Apple: iPad Cannibalizes Sales of Macintosh PCs

Some Users Prefer Tablets to Personal Computers

by Anton Shilov
07/19/2011 | 10:27 PM

The popularity of tablets in general and Apple iPad in particular clearly affects market of personal computers. Previously it was believed that slates cannibalize sales of netbooks, but Apple now claims that sales of iPad affect sales of Macintosh personal computers.

 

"We do believe that some customers chose to purchase an iPad instead of the new Mac during the quarter, but we also believe that even more customers chose to purchase an iPad over Windows PC. As I have said before, there is a lot more of the Windows PC business to cannibalize than the Mac. Also, we believe that the Mac has many other attributes that would make it continue to do well in the market," said Timothy Cook, chief operating officer of Apple, during the quarterly conference call with financial analysts.

Apple sold 9.25 million iPads during the quarter, a 183% unit increase over the year-ago quarter. The company also sold 3.95 million Macs during the quarter, a 14% unit increase over the year-ago quarter, which means that the iPad is clearly a significantly more successful product line for Apple. Besides, the firm sold 20.34 million iPhones in the quarter, representing 142% unit growth over the year-ago quarter.

It should be noted that sales of the iPad are constrained by manufacturing capacities of Apple's partners, the company claims.

"This quarter we were still selling every unit we could make and that was the situation as we ended the quarter. As we stepped into July over the initial weeks to give you a more current update, we had been able to increase the supply further. Some SKUs and some countries are at a supply-demand balance, but we are still working very hard on the balance of the world," said Mr. Cook.

One should keep in mind that there are still no strong rivals for Apple iPad on the market mostly because Google Android platform is not as mature as Apple's iOS. It remains to be seen what happens to sales of iPad - as well as sales of inexpensive PCs based on Mac OS or Microsoft Windows - when powerful Android-based tablets reach the market.

Apple posted record quarterly revenue of $28.57 billion and record quarterly net profit of $7.31 billion, or $7.79 per diluted share, for its fiscal 2011 third quarter ended June 25, 2011. These results compare to revenue of $15.70 billion and net quarterly profit of $3.25 billion, or $3.51 per diluted share, in the year-ago quarter. Gross margin was 41.7% compared to 39.1% in the year-ago quarter. International sales accounted for 62% of the quarter’s revenue.