Apple’s New Problem

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It seems Apple has not had a major problem for years. Its earnings have gone up with machinelike precision. It has over $150 billion in cash and a market cap of well over $2.5 trillion, making it the most valuable company in the world. Yet, it stumbled recently as sales of the Mac took a hit while most of its competition’s sales improved. ( These companies control over half their industries. )

According to International Data Corp.'s Worldwide Quarterly Personal Computing Device Tracker, Apple’s market share fell in the year's first quarter. The industry, in general, had a problem: “Global shipments numbered 56.9 million, marking a contraction of 29.0% compared to the same quarter in 2022.” The slowing economy was to blame, according to IDC experts. The hope was that as current computers age, there will be a rebound in sales in 2024.

Apple’s market share in the first quarter was 7.2%, down from 8.6% in the same quarter a year ago. Unit sales were 4.1 million, a decline of 41% over the same period.

While all the largest personal computer companies had declining sales, Apple’s percentage was by far the worst. Industry leader Lenovo had a 30.3% drop to 12.7 million units. The second-place company, HP, saw sales fall 25% to 12.0 million.

The reasons for Apple’s performance are hard to gauge. One might be that Macs tend to be more expensive than most PCs. In a tough economy, people may be unwilling to pay the extra money.
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Fortunately for Apple, Mac sales are not critical to its financial success. iPhone sales remain the driver. In the most recent quarter, Apple had revenue of $117 billion. Mac revenue was slightly less than $8 billion of that.

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