Apple profits shine
Published: 20 Apr 2006 09:35 BST
Apple is still dealing with a pause in Mac sales as customers wait for new Intel-based systems, and it shipped more Intel-based Macs than PowerPC-based Macs in March after the release of the MacBook Pro, the company said on Wednesday.
Mac sales grew just 4 percent in the company's second quarter as compared with the previous year, but overall revenue grew 34 percent to $4.36bn (£2.44bn) during the quarter. That was below analyst expectations, but profits were much stronger than expected. Stronger iPod growth compared with last year helped drive overall growth as Mac sales hesitated in the midst of Apple's switch to Intel's chips, Peter Oppenheimer, Apple's chief financial officer, said on a conference call following the company's announcement.
Apple said the "pause" in Mac sales that the company saw during the previous quarter continued. Although Apple introduced the first Intel-based Macs in January, some of the products didn't ship until February and the company has yet to update its Power Mac and iBook lines.
Some customers are waiting for the rest of Apple's product line to move to Intel chips and for more software developers to create Intel-native versions of their software, Oppenheimer said.
"As we anticipated, this pause was even more evident in the March quarter," Oppenheimer said. "Our sales teams were not discouraged from telling customers to wait for Intel-based Macs if that was the best thing for the customer."
Shipments of the MacBook Pro notebooks did not really start to pick up until March, the end of Apple's second quarter, said Tim Cook, Apple's chief operating officer. But after those systems began to appear, shipments of Macs based on Intel processors were greater than shipments of PowerPC-based Macs, he said.
Part of the pause could be blamed on customers waiting for Universal versions of applications that would run on both PowerPC and Intel chips, Oppenheimer said. Some applications have been ported, but other important ones, such as Adobe's Photoshop, can run only on Intel-based Macs using the Rosetta translation software, which hurts performance. A Universal version of Photoshop is not expected for some time.
Professional customers are one of the groups affected by this delay, Oppenheimer said. Home users of Photoshop might be willing to tolerate the performance slowdown, but professional users wouldn't stand for it, he said. These customers are likely waiting for Power Macs with Intel's processors, and while the executives declined to provide specific launch details, Apple is on target to complete the transition to Intel's processors by the end of the year, Cook said.
Apple sold 1.1 million Macs in the quarter, down 11 percent from the December quarter. Most PC companies see a drop in sales from the fourth quarter to the first quarter of the calendar year, following the strong Christmas shopping season.
Although Apple's Boot Camp software was not introduced until after the close of the quarter, demand during the second quarter for the ability to run both Windows and Mac OS on an Intel-based Mac contributed to the launch two weeks ago, Cook said.
But Boot Camp users shouldn't count on any help from Apple if confronted with the infamous blue screen of death, Cook said. "We have no desire and no plans to sell and support Windows," he said.
CNET News.com's Ina Fried contributed to this report.
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