PC sales spike with Windows 7 debut
Just three days were enough to push computer sales for the week up 40%
Click to enlarge. Source: Morgan Stanley, NPD
The sharp spike in the chart at right is the Windows 7 effect PC makers have been waiting for.
In a note to clients issued Monday afternoon, Morgan Stanley's Kathryn Huberty reports that NPD data for the week ending Oct. 24 — which included three days of Windows 7 sales — show PC sales jumping 40% year over year.
This was particularly encouraging, she writes, because sales in the early part of the week likely reflected the same pre-Windows 7 declines as the previous two weeks. PC buying for the weeks of Oct. 17 and Oct. 10 was down 29% and 2%, respectively, as consumers waited for Microsoft's (MSFT) new operating system to launch.
85% of Mac owners have Windows too
Photo: Apple Inc.
Approximately 12% of U.S. computer households own an Apple (AAPL) computer, up from 9% in 2008, according to the results of a survey released Monday morning by the NPD group.
But here's the kicker: the vast majority — 85% — also own at least one PC running Microsoft (MSFT) Windows.
There's a simple explanation for this. Mac users tend to own a lot more computers. In fact, 66% of Mac households own three or more computers, according to NPD, compared with 29% of Windows households. This probably means that Mac users know more about Windows than Windows users know about Macs.
More than 2,300 NPD panelists completed the survey. Among its other findings:
Munster: Apple on track to sell 2.7 million Macs in Q4
MacBook Pro. Source: Apple Inc.
Based on U.S. retail sales data released Monday afternoon by the NPD Group, Apple (AAPL) is on track to sell 2.7 to 2.8 million Macs and 9.5 to 10.5 million iPods in its fourth fiscal quarter, according to Piper Jaffray analyst Gene Munster.
Mac unit sales came in up 2% year over year in July, which according to Munster implies 3% to 7% growth for the quarter that ends in September — roughly in line with the Street's expectation of 5%.
"With just one month of data," writes Munster, "it is way too early to make a call on the quarter given ~50% of Mac sales in the quarter typically happen in the month of Sept."
He adds that international sales are growing faster than domestic for both Macs and iPods, which is why he expects reported sales to be slightly higher than NPD's numbers would suggest. He also notes that July 2008 was a particularly good month for the Mac, with unit sales up 43% over July '07, so achieving 2% growth over that is no mean feat. The next two months should be easier in terms of showing year-over-year growth.
Things aren't looking quite so rosy for the iPod.
MacBooks flew off the shelves in June
Photo: Apple Inc.
Piper Jaffray's Gene Munster issued a note early Monday morning warning clients that for Apple (AAPL) to sell the 2.45 million Macs the Street was expecting this quarter, there would have to be good news in the data due out from the NPD Group Monday afternoon.
"Mac NPD for the month of June needs to be flat in order for the entire quarter to be tracking in line with Street Mac consensus," he wrote, adding — in a golfing metaphor salesman slang — that he expected "slight upside to the flat bogey for the month of June, between flat and +5%" year over year.
Well, the NPD numbers came out and they blew past even his most optimistic expectations. Rather than up 5% in June, as he hoped, they were up a whopping 16%. More
MacBook back on top at Amazon
In a sign that should bode well for Apple's (AAPL) earnings in its third fiscal quarter — which ended Saturday — the MacBook has clawed its way back to the top of Amazon's (AMZN) bestseller lists.
The Mac, which once led the pack in the online retailer's Computers & PC Hardware Bestsellers category despite its $1,000 to $2,000 sticker prices, had fallen behind the blistering sales pace set by netbooks like the Asus Eee and the Acer Aspire One, which sell in the $300 to $400 range.
By June 1, the bestselling Apple computer on the list — a white plastic MacBook — had been pushed down to the No. 14 position.
But netbooks have started to fall out favor recently — as witnessed by reports of return rates as high as 30% and an NPD study that found that 60% of consumers who bought them didn't understand the difference between a netbook and a notebook.
Meanwhile, Apple announced on June 8 that it was refreshing its notebook line and lowering its prices. Result: its computers have become hot sellers on Amazon once again.
Apple's entry-level 13-inch unibody MacBook, renamed the MacBook Pro, has been one of Amazon's top 100 bestsellers for 20 days — basically since the moment it went on sale. As of Monday morning, it was the site's No. 4 bestselling computer overall and No. 1 in the laptop category.
In fact, three of the top 10 and five of the top 20 bestselling laptops on Amazon are now MacBooks.
Apple is not the only beneficiary of what some see as growing consumer disillusion with netbooks. HP (HPQ) Pavilions, Toshiba Satellites and Samsung Mini Notebooks are also selling briskly online.
See also:
iPod sales headed for their first decline – analyst
Piper Jaffray's Gene Munster puts a positive spin on it, but his analysis of retail data issued Monday afternoon by the NPD Group suggests that the Mac, whose sales declined year-over-year last fiscal quarter for the first time in nearly six years, will be joined next quarter by the iPod.
In a note to clients, Munster reports that NPD shows Mac unit sales down 1.8% between March and April and iPod sales down 9% in the same period. Average selling prices were flat for the Mac and down 11% for the iPod product line.
Based on this data and his estimates of online and overseas sales, Munster now projects that Apple will sell between 2.1 million and 2.3 million Macs in its fiscal Q3, which ends in June, and between 9.5 million and 10.5 million iPods.
That's down from the 11 million iPods Apple sold in the same period last year and represents the first year-over-year decline in iPod unit sales since Apple (AAPL) launched its hot-selling music player in Oct. 2001.
But as Munster notes, both sales estimates are in line with the Street's expectations, and the April numbers for Macs in particular are better than he expected, given the dismal economic climate.
"We see this as a positive data point," he writes, "given the uncertainty surrounding continued strength following the new desktops launched in March."
The NPD Group gathers proprietary retail data every month on a variety of products and sells the information to clients, including Piper Jaffray.
Among the analysts who track Apple, Munster has proved particularly skilled at making sales projections based on their data. He argues that NPD is a strong leading indicator, and supports that contention with a chart comparing NPD's Mac estimates with actual sales:
Mac, iPod sales each down 16% in February – NPD
The Apple (AAPL) numbers released by the NPD Group Monday were even worse than those predicted by Piper Jaffray's Gene Munster last week, yet he sees them as "a neutral or a slight positive" for the stock, given the uncertainties surrounding the entire computer industry this quarter.
NPD reported Mac and iPods sales both down 16% year to year in February, according to a report issued Monday to Piper Jaffray clients.
Analysts had expected both numbers to be down (although not quite that much), given how strong sales were in February 2008 and the fact that many Mac customers were holding out for the new machines that didn't get introduced until March 3. The Street was anticipating -4% growth in the February NPD Mac data, according to Munster.
Adding in overseas sales (which NPD does not measure), Munster now expects Apple to sell 2.0 to 2.2 million Macs by the end of the March quarter. He also estimates that the company will sell 9 to 10 million iPods in that period, in line with the Street's consensus of 9.5 million iPods.
As he did last week (see here), Munster says he thinks Mac sales will pick up in the last month of the quarter, thanks to the shipment of new iMacs, Mac minis and Mac Pros.
He also expects iPods to sell better in March, bolstered by the new iPod shuffles unveiled last week.
Finally, addressing the iPhone 3.0 special event scheduled for 10 a.m. PT (1 p.m. ET) Tuesday, Munster says he expects "significant new features" but no new iPhone hardware. Nor does he expect Steve Jobs, who is still on medical leave, to make an appearance at the event.
Mac sales bottomed out in February, says analyst
February is going to turn out to have been a dismal month for Mac sales — especially compared with last year — says Piper Jaffray analyst Gene Munster. But they should bounce back a bit in March, he adds.
The data on which Munster bases his predictions — domestic sales estimates made by the NPD Group — won't be released until next Monday, March 16. But that didn't stop Munster from posting the numbers shown in the chart above. (The last two data points are his estimates.)
"We expect Mac NPD to bottom out at around -12% y/y [year over year] in the month of Feb-09," he writes in a report to clients issued Tuesday. He cites two key factors:
- A tough comparison with February 2008, when unit sales got a bump from the new Macbook Air, which went on sale that month.
- A slowdown in Mac sales from customers anticipating the release of new machines — the iMacs, Mac minis, and Mac Pros introduced March 3.
March should look a little better for Apple thanks to sales of those new machines, says Munster. He expects NPD data to be flat for the month, which would leave Mac sales for Apple's second fiscal quarter down 6% — the first quarter of negative Mac sales growth since at least 2005.
The chart above shows both how strong Mac sales were at the start of 2008 and how much they have slowed with the onset of the recession.
The good news, according to Munster, is that the worst may be over. He expects "positive sentiment" to build after the February trough and push share prices up over the next several weeks.
Piper Jaffray's target for Apple (AAPL) is $180 per share. The stock closed Tuesday at $88.63 — up 6.64% for the day.
Apple sales data: Half empty, half full
It continues to amaze me that analysts who specialize in Apple (AAPL) can look at the same data and come to such different conclusions.
Case in point: Reports issued Tuesday morning by Bernstein Research's Toni Sacconaghi and Piper Jaffray's Gene Munster. Both analysts examined the latest NPD data — released a day before Apple's fiscal Q1 earnings call — but they didn't see the same thing.
"Sales Weak," begins the headline in the report by Sacconaghi, who has a history of bearish predictions for Apple. Based on the latest data, he is lowering his earnings and revenue estimates for both the quarter and the year.
"iPod & Mac Appear Solid," counters Munster, one of Apple's strongest supporters. Munster is sticking with his price target of $235 per share. The stock opened Tuesday at $81.97.
The NPD Group tracks retail sales for a broad range of products — including computers and MP3 players — and issues monthly reports that analysts pore over with the kind of attention Nathan Detroit lavished on parimutuel odds.
On Monday, NPD reported that December Mac sales were up slightly from a month earlier. This is how Muster reported it:
"In-Line Results A Positive Surprise. We have analyzed NPD data for all 3 months of the Dec. quarter (Oct., Nov., and Dec.) which is up 8% y/y, in line with the Street at 8% (we believe Street consensus is ~2.5m Macs in the quarter). We believe this data will be perceived as a slight positive given the rebound in the month of Dec. to +4% y/y, up from -1% y/y in the month of Nov., which some investors were using as an assumption for Dec."
Here's Sacconaghi's take:
"Mac. NPD data showed a significant deceleration in U.S. retail sales in November (1% y/y decline; see Exhibit6); desktop sales were particularly disappointing, with units down 38% y/y (in part reflecting a difficult compare). Data from Gartner and IDC suggests the market did not get any better in December."
This theme continues throughout their reports. Sacconaghi sees "significant deterioration" in iPod sales from the NPD data. Munster believes "the segment's outperformance relative to Street expectations is a positive."
Both analysts see the iPhone as a wild card, expecting international sales to offset what Munster calls "headwinds" in the U.S. market. But NPD doesn't provide data for cell phones, so the analysts were on their own.
Not surprising, their iPhone sales estimates are wildly divergent. Sacconaghi is calling for sales of 3.5 to 4 million units in the quarter that ended in December. Munster is sticking with his estimate of 6.4 million, but acknowledges that it might prove to be "aggressive."
Their estimates for Macs and iPods, on the other hand, are not so far apart.
Bottom line, for 2009 Q1:
- Mac sales. Munster: 2.5 million to 2.6 million. Sacconaghi: 2.57 million
- iPod sales. Munster: 18.6 million. Sacconaghi: 18.1 million
- iPhone sales: Munster: 6.4 million. Sacconaghi: 3.5 million to 4 million
We'll learn the truth soon enough. Tune in here after the markets close on Wednesday for our live blog of Apple's Q1 conference call.
See also:
Mac sales: Undone by the calendar
The latest retail numbers from the NPD Group have thrown Apple investors for a loop — and sent share prices down sharply.
To put the worst possible spin on the news, as the Wall Street Journal did in Tuesday's edition, domestic Mac shipments were down 1% year-over-year in November even as industry-wide PC sales rose 2%.
That was the data point that inspired Goldman Sachs' David Bailey to cut his 2009 estimate — saying that "some nicks have started to emerge" in Apple's growth curve and warning that the company faces "a tougher environment" in the first two quarters of next year.
To put the best possible spin on the news, as he is wont, Piper Jaffray's Gene Munster skipped over November's decline and focused on October's Mac sales, which were up 28% year-to-year, thanks to the release of new MacBooks on Oct. 4. He expects that by the end of the quarter, Apple will have sold 2.5 to 2.7 million Macs, up 8% to 16% from the same quarter last year.
So why did November's Mac shipments take that 1% hit? There could be several reasons.
I'd put my money on a global recession and the fact that Steve Jobs offered only one-day Black Friday discounts on Macs of 5% to 10%, while competitors like HP (HPQ) and Dell (DELL) were slashing already low prices as much as 50%.
Munster also blames the calendar, which offered Apple and the others 62.5% fewer premium shopping days this November:
"The month of Nov-08 included 5 fewer holiday shopping days (or days in November following Thanksgiving) than the Nov-07 timeframe," he wrote in a report issued to clients Monday afternoon. "In other words, Nov-07 provides a tough comparison for the y/y Mac and iPod growth."
NPD's data suggests iPod sales of 18.5 to 19 million units for the quarter, according to Munster, down 14% to 16% year-to-year. He had been expecting iPods sales to be slightly slower than they were.
UPDATE: NPD analyst Stephen Baker gave Reuters a different set of numbers that suggest Apple's notebook sales were actually quite strong in November, and that any weakness in Apple's computer sales was concentrated in its iMac line.
Sales of desktops were down 20 percent overall, with Windows desktops sales falling 15 percent and Macs down 38 percent. Apple's notebook sales, however, were up 22 percent in November, while Windows sales rose 15 percent.
"For notebooks, there is a little extra value to consumers (to buy Apple). For desktops I'm not so sure," NPD analyst Stephen Barker (sic) told Reuters. "To me the real story is the iMacs need a refresh." (link)
Apple (AAPL) fell 3.6% in Monday trading, to close at 94.75.
[Chart courtesy of the Wall Street Journal.]
