Apple (AAPL) is the exception to what one analyst describes as a “permanent and structural” collapse of PC pricing and revenue triggered by the onset of the recession and the rise of low-cost netbooks.
In the chart reproduced at right (click to enlarge), TBR analyst Ezra Gottheil documents a 13% drop in average selling price (ASP) and an 18% decline in PC revenues in the fourth quarter of calendar 2008.
“ASPs have been declining over the long term,” Gottheil writes in a report to clients released Thursday, “but the fall-off became steeper in 2008 and the bottom dropped out in 4Q08.”
The silver lining for Hewlett-Packard (HPQ), Dell (DELL) and Lenovo, writes Gottheil, is that customers didn’t stop buying computers. “In a dramatic and frightening economic crisis,” he writes, “unit volume was down only 5%. TBR believes this demonstrates the price‑elasticity of the PC market.”
Apple’s unit sales actually rose in the December quarter, although the rate of growth, 9% year-to-year, was considerably below the 44% recorded one year earlier. But unlike its competitors selling Windows PCs and netbooks, Apple’s average selling price has held remarkably steady, as you can see in an exclusive TBR chart — not included in Gottheil’s report — that breaks out ASP’s by manufacturer. We pasted it below:
“Apple’s a special case in that not only are its ASPs much higher than the others,” Gottheil explains, “but also they have been amazingly flat over the eight years of data that I have, while the others have showed a steady erosion. The differences have only gotten wider over the years.”
Apple’s ASPs did drop, however — 8.1% year-to-year, from $1,532 in 4Q07 to $1,408 in 4Q08. Gottheil attributes this decline to a change in product mix.
“When Apple introduced the new MacBook in October, it drove down ASPs in two ways: it introduced a new price entry point with the MacBook White, but more important, we think, was making the $1,299 MacBook so attractive that it shifted the mix between MacBooks and MacBook Pros.”
Gottheil is one of those analysts who believes Apple will eventually produce a netbook, despite Steve Jobs’ and Tim Cook’s disavowals. (For a well-reasoned contrary view, see here.)
And there is no question in his mind that if Mac sales drop far enough, Apple will eventually adjust its price points, one way or another.
“They can profitably produce Macs at lower prices,” he says. “Still high quality, just not as much horsepower.”