A few more data points out of research firm NPD Group’s report of Apple’s (AAPL) November U.S. retail sales: Growth didn’t just hit a wall last month — Apple’s sales shrank, and the company lost market share to rivals. Desktop sales were especially bad, while Apple’s notebook business still outpaced the broader PC industry.
Specifically, Apple’s November retail unit sales dropped 1% year-over-year, while overall PC industry sales increased 2% year-over-year, according to the WSJ. This suggests that Apple lost U.S. retail market share.
Desktop Mac sales — iMac, Mac Pro, Mac mini — dropped 35% year-over-year. On the bright side, notebook sales — led by new MacBooks — increased 22% year-over-year, about 1.5x the rate that Windows-based notebook sales grew.
Still, worse than October, when Apple’s overall Mac sales were up 28% year-over-year, or four times the overall PC market’s growth rate, according to NPD.
Disclaimers apply: This is one measurement from one source. It doesn’t include enterprise sales or overseas sales. The consumer economy is in the toilet. And it’s very tough to compare this November to last November as there were five fewer holiday shopping days. Apple should make up some ground in December.
But even with all those caveats, we can’t imagine anyone in Cupertino is happy that Apple sales shrank while the rest of the PC market grew.
So, what’s Apple to do? The rest of the PC industry has responded to the downturn by cutting prices and offering super-cheap “netbook” laptops.
WSJ: Apple rivals like H-P and Dell offered discounts weeks earlier than usual this holiday season, dropping some prices by as much as 50%. [Piper Jaffray analyst Gene] Munster said since last December, the average Windows PC price is down 35% to 45%; in contrast, Apple has offered only modest discounts of 5% to 10% on its PCs, analysts said.
We don’t see Apple slashing prices 35% to 45%. And we don’t see Apple selling a cheap netbook any time soon. “We don’t know how to make a $500 computer that’s not a piece of junk,” Apple boss Steve Jobs said during the company’s last earnings call. We believe Steve — though we think Apple has some portable computing tricks up their sleeve, like an iPod touch HD.
What we do see Apple doing: Announcing some updates to its desktop lineup early next year, potentially during Jobs’ keynote in a few weeks at the Macworld Expo in San Francisco. The Mac mini desperately needs a refresh, such as faster processing, and better tools to make it a home media centre, which many owners use it as. And MacRumors.com’ buyer’s guide tells us that iMac and Mac Pro updates are overdue, too.
That will be too late to make up for lost Christmas sales if Apple can’t crank things up in December. But after extrapolating October and November’s NPD data, Piper’s Munster still thinks Apple will sell 2.5 million to 2.7 million Macs this quarter, in line with the Street’s expected 2.6 million. That’s much slower sales growth than last year, but better than the rest of the industry is faring.
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