Mac Musings

Macintosh Unit Sales Grow 43% vs. 2004

Dan Knight - 2005.04.14 - Tip Jar

Stunning. That's the word that comes to mind on hearing Apple's financials for quarterly sales.

The other sites are headlining $290 million profits or 5.3 million iPods sold - and that's definitely good news. But the big news is a 43% growth in unit sales.

If Apple can continue that trend, unit sales for FY2005 should be in the 5.0 to 5.5 million unit range. This from a company that has struggled to sell 3-4 million units per year since the late 1990s.

The only Mac area where sales were down compared to a year ago and to the previous quarter was Power Macs. iBook sales were down against the holiday quarter, but they were also up 25% compared to a year ago.

Money

Revenue for the quarter was up 70% over 2004, this in spite of new, low cost items (iPod shuffle, Mac mini); blowing out discontinued iPods; and reduced prices on some units - again, especially iPods.

The iTunes Music Store brought in $216 million during the quarter, up 22% from the holidays and up 260% over a year ago.

Software, which includes OS X, saw sales of $239 million, an increase both sequentially and year-over-year. With the release of Tiger at the end of this month, that segment of Apple's business should do especially well over the current quarter.

Apple also announced that in the future they will not break down sales figures in iMac, Power Mac, iBook, and PowerBook categories. Instead, they will only share raw desktop and portable sales figures.

What It Means

Apple is profitable. Very profitable. Revenue skyrocketed, unit sales grew, and gross margin increased to 29.8% - two percent higher than a year ago. They're doing something right.

While Mac unit sales rose 43%, computer revenue only increased 27%, accounting for 62% of total quarterly revenue. iPods accounted for 31% of quarterly revenue. With iPods outselling Macs five-to-one, Apple is becoming known as the iPod company.

Apple now has two solid revenue streams - computers and music - and there does seem to be an iPod "halo effect" that makes iPod owners more favorably disposed toward Macs.

All told, it looks like a very rosy future for Apple Computer. The iPod has become a smash hit, iPod shuffles dominate the flash market, and the Mac mini is a runaway success.

With a new version of OS X (10.4, a.k.a. Tiger) due in a couple weeks, Apple should see another surge in hardware sales - and a boost in software sales, since there are more people who can migrate to Tiger than to any previous version of Mac OS X.

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Dan Knight has been using Macs since 1986, sold Macs for several years, supported them for many more years, and has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.

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