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In his own words: Tim Cook on Apple earnings and more

Macworld Staff | Jan. 25, 2013
What Tim Cook said about Apple, the first quarter of 2013, the iPad, and more in the company's first quarter earnings call.

Why the Mac decline?

I think the best way to answer this is if you look at the previous year['s quarter], our Mac sales were about 5.2 million. This year, they were 4.1 million, and so the difference is 1.1 [million]. Let me try to bridge that.

iMacs were down by 700,000 units year over year. As you remember, we announced the new iMacs late in October. And when we announced those, we announced that they would ship--the first one, the 21.5-inch--in November, and we did ship it at the end of November. We announced that the 27-inch would ship in December, and we did ship that in mid-December. And so there were limited weeks of ramping on these products during the quarter.

We left the quarter with significant constraints on the iMac. And we believe--we know--that our sales would have been materially higher if those constraints would not have existed. We tried to tell people this on the conference call in October; I think I said that we would have significant constraints on iMac. But I recognize to some folks, this may be a surprise.

Number two: If you look at last year, as Peter went through in his opening comments, we had 14 weeks in the quarter, we had 13 weeks in the quarter this year. Last year, in the average week, we sold 370,000 Macs.

The third part of the bridge here would be that our channel inventory was down from the beginning of the quarter by over 100,000 units, and that's because obviously we didn't have the iMacs in channel inventory and it was in significant constraint.

So if you just take these three factors, they bridge more than the difference between this year's sales and last year's sales. Now in addition to these three points I would point out two other things, and these are lesser things than the total of these other three, obviously.

One, the market for PCs is weak. IDC's last estimate, I believe, was around -6 percent. Two, we sold 23 million iPads and we obviously could have sold more than this because we could not build enough iPad minis to come into a demand balance. And so we've always said there's some cannibalization there, I'm sure there was some cannibalization of Macs there.

But the three large factors, the aggregated total of the three large--the iMac; the difference in seven days of the previous year; and the channel inventory--I think more than explains the difference between this year and the previous year.

As a side-note, if you looked at our portables alone, they were in line with IDC's projections of market growth.

 

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