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Mac sales decline as customers pick up iPads instead, says Tim Cook

Mac sales dipped slightly in the fourth quarter, and while Apple CEO Tim Cook attributed part of the drop to iPad cannibalisation, supply constraints with the iMac also played a big role, he said.

Apple sold 4.1 million Macs during the quarter, which was down from the 5.2 million it sold during the same time period in 2011.

In a conference call with analysts, Cook said the decline is due to three main factors: iMac constraints, the fact that the 2012 fourth quarter was shorter than Q4 2011, and channel inventory.

Overall, iMac sales were down 700,000 year over year. Apple's revamped iMacs were released in late 2012, but there were "significant constraints" that prevented Cupertino from getting its new desktops to everyone who wanted them. "We believe our Mac sales would have been much higher absent those constraints," Cook said.

Meanwhile, Q4 2012 was 13 weeks long whereas there were 14 weeks during 4Q 2011. "Last year, in the average week, we sold 370,000 Macs," Cook said.

Finally, channel inventory was down by about 100,000 units without the iMac. "So, if you just take these three factors, they bridge more than the difference ... between this year's sales and last year's sales," Cook concluded.

Cook, however, also acknowledged that the PC market overall is "weak," with many customers likely picking up an iPad over the Mac.

"We sold 23 million iPads and we obviously could have sold more than this, because we could not build enough iPad minis to come into a demand balance," Cook said. "I am sure there was some cannibalization of Macs there."

Cook framed the cannibalisation issue an a "huge opportunity for us."

"Our base philosophy is to never fear cannibalization. If we do, somebody else will just cannibalize it and so we never fear it," Cook said. "We know that iPad will cannibalize some Macs; that doesn't worry us."

"On iPad in particular, we have the mother of all opportunities here, because the Windows market is much, much larger than the Mac market is," he continued. "I have said for two or three, actually three years now, I believe that ... the tablet market will be larger than the PC market at some point. And I still believe that. And you can see by the growth in tablets and the pressure on PCs that those lines are beginning to converge."

Cook, meanwhile, also downplayed reports that Apple cut iPhone production amidst weak demand.