What happens when you lose the PC war? Quite simply you get trampled by your competition. Apple may still think of themselves as the small fish underdog compared to Microsoft but don’t let that fool you.

Quote:

Apple brought in $4.976 billion in revenue from the sale of 3.76 million Macs last quarter. Divide the $4.976 billion in revenue by 3.76 million Macs and you get an average selling price of $1,323.40.

A June 1st research note from Peter Misek of Jefferies & Company pegged Mac gross margins at 28%. Multiply $1,323.40 by .28 and Apple makes $370.55 for every Mac sold.

HP’s Personal Systems Group, the division at HP that sells PCs, brought in $9.415 billion in revenue and turned a profit of $533 million last quarter. Their operating margin, which doesn’t factor in overhead costs, was 5.66%. If we assume they spent 1% of their $9.415 billion in revenue — $94.15 million — on operations, then their profit margin was 6.66%. But let’s give them the benefit of the doubt and make it 8%.

The average selling price of a Mac increased 5.71% over the last two quarters. If we apply that growth rate to NPD’s data that says the ASP of a PC was $615 in November, then the ASP of a PC today is $650.12. Multiply that number by an 8% profit margin and HP makes $52.00 for every PC they sell.

An interesting bit of calculation by Matt Richman who works out that Apple makes more money selling a single Mac than HP does selling 7 PCs.

Link: A Consequence of Losing the PC Wars