Peak Mac?

Was 2012 a one-off year of treading water for Apple’s Mac business? Or has the Mac peaked for good?

After years of impressive growth, Mac shipments declined in 2012. During the December quarter, Mac shipments dropped a conspicuous 22% from the year before, their biggest decline in at least 10 years. (See charts below.) The weaker holiday quarter also caused Apple’s full-year Mac shipments to drop in 2012, while iPad and iPhone sales grew: Apple shipped 43 million more iPhones and 25 million more iPads in 2012 than it did in 2011. But it shipped 778,000 fewer Macs.

Apple CEO Tim Cook explained on the company’s earnings call that newly redesigned iMacs were not available for most of the quarter, that the quarter was shorter last year than in 2011, and that inventory levels were lower, concluding, “if you just take these three factors, they bridge more than the difference” between last year’s sales and the year prior. In other words, this could just be a one-time thing.

But two longer-term trends might signal a deeper slowdown in the Mac business: The overall decline of the PC industry and the rise of tablets, led by Apple’s iPad.

First, the broader PC industry was weak again in the December quarter — Cook recalled a -6% estimate from IDC, and I’ve cited Gartner’s -5% estimate in the charts below. On past calls, this was a point of pride for Apple — it had outperformed the PC industry every quarter for years. But perhaps the declining interest in PCs — to some extent, because of rising interest in tablets — is finally catching up to the Mac?

The bigger story is, of course, the rise of tablets, especially the iPad. Cook again cited some iPad cannibalization of Mac sales on the call. (He has always said that was a Good Problem To Have, and I agree with him.) And if you add Mac and iPad shipments — the last chart below — Apple’s “computer” sales are growing like crazy, and have never been stronger.

If Steve Jobs was right — PCs are trucks, tablets are cars — then it might be hard for the Mac to ever grow the same way that it did before, especially now that the iPad has become such a big hit. This is a good thing for Apple, where the iPad now generates twice the revenue that the Mac does — just not a good thing for the Mac chart.

The big-picture questions are:

• Has Apple exhausted the potential market for Macs? (No, probably not, but it’s not as exciting as the iPad market.)
• Would it invest in something like an even-cheaper MacBook, which could drive Mac sales higher again? (Isn’t that the iPad?)
• Are things like iPhones and iPads — and just better Macs than before, such as the amazing MacBook Air I’m using now — driving slower Mac replacement cycles? (In my case, yes, but perhaps I’m an anomaly.)

All this in mind, it seems more likely that Mac sales will either stay flat or have started their long-term decline than they’ll ever reach, say, 10 million in a quarter. But, as Apple has proven many times now, anything is possible.