As Windows 8 Flops, Apple Makes 45% Of All PC Operating Profit

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There may not be a lot of agreement on whether or not Mac sales are up or down right now, but one thing’s for sure: the overall PC market is dying, with the latest quarter seeing the largest overall contraction in PC sales in the last two decades.

That’s not to say you can’t make a lot of profit still selling PCs, but as the chart above proves, profit is no longer linked to volume… and as they do in the smartphone and tablet markets, Apple owns the largest share of the profit to be had.

Analysing the sales troubles facing PC makers these days, Horace Dediu over at Asymco summarizes the problem nicely:

The real problem for the PC vendors is not that they have such low margins–they’ve had low margins for decades. It’s that the volumes which “made up for” low margins are disappearing. Apple is not immune to a gradual erosion of Mac volumes, but they have positioned themselves for growth with devices and content commerce and services. They have essentially “escaped” PCs and indeed caused the need to escape in the first place.

The problem is what could the others do? It seems all they can do is depend on Microsoft getting their strategy right.

Almost three decades after the debut of the original Macintosh and the Windows operating system, Apple’s strategy of integrating its software with its hardware is paying off. PC makers are making some of the best physical hardware they’ve ever produced, but Windows 8 and Windows RT are shaping up to be a profound misstep that has put the entire PC making industry, sans Apple, at risk. Outsourcing your software to someone else might be cheaper and easier for more companies, but it puts your business at risk when your partners fail. At least Apple has no one to blame but themselves.

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  • Steffen Jobbs

    Those companies over the years have done fairly well and now that Apple is taking over a fair amount of their profits, why is Apple’s share price continuing to flounder? Those companies profits were able to sustain those companies but yet those combined profits can’t even hold up Apple’s share price. How much of the profits will Apple need to keep investors satisfied? The economy must really be messed up.

  • LTMP

    The economy must really be messed up.

    Who ever said “the markets are rational” was completely irrational.

  • Gregory Wright

    I think Apple statistics are skewed. Many Apple customers put off buying or replacing their Macs until Apple came out with the refreshed MacBooks Pros and the new iMacs (Late 2012). Apple customers are loyal and they waited for the refresh. So, what seems like an increase in sales is really customers buying or replacing units they would have purchased in 2011 and early to mid 2012.

  • TechBell

    Which will force Microsoft more into manufacturing because they do not have real clout with third-party PC makers because no one is buying their products.

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his girlfriend and two parakeets. You can follow him here on Twitter.

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