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Apple's Mac ends up in tablet cannibal pot, too

Gregg Keizer | Jan. 14, 2014
Tablet cannibals have taken as big a bite out of Mac growth as they have out of PCs in general, showing that Apple is not immune to the seismic shift it triggered with the iPad.

The Mac's eventual contraction, which started in the fourth quarter of 2012 and continued through the first three quarters of 2013, could also be used to refute the theory that Windows 8 was the prime cause of the PC industry's slump during that same period.

Some have blamed Windows 8 for the 2012-and-later decline, saying that customers avoided buying new machines because they'd heard the OS was confusing, relied on touch or had too few apps. While Windows 8 most certainly contributed to lower PC shipments, the fact that Macs also lost momentum at the same time, and without a similar OS headwind, is a sign that all personal computers have suffered more from a broader trend — namely, the popularity of tablets — than from a specific operating system's problems.

Cannibalization of Macs should not come as a surprise: Apple has acknowledged the tablet threat for more than a year. However, Apple was able to accept cannibalization — something PC makers and Microsoft have had a harder time doing — because it had the iPad to capture deserting dollars. In the last four quarters, Apple sold 71 million iPads, more than four times the number of Macs during the same time.

The Mac strayed into negative growth territory at the end of 2012, mimicking the downturn in the overall PC industry, which has been blamed on the seismic shift towards tablets. (Data: Apple, IDC.)

It's significant, for instance, that Apple CEO Tim Cook has publicly embraced cannibalization, but that Microsoft CEO Steve Ballmer has not.

"I see cannibalization as a huge opportunity for us," Cook said in January 2013. "Our base philosophy is to never fear cannibalization. If we do, somebody else will just cannibalize it. We know that iPad will cannibalize some Macs."

That doesn't mean Apple has to welcome future cannibalization. Like the PC industry in general, Mac sales may be destined for further contraction. Many analysts believe that annual global PC sales will drop to 300 million, where they will remain, perhaps for years. If the same happened to the Mac, sales would stabilize at between 15 and 16 million each year.

Or even lower: While Windows PCs will be able to count on corporations for continued sales, Macs rely mostly on consumers, who have spurned new systems more emphatically than businesses.

But Cook has said Apple has no intention of abandoning the Mac. "I don't think this [personal computer] market is a dead market or a bad market by any means," said Cook in April 2013. "I think it has a lot of life to it."

Perhaps. But a no-growth Mac division's influence within the company would be increasingly smaller as other product lines — the iPhone and iPad — continue to grow their sales. In the last four quarters for which Apple has reported revenue, the Mac accounted for less than 13% of the company's total, and in late 2012 the Mac's share was within a whisker of single digits, which would be an historic milestone.


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