The slowdown in the PC industry may have finally caught up with Apple, if the latest industry gossip is to be believed. A new report from Korea says that Apple discontinued production of its M2 series processors, the chips used in the MacBook Pro, MacBook Air and Mac mini, in January.
Do you feel the pressure?
The report says that third-party companies working with TSMC-supplied packaging processors had to cease production in January and February due to a drastic slowdown in orders. It adds that while production resumed sometime in February, it did so at "half the level of the previous year."
It's worth noting that Apple hit new Mac sales records around this time last year and posted record Mac revenue for its March quarter. Against the backdrop of the industry's decline, it would be hard for Apple to maintain that momentum.
Speaking during Apple's latest financial call, Apple CEO Tim Cook warned that the PC market is going through tough times. "The industry is shrinking," he said.
And while Cook is convinced that Apple's silicon gives the company a strategic advantage going forward, he cautioned: "I think it's going to be a bit difficult in the short term."
Slow chip production may have been deliberate
Since it couldn't prevent the slowdown, Apple seems to have tried to navigate it. Industry watchers will recall that last fall there was speculation that Apple would introduce Macs powered by the M2 Pro and M2 Max in late 2022. Ultimately, these new Macs (MacBook Pro and Mac mini) didn't appear until January 2023.
It's plausible that Apple stockpiled processors waiting for use in these machines ahead of an earlier release, but then delayed their introduction in Spice Mac sales to the first calendar quarter of 2023.
If that were the case, a slowdown in manufacturing new processors would make sense, as the company would likely have plenty of processors available for this release.
This rate means that the production of new processors would inevitably be affected, especially if Apple plans to switch to M3 Mac later this year. That's not to say that all is rosy in the Apple Mac garden. We know the company is also affected by the industry downturn, because you've already alerted us to it.
Apple has already forecast a drop
Apple CFO Luca Maestri said of the quarter: "For Mac and iPad, we expect revenue for both product categories to decline by double digits year-over-year, due to difficult comparisons and macroeconomic headwinds."
Mac sales fell 29% year-over-year in the company's final calendar quarter of 2022, the company said in February. The segment grew from €10,8 million in the December 2021 quarter to €7,7 million in the fourth quarter of 2022. While this is bad news, the flip side of the coin is that Apple's market share compared to other PC vendors continues to increase.
The company admitted to three main inhibitors of Mac sales:
- Apple shipped its first M1 Pro and M1 Max Macs in October 2021 to enthusiastic reception.
- Global macroeconomic challenges have emerged.
- Exchange rate fluctuations continue.
Down for now, but room to grow
Apple is expected to introduce the industry's first 3-nanometer computers with the Mac M3 that we plan to announce at WWDC in June. These should provide significant performance and power efficiency benefits that build on those provided with the M1 and M2 systems. In terms of computing performance per watt, Apple will have a strategically important story to tell.
The 15-inch. The MacBook Pro may be among the first Macs to get the upgrade, but I see the increase in Mac sales becoming really noticeable once the chip makes it to the MacBook Air, given that it's probably one of the most popular PCs on the market. company at this time. So will the move to M3 Mac help boost sales?
Without stimulus payments during a global economic downturn, it seems unlikely that we can expect new company records, at least not yet.
It's also possible that many of the company's most enthusiastic Mac users have already invested in the Apple Silicon M1 or later Macs and still don't feel the need to upgrade, given that even the M1 Mac mini is still as capable a Mac as anyone can get. needs. most tasks.
But the fact that business users can now expect significant performance improvements every 12 months on their Mac is a huge step forward for Apple. This gives the company confidence that whatever near-term headwinds Mac sales may face, moving to its own silicon gives it a unique offering in a market where, even if sales may contract, they continue to grow.
(While the PC industry has grown 6% in recent years, Apple's Mac share has skyrocketed 60%).
Some supply/demand issues down the road are unlikely to derail this in any significant way. And it may also buy the company some time to more completely reconfigure its Mac manufacturing supply chain in India and Vietnam.
Follow me on Mastodon or join me at AppleHolic's bar & grill and Apple discussion groups on MeWe.
Copyright © 2023 IDG Communications, Inc.