Power Mac sales continue to fall as Apple grapples with weakness in its professional markets, admitted chief financial officer Fred Anderson last night.

The company shifted 158,000 units for $292 million in its first quarter 2003. The results are down from the 176,000 units shipped last quarter, or the 212,000 units shipped in the year-ago quarter.

Anderson blamed the poor sales on the "sluggish" economy and singled out Quark as a major software culprit in delaying professional user's upgrade cycles with the tardy release of XPress.

"One of our biggest challenges is to get Power Mac sales back up to 200,000 units per quarter at least," Anderson said. "The management has a number of plans going forward to enhance performance in the Power Mac area."

Admitting the weakness, Anderson sounded optimistic when he said: "We truly believe there's pent-up demand among creative professionals. We think the typical 24-36 month upgrade cycle has been elongated by the difficult economy."

The weakness in the market for pro desktop systems was mitigated by the company's notebook sales.

The value of PowerBook sales climbed $100 million in value following the release of the SuperDrive model, he said. The company shifted 101,000 units - it shifted 58,000 units in the last quarter, 116,000 units in the year-ago quarter. iBook sales remained steady - 186,000 shipped, though the dollar value of these sales fell slightly, reflecting recent price drops.

Apple sold 298,000 consumer desktops, including 134,000 flat-panel iMacs, 106,000 eMacs, and 58,000 older G3 iMacs during the quarter. The 17-inch iMac was the "most popular" model, Anderson said.

XServe sales were good - the company sold approximately 6,000 units during the quarter. Anderson revealed the company would introduce its Xserve RAID product early this calendar year.

US sales revenue fell 16 per cent sequentially, but rose five per cent year on year. 377,000 units shipped in the territory for $738 million revenue.

Anderson blamed falling Japanese sales on the weak economy there, but anticipated a spurt in PowerBook sales following the new models introduced last week.

European unit sales were down against the year-ago quarter, but significantly up on the last quarter. 202,000 Macs shipped this quarter, against 215,000 a year ago and 136,000 in the last quarter. Revenues climbed 42 per cent, sequentially to $351 million.

The company also reduced channel inventory levels to 4-5 weeks, and accounts receivable to 31 days in the quarter.