Perspective

    People need to understand that there's always going to be a need for computers, even if that need becomes diminished over time. The average user certainly can get by with an iPad as their main machine for 90%, but what happens when it comes time to save photos from your 8MP digital camera, or all of your iTunes, movies, etc.

    You need a home base to store your data, and many people need to work with data much larger than is suitable for mobile device.

    So is the Mac going to play a diminished role in the future? Yes, compared to mobile devices. But is it going to play a diminished role compared to what it can do today? Absolutely not.

  1. Jonathan-Tanya

    Fresh-Faced Recruit

    Joined: Oct 2004

    +2
    06/24, 03:12pm | report spam | Reply |

    hard to argue with success

    Apples got what $3 billion in quarterly profits? They are the largest techology company on the stock market, period.

    So its hard to say, but you could have been even larger, and even more profitable.

    Although, I salute you for trying, sir!

    Anyway, I think they could sell more Mac's myself - Steve is focused on other things, admit it, its not possible for a single person to be exclusively focused on everything at once - just admit Mac is not as important to Steve Jobs in terms of attention he can spend on it it, because his attention most certainly is divided with other things, including the iPhone.

    But - hire some person, trust that person to do the right thing, and - Apple as a corporation should be able to grow Mac sales up to 10% even 20%... but that will take competing in the market, which right now, they are ultra-reluctant to drop prices and become a commodity pc maker. Some of the reasons are valid, most of them are not.

    I mean think of it this way, at one time Apple developed, in partnership with IBM and Moto, its own CPU's...nowadays they just use the same cpu's as everyone else, bog standard Intel CPU's. That hasn't hurt quality, or Apple's brand, or 'owning the whole stack' or any of that - apple could embark on a strategy to lower costs - end the 'apple tax' and watch its marketshare grow.

    Why? I don't know, for the Mac halo effect - mac users are more likely to buy iPhones....yeah,I turned that around....we all know I just want a low cost tower and will say anything, but the fact is...a larger mac marketshare is only going to help Apple's clout, and could add to the bottom line too.

    They still have a war going on here with Google's Android, why leave any weapon in reserve...thats all I'm saying.


  1. WiseWeasel

    Fresh-Faced Recruit

    Joined: Apr 1999

    +3
    06/24, 04:00pm | report spam | Reply |

    Wow

    If you combine iPhones, iPad and I'm guessing about 50-75% of the iPod revenue (for the iPod Touch's share of that segment), let's say two-thirds, we get about 56% of Apple's total revenue coming from devices running the iPhone OS in Q3 2010, and rapidly rising.

    http://bullcross.blogspot.com/2010/06/apples-q3-2010-earnings-shaping-up-to.html

    In the last three years, Apple has gone from zero to over half their business coming from this new platform. Not too shabby, as far as new platform roll-outs go.

  1. kgretton

    Fresh-Faced Recruit

    Joined: Jun 2005

    +2
    06/24, 04:05pm | report spam | Reply |

    This ignores the growth in revenue...

    If you compare their results from January 2007 - $7.1b in revenue and $1b in profit (almost double the profit from the previous year).

    With January 2010 - $15.7b in revenue and $3.38b in profit.

    The Mac was ~35% of the revenues @ $7.1b = $2.5n in January 2007.

    In January 2010 its still about 30% of the revenues and therefore close to $5b or double.

    Based on this forecast, it could drop to 25% of their revenues in January 2011 but what will they be? $21b?

    So the Mac story has been a massive success over the decade and, going forward, Apple have done exactly what they said they would do and that is to steal their own iPod market share with profitable iPhone and iPod touch market share.

    Expect to see Mac sales growing more slowly but being more than compensated for by the massive growth in an entirely new sector - the iPad.

    Steve has the future and that future is mobile. No one is better positioned to exploit that than Apple and I think that they sent a very clear message to developers this year at WWDC - if you want to grow, invest in development for our mobile iOS devices even if you are currently a Mac or Windows developer.

  1. eldarkus

    Fresh-Faced Recruit

    Joined: Feb 2004

    0
    06/24, 04:06pm | report spam | Reply |

    graph

    The graph is complete b***s***. All it's doing is showing profits from each sector Apple has, which makes it looks like other sectors are cutting into the Mac business.

    From Q1 2009 to Q1 2010, Apple saw a 32.4% growth in computers. All this means is that Apple has a LOT more extra revenue. More revenue means you can have more resources for each sector. Always a good thing.

    All companies with multiple products dont abandon one money maker for another. I know the Prius is quite popular, but you dont see Toyota abandoning the Corolla or any of it's other great selling cars to focus more on the Prius.

    I hate analysts sometimes...

  1. gmsquires

    Fresh-Faced Recruit

    Joined: Jul 2009

    -1
    06/24, 05:14pm | report spam | Reply |

    multiplier effect

    I guess these "anal" ysts don't understand that of course the mobile devices will out sell the computers as far as numbers, but doesn't mean that they are supplanting or diminishing the need for the Mac. Like Duh. You have far more mobile units being sold due to multiple units per person or multiple members of a family buying them but all needing maybe one computer. Or, at least fewer computers than mobile devices. This same thing happened with iPods. They multiplied like rabbits and boosted Apple's overall profits and started to exceed the amt contributed by the Macs only because they were being sold in greater numbers.

    Still need them Macs to connect your mobile device to unless using Windows box, but most people that use the Apple mobile device are getting a Mac due to the "halo" effect and ease of use.

  1. testudo

    Fresh-Faced Recruit

    Joined: Aug 2001

    +2
    06/24, 05:20pm | report spam | (1 reply) Reply |

    Re: hard to argue with success

    Apples got what $3 billion in quarterly profits? They are the largest techology company on the stock market, period.

    Well, MSFT had 4 billion last quarter. And 6 the quarter before that.

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