Apple's (NASDAQ: AAPL) fourth-quarter results solidified the growth story of the tech giant's two fastest-growing segments -- services and other products. Revenue from these two segments was up an impressive 34% and 36% year over year, respectively. But another one of Apple's product segments saw exceptionally strong double-digit growth during the quarter -- and it may surprise you. Apple's Mac revenue surged 25% year over year.
Here's a closer look at Apple's booming Mac business, and how Mac sales have rebounded sharply recently.
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The Mac's record year
While Apple's newer iPhone, iPad, and Apple Watch products may often get a lot of the attention. Investors would be mistaken to think the tech giant's Mac business isn't a driving force for Apple. Fiscal year 2017 was the Mac's best year ever, with Apple recording the highest annual Mac revenue in its history. And record-breaking revenue for Mac continued into the company's fiscal fourth quarter, when the segment recorded its highest-ever revenue for the September-ending period.
Apple's 25% year-over-year increase in Mac revenue in Q4 brought the segment's revenue for the period to $7.2 billion -- higher than Apple's iPad and "other products" segments but below services and iPhone revenue.
Apple's Mac unit sales were up 10% year over year in Q4.
Mac revenue during the quarter was driven primarily by "great demand" for Apple's refreshed MacBook Pro as well as a strong back-to-school season, Apple management explained in the company's fourth-quarter earnings call.
As Apple management was careful to point out, the strong quarter from Mac meant Apple gained market share during the quarter. Apple noted that while Mac unit sales increased 10% year over year, global PC shipments declined. Global PC shipments were down 3.6% year over year in Q3, according to Gartner.
Mac's market share gain in notebooks was particularly pronounced, coming at the expense of ASUS, Acer, Dell, and Lenovo, according to recent research by TrendForce.
Notably, however, not all major notebook manufacturers are losing market share to Apple. TrendForce data showed strong notebook sales from HP (NYSE: HPQ), too. HP's notebook shipments were up 17.6% year over year in Q3, according to TrendForce. When HP reports its quarterly results on Nov. 21, we'll have a better idea of how HP did. HP's fiscal third quarter, which ended July 31, saw notebook shipments increase 12% year over year.
But even after taking into account strong growth from HP in notebooks, TrendForce estimates the popularity of new MacBook Pro models helped Apple's global share in notebooks climb from 10% in the second calendar quarter of 2017 to 10.4% in the third calendar quarter of 2017.
While there are no guarantees, Apple looks poised to continue growing its Mac business meaningfully in the holiday quarter -- and possibly even gain more market share. Given its recent strong momentum with its MacBook Pro, and the likelihood of higher interest in Apple products in general over the holidays, Apple's market share gains will likely persist. In addition, Apple said in its third-quarter earnings call that it has seen exceptional strength in enterprise and education for its Mac products; these drivers could continue throughout this quarter.
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