An Old Favorite May Save Apple from Being All About iPhones
It won't be the iPod that saves Apple. The portable media player has been steadily declining for a couple of years. It also apparently won't be the iPad, which is coming off of back-to-back quarters of sharp year-over-year declines.
The eventual savior may come in the form of a smartwatch, fitness tracker or whatever Apple is cooking up in the realm of wearable computing. However, we'll have to wait until Apple is ready to roll out these new products -- and even longer before they gain enough traction to move the needle.
But, let's not forget about the Mac. The product line that initially put Apple on the map -- its unique take on the personal computer -- is starting to have a surprising resurgence. This could be Apple's ticket to diversifying its revenue stream, but it's not going to be easy.
Apple posted encouraging news on the personal computing front on Tuesday afternoon. Mac sales soared 13 percent since the prior year's fiscal third quarter, sparked by an 18 percent surge in the number of units sold.
Apple's Mac business grew faster than the 9 percent uptick in iPhone revenue, but we need to frame this dynamic appropriately. Apple's $19.8 billion in iPhone revenue accounted for a record 53 percent of its overall revenue. The 4.4 million Macs it sold -- ringing up $5.5 billion in revenue during the quarter -- accounted for just 15 percent of Apple's top-line results. Then again, with Mac sales closing in on the diminishing iPad's $5.9 billion in sales, we may be seeing passing ships here. Unless Apple raises the bar convincingly in its suddenly tired iPad line, we could see Macs return as Apple's second-largest category in a quarter or two.
The Mac's momentum may be largely an international phenomenon. Industry tracker IDC reported earlier this month that Apple was the only one of the five major American PC makers to post a year-over-year decline in shipments in the U.S. during the three months ending in June. This would seem to contradict Apple's own results after the market close on Tuesday, but the key distinction is that IDC is measuring just stateside shipments.
Apple is faring better overseas, and its latest financials bear that out with overall revenue climbing 6 percent -- but just 1 percent in the Americas. However, it does seem as if sentiment for the PC is starting to come back as the global economy shows signs of life and many people realizing that a tablet can't do everything that they used to do with a PC.
%VIRTUAL-article-sponsoredlinks%It also only helps that PCs are getting cheaper. The proliferation of inexpensive Google's (GOOG) Chromebooks and Microsoft's (MSFT) decision to work with PC makers to improve the reach of Windows through cheaper licenses have helped breathe new life into previously stagnant desktop and laptop sales. For instance, a $199 Hewlett-Packard (HPQ) laptop running Windows 8.1 will hit the market later this year.
Apple is expected to stick to the high end of the pricing market. However, seeing units climb faster than sales is proof that the average Mac or MacBook is getting cheaper.
It will have to continue to move in that direction, especially if the folks who traded in their laptops for tablets are coming back to laptops. Apple has momentum, at least on a global basis. If the iPad continues to slide or the iPhone peaks, it better make sure that it can dust off the old Mac playbook to keep the good times coming.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Try any of our newsletter services free for 30 days.