PC Market exodus continues as LG considers quitting, Mac prices & margins leave Apple almost immune

PC Market exodus continues as LG considers quitting, Mac prices & margins leave Apple almost immune:



PC manufacturers seem to be dropping like flies at present. Shortly after Sony confirmed it was selling its PC business and Vaio brand, LG is rumored to be planning its own exit from traditional PCs, to focus on smartphones, tablets and ‘convertible’ PCs (touchscreen Windows tablets that flip round into a laptop).

Other manufacturers are witnessing falling sales, prices and profits – with The Guardian calculating that the average profit per PC in the third quarter of 2013 fell to just £14.87 ($24.09). One manufacturer of conventional-format PCs, however, has remained almost immune to the trend: Apple …

While the prices of Macs have fallen, the decline is far less severe than that experienced by Windows PCs, with average selling prices having fallen from $1277 in Q1 2010 to $1229 in Q3 3013 – leaving Apple with ten times more profit.

And how profitable are Macs? Apple doesn’t break out the figure for Mac profitability. But Horace Dediu of the Asymco consultancy reckons there’s a good-enough rule of thumb: assume that Macs have an 18.9% profit margin, which fits well enough with its historical operating margins.

That metric gives a hardware per-PC profit which has dropped from $241 to $232 – an erosion, certainly, but a margin that Windows PC makers would kill for: it’s more than 10 times greater than their per-PC profit.

Gartner is also forecasting that Apple will continue to make market share gains against Windows PCs, reaching an 11 percent share by 2017.

Filed under: AAPL Company Tagged: AAPL, Apple, Apple profitability, Horace Dediu, Mac, Mac financials, Mac margins, Mac numbers, Mac profitability, Macintosh, Microsoft Windows, Personal computer, Vaio, Windows

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