By Joe Wilcox, Betanews
Yesterday, Piper Jaffray analyst Gene Munster issued a report indicating that brick-and-mortar Apple stores sold 8.3 Macs per hour on Black Friday versus 13 per hour in 2008. Will Macs sales really be down this holiday and could it be because of, gasp, Windows 7?
Microsoft and its PC partners didn't have anything really new to offer consumers last holiday season. Macs had -- and still have -- a newness for many holiday shoppers, the majority of which already use Windows PCs at home or work. The only real barrier to buying a Mac during Holiday 2008 was price: Spending $1,000 or more. Same barrier remains this year.
Another difference -- and this must have some sales analysts scratching their heads: State of the economy. Holiday 2008 seemed so much worse, because of the late-September stock market crash that sucked billions of dollars in savings and equity out of world economies. Surely a year later things should be the same or better, not worse.
Yet another difference: PC manufacturers pulled back inventory for Holiday 2008, which turned out to be a smart stocking decision. Ahead of Holiday 2009, PC sales improved, despite truly gloomy analyst forecasts. Last week, Gartner predicted that worldwide PC sales would grow year over year in 2009, rather than decline as previously predicted. If more people are buying PCs, surely that should be good for Apple, right?
The reasons for Apple's Black Friday sales slowdown are probably more complex, and it's yet too early in the season to write-off Macs. But if there is a sales slowdown, even super secretive Apple will tell all. Poker players look for a "tell," some behavior that reveals what kind of hand the opponent might hold. If Mac sales are slower, Apple will tip off by discounts, promotions or other activities ahead of Christmas Day. Meanwhile, here is my shortlist of factors likely affecting Mac sales -- and they all in some way or another have to do with economy:
1. The econolypse's effects will impact holiday sales more this year than 2008. Absolutely, the stock market crash and uncertainty about larger economic collapse hurt Holiday 2008 sales. In November a year ago, many credit card companies started raising interest rates and minimum monthly payments, which also curtailed holiday spending.
A year later, consumer confidence may be higher, but not necessarily spending power. I'd contend that more people had more to spend a year ago than today:
- According to analyst estimates, in the United States one in five homes is worth less than the mortgage obligation. Credit Suisse predicts that unchecked the number could reach nearly 50 percent by end of 2010.
- Unemployed rose all year, now above 10 percent nationwide.
- More credit cards have raised interest rates and minimum payments, squeezing spending from the majority of Americans carrying some debt.
It's not surprising then that a recent Nielsen study found that 42 percent of Americans plan to spend less this holiday than last year and another 44 percent plan to spend about the same.
2. Consumers shop differently during the holidays than any other time of year. They wait for sales -- plain, pure and simple. Given the economy, many consumers are likely to wait and see if retailers will offer even better deals closer to Christmas. Wait and see is likely to be this holiday's mantra.
On Black Friday, I typically shop the shoppers and stores. This year, at anchor stores in several San Diego malls, I asked sales associates about Black Friday 2009 compared to last year. Consistently they said that shopping traffic was up, but spending was down from the same day in 2008. The point: Shoppers are spending more cautiously, looking for better deals and delaying purchases.
3. Mac dealers are offering sweeter deals than is Apple. Apple Store was not the place to shop for Macs this holiday, despite some pretty good deals. Online dealers like MacConnection or MacMall offered better pricing. Some of those discounts continue, typically using rebates. For example, Apple discounted MacBook Pros by $101 for Black Friday. MacConnection's price for the higher-end 13-inch MacBook Pro: $70 less than Apple, with $130 mail-in rebate, putting the price at $1,299, or $200 off typically selling price. Most buyers would pay tax on a Mac purchased from Apple, but not to online Mac dealers, which typically offer free, faster shipping during the holidays.
Sales shifting to dealers still means Macs sold, which is good for Apple even if its online and brick-and-mortar store sales don't zing this holiday. The question to ask: Where are the rebates coming from? Is Apple subsidizing them? That's a question I'll seek to answer as the holiday season proceeds. Apple subsidies would be a tell, suggesting slower overall Mac sales.
4. Windows 7 is likely pulling away some would-be Mac switchers. Mac has finally got some real Windows competition. More importantly, Microsoft and its PC partners are aggressively marketing Windows 7 computers. Marketing matters, just look at Apple's persistent iPhone and Mac TV commercials. Windows 7 is the brand new thing, and it will be available on PCs selling for much less than Macs.
In this economy, low-cost Windows 7 PCs will be good enough for many people. It doesn't hurt that Windows is familiar to most computer shoppers. Then there is the netbook phenomenon. Gartner asserts that Windows 7 will have negligible effect on 2009 PC sales, based in part on holiday forecasts. I'm not convinced, because low-cost netbooks running Windows 7 Starter or Home Premium will be a new thing to many shoppers -- and for ridiculously attractive prices compared to Macs. Then there are perceived benefits around size and portability.
So there remains question: What do you think? Will it be sales as usual for Apple this holiday or sales decline? Please answer in comments; please offer your reasons for Black Friday's apparent Mac sales decline.
Copyright Betanews, Inc. 2009
