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Apple sees 'pause' in Mac sales

Computer maker says some buyers waited for Intel-based Macs but that the sales slowdown was less than expected.

Ina Fried Former Staff writer, CNET News
During her years at CNET News, Ina Fried changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley.
Ina Fried
3 min read
Apple Computer executives confirmed on Wednesday that some buyers put off Mac purchases last quarter in anticipation of new Intel-based Macs--though that slowdown was masked somewhat by strong iPod sales.

In the holiday quarter that ended Dec. 31--which this year included an extra 14th week--Apple sold 1.25 million Macs. That was just a 1 percent increase from the prior quarter and below what many analysts had originally predicted.

Apple acknowledged that it saw some customers hold off on purchases ahead of January's Macworld Expo as they waited for the company to start making Intel-based Macs. However, Apple said it was pleased that the stall in sales wasn't more pronounced.

"Mac unit sales exceeded our internal expectations, despite what we believe was a pause in sales associated with the Intel transition," Chief Financial Officer Peter Oppenheimer said during a conference call with analysts and reporters following the company's earnings report. The company also issued a forecast for the current quarter that was less than most analysts had been projecting.

"We are targeting the second-best quarter in the company's history, second only to last quarter, with revenue of about $4.3 billion," Oppenheimer said. Analysts had been looking for more than $4.6 billion, according to Thomson First Call.

In making its forecast, Apple said it was predicting a seasonal decline in iPod sales, as well as a further hit to Mac sales, as the company continues its transition to Intel-based Macs.

"We did see a pause (in Mac sales) last quarter," Chief Operating Officer Tim Cook said on the conference call. "We factored what we saw last quarter into this quarter's guidance."

As for the first of the Intel Macs, Cook said he was "thrilled" with the early response to the new iMac, as well as the MacBook Pro. Given that the former is already shipping, Cook said Apple hopes to be able to meet demand for that product. However, demand for the MacBook Pro laptop, which won't ship until next month, is likely to exceed supply, he added.

"We may not be able to meet the demand on the MacBook Pro," Cook said.

Apple also said it will continue to expand its growing network of retail stores, which last quarter generated more than $1 billion of Apple's $5.7 billion in sales. "We will continue to add new stores at a measured pace and expect to open a total of 40 new stores in fiscal '06," Oppenheimer said.

Most of those stores will be in the United States, but the company also plans new shops in Canada, the United Kingdom and Japan, Apple said.

On other fronts, Apple noted that its music store again did better than breakeven, but the company did not quantify the size of the profit. The Mac maker said it was selling an average of 3 million tracks per day through its iTunes Music Store.

"We couldn't have been happier with sales of iTunes in the December quarter," Oppenheimer said. The company also promised that "there's more video content on the way."