Monday, June 28, 2004 - Is Apple Losing Its Sheen? - Is Apple Losing Its Sheen? "Even as overall PC shipments grew 12% in 2003, Apple's computer shipments were flat for the year, according to research firm Fulcrum Global Partners. At the end of March, Apple dropped out of research firm IDC's top 10 list of world-wide computer makers for the first time ever. Apple's share of the global computer market has eroded across the home, business and government markets over the past year, dropping to 1.7% overall at the end of March, down from 1.8% in early 2003, says Gartner (though its share is up in the education market). And in the company's last fiscal quarter, Apple's computer sales were sequentially flat or down across all models, particularly for its flagship iMac desktops.
The trend lines are worrisome because, despite the success of the iPod, computers are still Apple's core business. The music players account for just 14% of overall Apple revenue while Macintosh computers make up most of the rest. What's more, the Macintosh is slightly more profitable for Apple than the iPod. Macintosh gross margins are 23%, according to Wall Street analysts. Gross margins for the iPod stand at 22% and are predicted to decline because of creeping competition in the music player market."

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