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Wednesday, January 23, 2013, 02:40 pm PT (05:40 pm ET)

Apple blames 17% drop in Mac sales on iMac supply constraints

Apple on Wednesday released its earnings for the first quarter of the 2013 fiscal year, revealing a precipitous drop in both revenue and shipments for Macs, a sector that once made up the core of the company's business.

For the quarter ended December 31, 2012, the Mac division moved 4.1 million units, generating $5.52 billion in revenue. That figure is down from 4.9 million units and $6.62 billion for the previous quarter, and 5.2 million units and $6.6 billion in revenue year-over-year.

iMacs

Apple blamed iMac production difficulties in part for disappointing Mac sales.


Revenue from the Mac sector has continued to shrink as a proportion of Apple's overall revenue. Even as Apple's mobile offerings have thrived — CEO Tim Cook said today the company had sold more than half a billion iOS devices — the company's notebook and desktop segment have dropped to just 10.1 percent of overall revenue, compared to 18.4 percent for the previous quarter and 14.2 percent for the first quarter last year.

Apple's Chief Financial Officer Peter Oppenheimer attributed the Mac division's disappointing figures to constraints in the production chain of new iMacs. The company began and ended the quarter with between three and four weeks of Mac channel inventory, according to Oppenheimer, below Apple's target of four to five weeks of channel inventory.

Oppenheimer noted that market research firm IDC projected the PC market to have contracted six percent over the quarter, while Mac sales slowed by 16 percent.

Cook said there were three main factors that contributed to the decline in Mac sales performance: constraint of iMac supply; the loss of one week from the last year's 14-week first quarter; and channel inventory constraints that were down by over 100,000 units at the start of the quarter.

Commenting further on the issue, Cook reiterated the impact of iMac production issues, noting that "if you look at our portables alone, they were in line with IDC's projections of growth." Cook also pointed to the 23 million iPads Apple moved in the quarter, saying "we've always said there was some cannibalization, and I'm sure there was some cannibalization of Macs there."