Mac sales are resuming normal growth, after pandemic and Apple Silicon bumps

Understanding what’s happening to Mac sales over the past few years is a tricky business, due to the convergence of three different factors: pandemic-induced demand, COVID-related supply disruptions, and early upgrades driven by the switch to Apple Silicon.

Last week’s earnings report led some to wonder whether Mac sales were in trouble, but my own view is that the underlying longer-term trend of slow and steady upward growth is essentially unchanged …

When Apple reported its fiscal Q4 2023 earnings last week, it’s undeniable that on a year-on-year basis, Mac sales fell off a cliff. Mac revenue for Q4 2023 was a full 34% down on the same quarter in 2022.

Apple offered an explanation for this:

• Q3 2022 saw COVID-related factory shutdowns, so Mac supply was constrained
• When production fully resumed, that saw an artificial spike in Q4 2022 sales
• So of course Q4 2023 didn’t match this artificial peak

Macworld’s Jason Cross wrote a provocatively-titled piece: No matter how Apple spins it, people have stopped buying Macs, in which he initially appears to take issue with this argument.

By using this excuse, Cook and Maestri are deflecting attention from the real, incontrovertible numbers: Mac revenue for fiscal 2023 was $29.4 billion, down 37 percent from the previous year’s record $40.2 billion. That’s a “tough compare” that includes both the quarter where the Mac was affected by factory shutdowns and the quarter where Apple sold a whole bunch of Macs in order to fulfill demand. Put them together, and it’s still a stupendous drop in sales.

This year’s Mac revenue number was also down 20 percent from fiscal 2021 when Apple sold $35.2 billion in Macs. So it’s a dramatic drop from the last two years of Mac sales, no matter how you slice it.

Headlines are short; articles are long – so it’s no surprise that Cross’s position is more nuanced than it might appear. He goes on to say that if you completely disregard 2021 and 2022, then 2023 actually sees us returning to the previous trendline.

This is very much my own view. With millions of people working from home during pandemic lockdowns, people needed machines which would allow them to work effectively using nothing more than the kit they had at home. That generated a huge surge in laptop sales in general, and in Macbooks specifically.

At the same time, Apple Silicon Macs arrived on the scene. People generally hang onto their Macs for a long time. Five years is probably typical, while they still remain very usable for ten. Intel-based Macs were more of a gradual evolution, so there wasn’t much reason to upgrade more frequently.

But Apple Silicon changed that. The improvement in both processing power and battery life was so great that many were tempted to upgrade much sooner than usual.

Put the two factors together, and it’s no surprise that there was a massive spike in Mac sales in 2021 and 2022.

What we’re seeing now is the resumption of business as usual. While the pace of Apple Silicon development is undeniably faster than that of Intel, few can afford to upgrade their Mac each time a shiny new chip is released. Most people will make the jump to an M-series Mac earlier than planned, then return to their normal upgrade cycle.

We’ll need to wait a few quarters to be sure, but my own view is that after these spikes, the long-term trend for Mac is going to be steadily upwards, just as it was before. How about you? Please share your own take in the comments.