Processor shortage cuts into Mac sales

By

iMac
Apple would have sold more of these if it weren’t for Intel.
Photo: Apple

Apple saw a small but significant year-over year reduction in Mac sales during the first three months of 2019. This wasn’t because customers didn’t want to buy macOS notebooks and desktops however, but because Apple couldn’t get the Intel processors required to produce the computers.

CEO Tim Cook said “For our Mac business overall, we faced some processor constraints in the March quarter, leading to a 5 percent revenue decline compared to last year. But we believe that our Mac revenue would have been up compared to last year without those constraints, and don’t believe this challenge will have a significant impact on our Q3 results.”

All MacBooks and iMacs run on Intel processors, and this chip maker has been struggling to meet demand. Last fall, Intel CEO Bob Swan said that stronger than expected growth in data centers is straining his company’s capacity. “We’re prioritizing the production of Intel Xeon and Intel Core processors so that collectively we can serve the high-performance segments of the market. That said, supply is undoubtedly tight, particularly at the entry-level of the PC market.”

Shortages like this are cited as one of the reasons Apple is reportedly considering switching macOS from Intel processors to ARM-based ones. Apple would designs these itself, then outsource production to a number of companies.

How Intel’s problems affect Apple

During the first three months of this year, Apple pulled in $5.5 billion in revenue from Mac sales. As Cook noted, that’s down from the $5.8 billion in revenue during the same period of 2018.

It’s not known how the shortage affects the actual number of Macs sold, as Apple no longer announces this figure. Still, analysts are likely to be out with their estimates soon.

Like the CEO, Apple’s CFO Luca Maestri is staying positive about the Mac business. “On a global basis, nearly half of the customers purchasing Macs during the quarter were new to Mac, and the active installed base of Macs reached a new all time high.” That means more macOS units are going into use than are being retired.