Apple has released its third quarter financial results, and they are decent: year on year revenue is up fractionally, from $35.023 billion to $35,323 billion, though profit is down from $8.8 billion to $6.9 billion.
Compared to the third quarter in 2012 though, Mac sales are 7% down though, from 4.02 million units to 3.754 million units. Revenue from the Mac has declined by 1%.
In isolation this is not a dramatic change, but the statistic is more interesting when you put it in context with what is happening with Windows PCs. Windows 8 is nearly a year old, released to manufacturing on August 1 2012 and generally available from October 26 2012.
Windows 8 has received a mixed reception, with many users reluctant to adopt the reinvented operating system, which replaces the Start menu and adds a touch-friendly tablet platform alongside the desktop user interface. So far it has done nothing to stem declining PC sales and may have accelerated the process. Gartner reports a 10.9% decline in worldwide PC sales in the second quarter of 2013 (same as Apple’s third quarter). Gartner’s figures also include Macs, though Gartner estimates only a 4.3% unit decline.
The evidence is that gains in Mac sales at the expense of Windows, which is a long-standing trend, is continuing, insofar as Mac sales have declined by less than the PC market overall. However the figures confirm that the decline in PC sales is due to fundamental changes in personal computing, in favour of tablets and other mobile devices, rather than market response to an unpopular Windows edition.
The twist here is that Windows 8 is designed for exactly that trend; and while there is plenty of scope for argument about how Microsoft has addressed it, there is little doubt that it was right to come up with a version of Windows for tablets – and one that was not a reprise of its previous stylus-based efforts.
My own view is that Windows 8 is a plausible strategy and that Microsoft should stick with it. Earlier comments on Windows RT are relevant here.
Hybrid devices that twist between laptops and tablets are not the answer though. They are transitional machines which end up too heavy and expensive to be good tablets. Many users will buy a cheaper laptop instead.
The question for Microsoft now is how much tablet market will be left by the time the Windows app ecosystem matures to the point when a Windows tablet can really compete with an iPad for usability and utility in pure slate form.
Apple has problems too. iPad sales are down by 27% from the same quarter last year, though iPhone is up 15%. The reason, I suspect, is Android.