Apple's in-store sales fell sharply from 2008, but its online store traffic soared

Apple's busy Fifth Ave. store. Photo: ped

A pair of reports from Piper Jaffray's Gene Munster tell the story.

The first, issued early Monday morning, gave the results of a headcount performed at three Apple (AAPL) retail stores on Black Friday, the traditional start of the holiday selling season. Although the stores were busy, his team counted an average of 8.3 Mac sales per hour, down 36% from the 13 Macs per hour they observed on the same day last year.

Munster's second note, sent nearly seven hours later, reported on comScore data indicating that sales at traffic on Apple's online store Friday was up 39% year over year.

"Apple's online store had a big day on Black Friday," Munster concludes, "offsetting the y/y decline in our retail store checks."

Based on NPD data that showed U.S. Mac sales up 7% year over year in October, Munster had previously estimated that Apple would sell 2.856 million Macs in the quarter that ends Dec. 26. That's up from 2.524 million Macs in the same quarter last year, but down from the record 3.053 million Apple sold last quarter.

UPDATE: More field checks and estimates below the fold from Kaufman Bros.' Shaw Wu, Thomas Weisel's Doug Reid and Deutsche Bank's Chris Whitmore.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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Apple.com was the exception in comScore's report on retail sales for Cyber Monday 2008, the biggest online shopping day in a year marked by global financial meltdown.

While its competitors were offering deep discounts to pull in recession-battered customers, Apple (AAPL) had already ended its Black Friday sale and by Monday was back to charging its usual premium prices for laptops, desktops and MP3 players.

Yet its online store still managed to grab the No. 5 spot in comScore's ranking of the top 20 most visited retail sites on Monday Dec. 1, handily beating not only Dell (DELL) and Hewlett Packard (HPQ), but such full-fledged retail outlets as Best Buy (BBY), Toys "R" Us and Circuit City (CC).

Apple.com drew nearly 3.7 million visitors that day, up 43% from November's somewhat depressed average. The big winner for Cyber Monday was eBay (EBAY), with nearly 13 million visitors, followed by Amazon (AMZN; 9.2 million), Wal-Mart (WMT; 6.7 million) and Target (TGT; 4.8 million).

Overall, according to comScore, online spending was up 15% from 2007, driven by a 22% increase in the number of buyers. But those buyers made 9% fewer purchases than last year, and they spent 5% less.

Below the fold: comScore's top 20 chart, its breakdown of e-commerce spending and, perhaps most usefully for tight-fisted shoppers, its ranking of the top 10 comparison shopping sites, in which Shopzilla.com was the big winner. More

Piper Jaffray analyst Gene Munster and his research team spent 10 hours counting Mac and iPhone sales in five Apple retail stores during the post-Thanksgiving shopping frenzy, and this is what they saw:

• Discounts on seven items (including some Macs but no iPhones) that averaged about 8% off.
• Mac sales that averaged 13 units per hour per store, up from 2 per hour clocked earlier in November.
• iPhone sales that averaged 3.4 per hour (not including iPhone gift cards), up from 1.3 per hour .
• Munster's conclusion: Macs are selling better than expected this holiday season; iPhone sales are in line with expectations, although they were probably undercounted.

In the "investment recommendation" section of the report, which was e-mailed to clients early Monday morning, Munster slips in an explanation of how he can maintain a target of $250 a share in the face of Apple's (AAPL) precipitous 12-month decline.

His target is based on 20 times earnings, which is in line with other analysts. But rather than using the usual EPS, based on generally accepted accounting principles (GAAP), he's using Apple's non-GAAP earnings, which include revenue from iPhones that would otherwise be booked over two years.

Apple shares opened Monday at 89.91 and headed south in early trading.

For more holiday sales results, see Apple's Black Friday bestsellers.

In a holiday shopping season that got off to a better start than expected, Apple (AAPL) products sold particularly well — although not as well as last year, judging from sales at Amazon, America's largest online retailer.

The iPod Touch was Amazon's No. 1 best-selling electronics item Black Friday morning. By Sunday, however, it had dropped to No. 4 after the Kindle reader, a Canon (CAJ) Powershot camera and a Garmin (GRMN) GPS navigator.

All told, three of Amazon's top 10 bestselling electronics items — and 10 of the top 25 — were made by Apple. By the end of the holiday shopping season last year, five of the top 10 were Apple's (link).

In Amazon's computer department, a $1,170 unibody MacBook was the No. 4 bestseller — after a $320 Asus EEE PC and a pair of Acer Aspires marked down to less than $400. Last Christmas Eve, the No. 1 spot was held by a white MacBook on sale for $1,219 after rebate (link). This year, the same computer selling on Amazon for $968 failed to make the top 25 bestseller list, although a more expensive model with a bigger hard drive came in at No. 13.

By Sunday, five of the top 25 computers on Amazon were MacBooks. According to Kaufman Bros. analyst Shaw Wu, Apple could have done better it had cut its prices a bit more steeply. (link) Discounts at the Apple store this year were in line with 2007, whereas price cutting among Apple's resellers was considerably more aggressive. See here.

All in all, most analysts were surprised at how well this year's Black Friday sales went off — the fatal trampling of a Long Island Wal-Mart worker and a fatal shoot-out at a California Toys "R" Us notwithstanding (link). Sales at U.S. retailers the day after Thanksgiving came in at $10.6 billion, 3% higher than last year's, according to preliminary data from ShopperTrak RCT Corp., a Chicago-based research firm (link).

Online sales were particularly strong, according to Amazon (AMZN) and eBay (EBAY).

PayPal, the online payment service owned by eBay, reported nearly 34% more transactions this year compared with Black Friday 2007. PayPal said its sales numbers reflected a 12% overall rise in U.S. e-commerce for 2008. (link).

UPDATE: Comscore (SCOR) data for the first 28 days of the holiday e-shopping showed a considerably smaller Black Friday bump. According to Comscore's Sunday press release:

"For the holiday season-to-date, $10.41 billion has been spent online, marking a 4-percent decline versus the corresponding days last year, while Black Friday saw $534 million in online spending, up 1 percent. For the combination of Thanksgiving Day and Black Friday, online sales were up 2 percent relative to last year." (link)

[UPDATE: Apple has published its Black Friday sale prices, and while the savings on MacBooks and iPods are in line with last year's, there are steep discounts -- 50% and more -- on third party products. The resellers, meanwhile, are offering unually steep price cuts. See MacRumors, AppleInsider and Gizmodo for some of the best bargains. To see what shoppers ended up buying over the first weekend of holiday sales, see Apple's Black Friday bestsellers.]

You know times are tight when even Steve Jobs starts cutting prices.

Apple (AAPL), which keeps the tightest reins on list prices in the business, seems to have loosened them significantly this holiday season. Authorized resellers who normally wouldn't dare chop a nickel off Apple's suggested retail are cutting prices, offering rebates and plastering the Web with gaudy ads.

By Wednesday morning, the white MacBook that still lists for $999 on the Apple Store was selling for $899.99 at BestBuy, $899.95 at B&H Photo, $899.00 at Amazon and $868.99 at Club Mac and Mac Mall.

Apple store managers, meanwhile, are offering to match any advertised price — a policy they quietly followed in the past but now openly acknowledge. (see here)

And Apple.com has posted a pea-green teaser for a one-day Black Friday shopping event that promises unspecified bargains for shoppers willing to brave the crowds the day after Thanksgiving. Kaufman Bros. analyst Shaw Wu predicts Apple could be offering discounts of up to 15% on Macs, iPods and accessories, compared with 5%-10% in previous years. (see here)

It's not a price war worthy of Crazie Eddie Antar, but it's more retail aggressiveness than we've seen from Apple, which usually keeps its resellers on a short leash and limits its sales to Black Friday, Back to School and the occasional close-out.

We knew retailers were hurting this year. Now even Cupertino seems to be getting nervous.