When the M1 chip was first introduced, it amazed everyone. Despite Apple’s recent shift from X86 to ARM, the software on the platform was not very compatible, causing many people to doubt it. However, because the ARM chip had excellent energy efficiency, it solved the most fatal standby battery life issue of laptops, allowing laptops to finally break free from the power cord. Coupled with Rosetta 2 translation as a fallback, it ensured basic compatibility. Most importantly, Macs with the M1 chip could outperform old Macs with Intel processors without a fan, offering super high value for performance. Top-notch battery life and an excellent ecosystem, combined with two, have brought Mac to its shining moment, with a significant increase in sales.
The Peak and the Fall
However, you could say that the M-series chips reached their peak from the beginning, and everything afterward has been a downturn. Apple’s subsequent release of the M2 and M3 series has already made people lose their sense of amazement; it’s merely a stack of parameters and data improvements. The decrease in market competitiveness is ultimately reflected in revenue.
In Apple’s financial report for the fourth quarter of 2023, Apple disclosed a key figure. In the fourth quarter, the revenue of the Mac business was only $7.6 billion, a 34% decrease compared to the same period last year, when it was $11.5 billion.
4 Reasons for the Revenue Decline
The question arises: why did Mac’s revenue experience an unexpected drop? Experts have pointed out four critical reasons, each of which is crucial.
1. The First Two Years Were Abnormal
For ordinary people, the lifespan of a Mac is quite long. It’s normal to use a MacBook for 7-8 years, and some people use them even longer, even until the battery swells—perhaps this is why Apple has never been willing to increase the RAM, always starting at a minimum of 8GB. It’s because of customers like us that they’re tired of it.
The drop in revenue for the Mac product line this year is mainly due to the abnormal growth in sales in the previous two years. Many existing users could have held on for a few more years, but when they saw the benefits of the transition from X86 to ARM, they chose to upgrade early.
I, myself, am using a MacBook with an M1 Pro chip and have no desire to upgrade. When performance reaches a certain level, what limits productivity is no longer performance but personal motivation.
2. Reduced Overall Computer Demand
If you carefully study Apple’s financial report for the fourth quarter, you’ll notice that only iPhone sales increased by 3%, while Mac sales fell by 34%, iPad sales fell by 10%, and wearable devices also fell by 3%. Services, on the other hand, increased by 16%.
In simple terms, within Apple’s hardware business, it seems that only the iPhone is growing. Macs, iPads, and other large-screen productivity-focused products have all experienced varying degrees of decline. So, what’s the reason?
It’s not just Apple on the decline; from sales statistics, the entire computer industry’s sales are shrinking this year. Clearly, because of the reduced demand for remote work and remote learning, the entire computer industry is not doing well, and consumer demand is disappearing.
When demand diminishes, prices become very affordable. And yet, Apple follows a high-price strategy. It’s strange that their revenue didn’t fall further.
3. MacOS Users Have Always Been a Niche
In the past, MacBook was not only the flagship of high-end laptops but also a representative product with dual systems. Many people, after buying a MacBook, would want to install Windows to make it easier for them.
However, since using the M-series chips, although Mac can use Rosetta 2 to translate X86 software, it has completely lost compatibility with the Windows system. Some specialized software, such as online banking, accounting, and industry-specific software, are not supported by macOS.
Speaking of something that enthusiastic Apple fans may not like to hear, macOS users have always been a niche market, targeting only IT and media industry users. If Apple doesn’t hurry up and improve its gaming ecosystem, its market share will continue to decline.
4. The Magical 8GB of Memory
As a side note, the MacBook Pro 14-inch version that was released not long ago still starts with 8GB of memory, and there’s even an “almost top-end” version with 8GB + 1TB, priced at 14,499 yuan.
It’s hard to believe that in 2023, when the PC camp is discussing whether 32GB + 1TB is enough, you can still find such a magical configuration as 8GB + 1TB. It’s truly a surprising choice.
I’m using the 16GB + 512GB version of the MacBook, and even with 16GB, when running software like Photoshop, Premiere Pro, or Final Cut Pro X, I often get “out of memory” warnings. In the media industry, this is the case; it’s even more critical for programmers who rely on memory for their work.
Moreover, Apple doesn’t allow users to upgrade their own memory and hard drive. Consumers have no DIY options, which leaves potential budget-conscious users out in the cold.
Conclusion
In conclusion, there are four reasons for the sharp drop in Mac computer sales, and the logic behind it is clear.
- The motivation for old users to upgrade has disappeared: M1 has already converted existing users, leaving limited room for growth.
- Reduced demand for computers: Demand for remote work has decreased, and the entire industry is shrinking.
- Fewer target users: M-series chips are not compatible with Windows, narrowing the target user base.
- Potential customers are reluctant to buy: Starting with 8GB of memory is too limiting, and there’s no support for expanding memory and storage.
FAQs
- Why did Apple’s Mac revenue decline by 34% in the fourth quarter of 2023? The sharp decline in Mac revenue can be attributed to a combination of factors, including abnormal sales growth in the two preceding years, a decrease in overall demand for computers due to changes in remote work and learning, Macs’ niche user base, and limitations in memory options, which made potential customers hesitant to buy.
- What were the key features that made the M1 chip a game-changer for Macs? The M1 chip brought energy efficiency, improved battery life, and solid performance to Macs. It allowed them to break free from the power cord, enhanced compatibility with Rosetta 2 translation, and outperformed older Intel processors, all while running quietly without a fan.
- How has the shift from X86 to ARM architecture affected Mac compatibility with software? While the shift to ARM with the M1 chip brought many advantages, it also led to compatibility issues with X86-based software. Macs could rely on Rosetta 2 for translation, but some specialized software, such as certain Windows applications, remained unsupported on macOS.
- What is the impact of reduced demand for computers on the tech industry? The entire tech industry, not just Apple, has experienced a reduction in sales, primarily due to decreased demand for computers. This decline can be attributed to changes in remote work and learning, which led to a shift in consumer preferences and requirements.
- Why are MacOS users considered a niche market, and what challenges does this pose for Apple’s market share? MacOS users have historically been a niche market, primarily appealing to IT and media industry professionals. The challenge for Apple is that it limits the broader consumer base and market share. Improvements in the gaming ecosystem and compatibility with Windows systems are essential to expanding their reach beyond this niche.
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