Record Mac Shipments In Q2/14 Confound Analyst Projections

A Seeking Alpha Trefis commentary notes that Apple’s fiscal Q3 2014 results released July 22, beat market predictions on earnings, although revenues were slightly lower than anticipated.

Apple’s Mac’s enjoyed especially strong sales over the last quarter, shipments growing by roughly 18% year-over-year to about 4.4 million units, which was particularly impressive given general shrinkage of the PC market overall.

iPhone sales also remained robust, with about 12.7 percent growth in the quarter year-over-year, although iPad sales did not, logging another YOY decline of about 9 percent attributed to weaker demand in mature tablet markets such as the U.S., which offset some double-digit percentage growth recorded in markets such as China, the Middle East and India. Additionally, Trefis cites Apple’s move to reduce iPad channel inventory by around 500,000 units from Q2 2014 levels as also contributing to the shipments decline. While the overall growth in the tablet market has been slowing, with IDC forecasting that tablet shipments for the year will rise by only 12.1 percent compared 51.8 percent growth during 2013, with Apple evidently suffering worse because of its higher price points and exposure in developed markets where tablet penetration is high, making Apple’s iOS business software partnership with IBM plus IBM selling Apple devices to enterprises loom even larger in importance.

As for the Mac’s sales surge, Trefis cites Apple noting that Macs have gained global market share for 32 out of the last 33 quarters, and notes that the strong Q2 2014 results were primarily driven by Macbook Air sales and the education buying season in the U.S. And in China particularly where they grew by some 39 percent compared to the broader Chinese PC market which was estimated to have shrunk by about five percent during the period.

In a thoroughgoing editorial, Appleinsider’s Daniel Eran Dilger observes that “strong double digit growth” in U.S. Mac sales radically contradicts preliminary estimates published earlier this month by market metrics firms IDC and Gartner that Apple’s domestic Mac sales fell year-over-year in the June quarter and calls into question legitimacy of market estimates that the tech media uncritically presents as factual.

Dilger notes that Apple CEO Tim Cook affirming during the company’s fiscal Q3 2014 earnings conference call that strong double digit Mac growth was recorded in many countries, including the U.S., Canada, Mexico, the UK, Germany, France, Australia, China, India and the Middle-East,”,and that Apple didn’t resort to “channel stuffing” to achieve record June Mac “shipments,” with Mac channel inventory ending the quarter slightly below Apple’s four to five week target range.

And while iPad sales did shrink in the U.S., the Mac sales surge more than made up the difference.

additionally, Dilger says IDC’s incorrect assessment of Apple’s double digit U.S. growth percentage as a year-over-year “decline” also calls into question its ranking Apple as fourth largest maker of conventional PCs in the domestic market, since the narrowest possible interpretation of Tim Cook’s “double digit” growth would essentially tie Apple with Lenovo in U.S. sales, according to IDC’s own figures.

He also observes that in calculating PC “market share” numbers, both IDC and Gartner include low end netbook and hybrid devices and Windows tablets, and IDC also counts Google Chromebook web browser devices, but both firms arbitrarily exclude sales of Apple’s iPad from their PC sales figures, while if they included iPads and other tablets in PC metrics, they would be forced to recognize Apple as being the largest computer maker by a wide margin, and that despite much media handwringing and crepe-hanging about Apple’s year-over-year shrinkage in iPad sales, it still sold 13.3 million iPads globally in the quarter — more than Samsung, Lenovo and Asus (the next three largest vendors, according to IDC) combined.

Another market research player, Canalys, does does report combined sales of PCs and tablets without excluding iPads, but has not yet publicly released its Q2 metrics. )pew ever, Dilger notes that for Q1, Canalys did acknowledge Apple as the largest global vendor of computers, with Lenovo in second place and HP, Samsung and Dell nearly tied for third place.

Dilger accuses IDC, Gartner and yet another market research firm Strategy Analytics of habitually presenting “carefully contrived data” in press releases in order to “flatter their clients and denigrate their clients’ competitors, with Apple being a common target,” and that due to their regular press releases “clouding the facts on phone, PC and tablet sales, there appears to be a mass delusion among consumers and journalists as to why and how Apple is earning the vast majority of profits in phones, tablets and conventional PCs.”

He says IDC has also obscured the reality of Apple’s iPad sales by comparing them to kids’ tablets and toys, in order to dilute Apple’s “market share” and imply that iPads are falling out of fashion, notwithstanding the fact that nobody is selling premium tablets in volumes like Apple with margins like Apple, noting that a glut of tablets being dumped on the market below cost should make it impossible for Apple to sell any iPads at regular price, yet Apple continues to sell iPads in quantities far above any other individual tablet vendor.

You can read Daniel Eran Dilger’s entire “j’accuse” here:
http://bit.ly/1nw6Xpp