: Trying to rationalize Mac sales and revenue


krs
Apr 24th, 2008, 02:11 PM
I just glanced at the Mac sales numbers that were presented at the quarterly conference call and have difficulty rationalizing them.

Apple regional business segments

Apple Americas accounted for 884,000 Mac shipments and $3.268B in revenues. These figures are up 46 percent and 32 percent year-over-year. Sequentially, shipments are up 5 percent with revenue down 24 percent.

Apple Europe accounted for 627,000 Mac shipments and $1.78B in revenues. Both these figures are up 45 percent and 43 percent year-over-year, but down 11 percent and 28 percent sequentially.

Apple Japan accounted for 118,000 Mac shipments and $424M in revenues. These figures have increased by 49 percent each year-over-year, as well as 30 and 6 percent sequentially.

Apple's Asia Pacific (and FileMaker Inc), billed as "Other Segments," accounted for 202,000 Mac shipments and $589M in revenues. These figures are up significantly, by 67 percent and 74 percent year-over-year. Sequentially, unit shipments rose 13 percent in the Asia Pacific regions with revenue decreasing 20 percent.

If Apple America sold 884000 Macs that generated 3.268B in revenue, doesn't that mean the average revenue per Mac was $ 3688.- per Mac?
That's for Apple, at retail this average revenue would top $ 4000.-

I don't quite see how one could get these average revenue numbers with a typical Mac probably selling in the $1500 range.

a7mc
Apr 24th, 2008, 02:23 PM
Just a quick correction in grammar to help you out...

The sentence should be broken down as:
Apple Americas accounted for 884,000 Mac shipments
and
Apple Americas accounted for $3.268B in revenues

That does not imply that the revenue was from Mac shipments. Otherwise the sentence would have been written as:
Apple Americas accounted for 884,000 Mac shipments for a total of $3.268B in revenues

Hope that helps.

A7

titans88
Apr 24th, 2008, 09:02 PM
This may sound dumb, but could "shipments" contain more than one mac?

krs
Apr 24th, 2008, 09:48 PM
Elsewhere it says that
"Apple shipped 2,289,000 Macintosh computers during the quarter, representing 51 percent unit growth and 54 percent revenue growth over the year-ago quarter."

Which is pretty clear.

If you add up America, Europe, Japan and Asia-Pacific in my first post, you get 1,831,000 Macs shipped, so you are still about 460,000 macs short which could be the rest of the world not covered in the four regions.

To really understand what is going on, one would need to look at the financial statement from Apple - a7mc is probably correct in that the dollar shipments relate to more than just Mac shipments although putting both these numbers in the same sentence is rather misleading, grammer not withstanding.

What is a bit odd is that Gartner shows Mac shipments in the first quarter 2008 for the US only exceeding 1 million units and Apple only showing 884 000 for all of the Americas (North- South- and Central-) for roughly the same quarter.
Regardless, Apple and the Mac are on a roll.

Gartner Says Worldwide PC Market Grew 12 Percent in First Quarter of 2008 (http://www.gartner.com/it/page.jsp?id=648619)

RunTheWorldOnMac
Apr 24th, 2008, 10:49 PM
The revenues would also include iTunes store, Apple TV, iPods, etc. which aren't Macs. I think the number of Macs pertains to computer shipments only.

chas_m
Apr 24th, 2008, 11:00 PM
a7mc has it exactly right. The sentence is simply fusing together two separate facts about Apple Americas:

1. That it accounted for a little less than half of all Mac sales this quarter, and
2. That their total revenue (which comes from all sources, not just Mac sales) was $3.2B. Their total revenue includes all sales of hardware, software, music, licensing -- anything Apple Americas has or does that makes money.

Seems pretty clear to me, particularly since they use the exact same structure in the other sentences about the other Apple divisions.

Adrian.
Apr 24th, 2008, 11:13 PM
don't underestimate the money they pull in from apple care and repairs not covered by it. that is almost pure profit.

chas_m
Apr 24th, 2008, 11:35 PM
I feel pretty confident in telling Adrian that AppleCare is not a significant moneymaker for the company, and in my experience only a SMALL percentage of customers elect to have Apple do out-of-warranty work at Apple prices.

Indeed, I would not be at all surprised if AppleCare represented a small loss. While many people buy AppleCare who never use/need it, the typical cost of repair (I'm talking about Apple's cost for parts + labour) on an average job far exceeds the price of the AppleCare.

There are tremendous costs associated with maintaining parts going back around seven years, technician costs, warehouse costs (there are at least two major repair centres in the US that I'm aware of), call centres (multiple, and no not all in India) etc etc.

Now, if you meant that in a small indie AASP shop like Connecting Point (http://connectingpt.com/) (my old store) repairs are reasonably close to "pure profit" (excluding the cost of tech, parts and infrastructure et al), then you would be closer to right. It was the major source of our store's income, and much more profitable than selling equipment.

cowasaki
Apr 24th, 2008, 11:46 PM
applecare obviously doesn't make "them" enough money, hence the need to "jack" the applecare price by 50-100 dollars, macbook and macbook pro respectively, for their portables.

krs
Apr 25th, 2008, 12:50 AM
The revenues would also include iTunes store, Apple TV, iPods, etc. which aren't Macs. I think the number of Macs pertains to computer shipments only.

Apple TV, IPods etc. are shown as separate business units in that summary of the conference call, but revenues could certainly be more than just Macs.
I was initially thinking anything Mac related like iWorks and other software.

If you assume the dollar numbers are total Apple revenues per region. ie all Apple products, then the totals don't come anywhere close to adding up correctly either. The total is short by almost $500 million which seems a lot for the few regions not identified like Africa, Australia and the MidEast.

Anyway, if anyone happens to come across the latest Apple quarterly report on the web - could they point it out. All I could find so far was Apple's first quarter 2008 report.

Adrian.
Apr 25th, 2008, 12:58 AM
Chas

I wasn't saying that it was a primary or even dominant source. But those guys were trying to figure out where all this extra money came from purely by examining units sold. I just wanted to say that applecare and service revenues should not be ignored in the revenue figures.

CubaMark
Apr 25th, 2008, 03:14 AM
Wow - and look what's happening on the dark side....
The world's largest software maker reported a 24 percent drop in sales of Windows last quarter and forecast earnings that may miss analysts' estimates, (Bloomberg (http://www.bloomberg.com/apps/news?pid=20601103&sid=a8nGrTszbc2g&refer=news))

krs
Apr 25th, 2008, 11:35 AM
So is this the beginning of the end for Windows?

Gartner Says Vista Will Collapse. And That’s Why The Yahoo Deal Must Happen (http://www.techcrunch.com/2008/04/11/gartner-says-vista-will-collapse-and-thats-why-the-yahoo-deal-must-happen/)

chas_m
Apr 25th, 2008, 12:04 PM
applecare obviously doesn't make "them" enough money, hence the need to "jack" the applecare price by 50-100 dollars, macbook and macbook pro respectively, for their portables.

Um, no.

Desktops tend to sit on desks. Not move around much.

Laptops ... don't. They get many orders of magnitude more abuse, even from people who handle them like the expensive things that they are.

Further, the parts or more expensive, and the labour more costly (I frickin' HATE working on G4 iBooks!).

Consequently, the AppleCare for laptops is more expensive.

Duh.

sae
Apr 25th, 2008, 03:20 PM
I think windows is here to stay for a VERY long time. That is not to say I don't think they need to start with a brand new core coding for the next version of windows. Having my first mac for only about 2 months now I can really appreciate how it works and having to constantly keep my dad's 2 PC's working at his business is not so much fun. He also had a laptop that came with a free Vista "upgrade" but I refused to install it and sold it on ebay instead. If only I could figure out how to reliably run simply accounting pro on either mac or linux then I'd make a strong case to my dad to dump his two pc's.

chas_m
Apr 26th, 2008, 06:06 AM
If only I could figure out how to reliably run simply accounting pro on either mac or linux then I'd make a strong case to my dad to dump his two pc's.

This question has been directly addressed here before:
https://www.ehmac.ca/anything-mac/49086-simply-accounting.html
The thread concludes that SA works just fine under Parallels OR VMWare.

And in this thread:
https://www.ehmac.ca/anything-mac/46040-simply-accounting-mac-book.html
We're told that CrossOver can also run SA just fine. It's further mentioned that there IS a Canadian-friendly accounting package that's similar to SA *and* Mac native called MoneyWorks (http://www.mgpacc.com/). I have no direct experience with either.