Analyst: Apple could sell nearly a million Macs this quarter, growth would outpace Wintel PC market

“Apple Computer shares soared more than 11 percent Monday as Piper Jaffray analyst Gene Munster set a $100 price target on the company’s stock because of growing evidence that iPod sales are leading to more purchases of Apple’s Macintosh computers. Apple climbed $6.18 to close at $61.35 as investors reacted positively to the brokers’ views. With almost 46 million shares exchanged, the Cupertino, Calif.-based company’s stock was the fourth most active issue on the Nasdaq . Apple has averaged 9.9 million shares traded daily over the past three months,” Rex Crum reports for CBS MarketWatch. “Munster said he raised his price target because the iPod music player is showing a definite ‘halo effect,’ bringing in first-time Mac buyers. He added that a survey of 200 iPod users in the United States showed that 6 percent of former PC users bought a Mac after buying an iPod. Another 7 percent said they intended to buy a Mac within the next 12 months.”

“The analyst cut his total halo-effect estimate from 13 percent to 6.5 percent to account for error or bias among respondents who haven’t yet gone through with their Mac purchases. ‘At the end of the day, we think the numbers justify the iPod’s reality in driving Apple’s business,’ said Munster, who maintained his ‘outperform’ rating on Apple’s stock,” Crum reports. “The study included 154 people who were PC owners at the time they bought an iPod, with the remaining 46 being Mac owners. Munster’s survey also showed staggeringly high satisfaction with the iPod. Out of 200 respondents, 199 said they were ‘generally satisfied’ with the product. Munster’s $100 price target on Apple’s stock is nearly double his prior $52 goal. The last time Apple shares reached $100 was in intraday trading June 20, 2000, a day before Apple executed a 2-for-1 stock split.”

“Additionally, Fulcrum Global Partners analyst Robert Cihra raised his price target on Apple to $65 a share because of the strong demand for iPods and the new flat-panel iMac G5 desktop,” Crum reports. “Cihra of Fulcrum Global Partners echoed some of Munster’s comments in raising his price target on Apple to $65 from $53. The analyst said signs from Apple’s supply chain show the company is meeting market demands. Cihra increased estimates on iPod sales in Apple’s current quarter to 4 million from 2.9 million and added that the digital media player would account for 33 percent of the quarter’s revenue, up from 13 percent a year ago.”

“Cihra also raised his estimates on the quarter’s iMac shipments to 286,000 units, up 26 percent from a year ago, and said that improvements in notebook sales should help Apple’s total Mac sales reach 968,000 units in the quarter. Cihra’s numbers forecast that Apple’s Mac line will grow 17 percent from a year ago, while the broader PC market is expected to grow 11 percent,” Crum reports. “Should Cihra’s estimates hold, it will be the first time in 11 quarters that Mac shipments will have grown faster than those of the overall PC market.”

Full article here.

MacDailyNews Take: November 22, 2004 will not be remembered as a average day for Apple Computer, Inc. Today may represent the first substantial “real world” recognition that Apple Macintosh is again being embraced by consumers. It is a recognition that many Apple watchers have been discussing since anecdotal evidence first began trickling in; indeed, Apple themselves have been talking about the anecdotal evidence in various quarterly conference calls over the past year or so. That little “deck of cards” that holds thousands of songs in your pocket may be in the process of dealing out a Royal Flush to Apple’s bread and butter, the Macintosh. We wouldn’t advise getting too overheated with excitement; after all, Apple is highly dependent on consumers, creative markets, and education, so a bad economic turn for any one or combination of those markets could significantly impact Apple’s bottom line. However, this quarter is shaping up as a very, very strong one for Apple and they are getting very close to firing on all cylinders at this time. If the company can deliver iMac G5s, work towards a timely release of a PowerBook G5, and fulfill the promise of Mac OS X Tiger on or around Macworld in January, the sky’s the limit for Apple and the Mac platform – especially as the Wintel world’s dissatisfaction continues to grow with Window XP and its attendant spyware, adware, virus, and worm woes combined with the lack of enthusiasm for an oft-delayed, stripped-down Windows Longhorn that’s nowhere in sight.

25 Comments

  1. I personally don’t want to see Apple take a huge amount of market share, but they certainly have a good window of opportunity right now to grow by a healthy amount. I know I’m preaching to the choir here, but let me say it again:
    “Apple, advertise OS X!!! Advertise it’s stability and security! The whole Windows world is frustrated and scared about security issues, show why OS X is better!”

  2. What would you consider a good amount of marketshare? For me, I’d love 20%.

    If Apple had the commanding marketshare that M$ has right now, they’d be just as bad a monopoly.

    Okay, maybe 20-25%, but no more. Unless is 30%.

  3. can sell and can deliver are two different things.

    regardless of supply, if Apple can’t keep up with demand, holiday shoppers will look elsewhere.

    I HOPE HOPE HOPE Apple can make as much product as everyone wants.

  4. “If Apple had the commanding marketshare that M$ has right now, they’d be just as bad a monopoly. “

    No it wouldn’t. At least we would have a monopolizing entity with a panache for quality.

  5. I believe you, but what about the rest of the world? This halo effect is still very small in comparison… We’re still talking about only 6% that have gone through with the purchase. Couple that with the fact that general computer sales are multiple times that of iPod sales, and you realize that this is a relatively small number of converts. The only reason it’s promising is that Apple itself sells relatively few computers that this is actually a HUGE percentage increase for Apple, even if their market share isn’t going to drive up the wall…

    -Russell

  6. The BIG Question:
    If EVERYBODY suddenly decided they had to have a Macintosh tomorrow, how many units could Apple ship running flat-out? FreeScale is in the middle of a) a spin-off from Motorola and b) a transition to 90nm fabbed next generation PPC chips. IBM is improving, but a) struggling with yield at it’s 90nm fabs b) still dealing with heat issues on the 90nm process c) has yet to deliver on projected CPU speed.
    Apple missed the back to school market with the iMac G5 and had to stockpile G5 chips and ship initially by air to meet even the delayed launch of the iMac G5. The head of Engineering was just shown the door, reportedly because of G5 issues relating to laptops. Panther has slipped from a 4Q 2004 launch to a 1st half 2005 launch.
    Sure they are making bucketloads of money on the iPod, but one wonders how many people have been diverted from Macintosh hardware and software development attending to the little white mp3 player?
    The best design in the world is worthless if it’s not available for purchase. Say a big company like Ford or GM wanted to “switch” to the Mac and put in an order for desktops by the tens of thousands and servers by the hundreds. Could Apple deliver the goods without starving it regular channels? They are still unable to keep the retail channel full of iPods- that’s one big issue the retailers have detailed in their lawsuit: stocking the Apple Store at the expense of their resellers.
    I am glad to see Apple grow again, but wonder if they will be able to make the big leap out of the niche market that they have settled into the last couple of years. Steve Jobs savaged the production side of Apple when he came back- otherwise restructured the company to be able to profit in a very small market. Can he now manage to restructure the supply chain and production side of Apple to handle a large increase in demand for Macintosh computers? If the answer is no thenApple will be consigned to a “boutique” market for many years to come- regardless of buzz.

  7. Iggyb:
    “If Apple had the commanding marketshare that M$ has right now, they’d be just as bad a monopoly.”

    Here’s where you’re wrong. Apple *invented* the personal computer. Microsoft, piggybacked on IBM to gain a monopoly of OS sales and used that monopoly to leverage into other areas.

    MS never earned *any* of it’s success. It has never been creative because it’s never had to be. It’s just had to be good at leveraging a monopoly, advertising and marketing, being a very effective agressive bully, and outlawyering everyone else.

    Apple has had it’s share of ups and downs, and it’s never been a perfect company, but Apple has *never* been like Microsoft.

  8. Russsel:
    “We’re still talking about only 6% that have gone through with the purchase. Couple that with the fact that general computer sales are multiple times that of iPod sales, and you realize that this is a relatively small number of converts.”

    You make a good point, but have you by any chance seen the accelerated curve of iPod sales from the start? They will sell over 4 million in this quarter alone, and probably over 6 million. Last year they sold out in the island of Great Britain, and sold even MORE iPods in the quarter following the holidays.

    Apple has seen fit to view iPods as their entire marketing strategy for consumer Macs for a good reason, remember the start of the year when they compared the iPod to the first Mac commercial in their revamped SuperBowl ad?

    Keep in mind that the iPod is still relatively at the beginning of its life cycle. Even dominating the market, and the mindshare of consumers, it’s got room for growth, and if the rumored flashed based iPod comes out next year, what will anyone be able to do to compete? The only thing they don’t already have is an integrated voice recorder (those cost an extra $30), line in, a radio and WMA support (and really no one really cares about this). Go on the file sharing networks and see how much love for WMA is out there (and it’s built into Windows).

    I still think Apples next big step is to find a compelling way to integrate their computers with TVs completing the integration between computers and home entertainment. That’s a very big market, and Apple with the right solution could move a ton of boxes.

  9. Apple will not get 20% market share. In 2003 Dell only had 31%. No one PC vendor has huge market share other than Dell and HP.

    http://www3.gartner.com/5_about/press_releases/pr16july2003d.jsp

    People confuse OS market share with PC market share because indirectly Apple is competing on both fronts. If Apple could reach %5 market share that would be great but would be very hard to hit. Apple’s focus HAS to be about profitability, because they know no one vendor will ever control a majority of PC sales. There OS is far better, but can not compete in market share with Windows with only one computer manufacture.

    Apple needs only to focus on the goal of growing their profit and keeping up a quality product that keeps people coming back. The roughest area for Apple is developers because developers don’t car about what PC runs their program as long the OS is running in lots of computers. That is the hardest part for Apple, but luckily they have been adding developers which is really just as nice to hear about as increasing market share.

    Matthew

  10. twilightmoon u missed the mark. That�s exactly what Apple is doing,. The imac is a TV , a 20� TV, with built in DVD burner that can be mounted on a wall, and is a full G5 computer. Apple I believe is going to enter the same lcd TV market that gateway is into, but with a imac. The LCD size will increase, and I believe at some point Apple with market is as so. Like the ipod they wont integrate they will try to take that market buy sneaking up on it, until they produce competitive LCD sizes. Then it�s a sure win, what LCD TV can beat a imac at the same size LCD? I believe this because they converted to the new DVD standard immediately. Something a electronic company has to do, but not a computer company, And take s a lot of money. Especially if you plan to make the future of DVD quicktime and were working with major movie companies on a imovie storeJ, and copy protected. I would never underestimate jobs ability to make something futuristic, concrete and done. I usually fine my self thinking , �What is he up to?� But he will never release something that does not work, its his history. Mark my works Jobs is going for he movie market right now, as MS trys to gain share in the music market. The ipod could easly be a tivo to the imac, carrying copy protected movies from imovie to imovie threw an online store to other imacs.
    This area is a done deal in my opinion, but he wont release it, like itune unless he has all the major players signed (MGM, etc). Watch the next 3 years will define Apple as a sony like company, but without the mistakes. Apple and MS will be 50/50 in 7-10, Id buy stock. Your talking about the guy the is a good programmer, and envisioned beyond what we use on are desktops right now. Jobs wanted voice activated pc by 2000 in his Macintosh plan, before he was kicked out. Gates said the internet and the hard drive was a trend. Jobs is not a stupid man. Think about it OS X would have been created in 1986 (next computer), but the board of directors for apple would�nt listen to him. 10 years after he came up with it were starting seeing it. This is not a dumb man, and I would say the most dangerous man in power, in the computing industry today. Gates has no chance against this guy. The really funny thing I�ve learned about jobs , by reading about his live, is he really doesn�t care or want power, or market share. He genuinely just wants to complete his philosophy on combining a digital device and a human beings. But it has to work, or he wont do it. He really believes there�s a perfect device. MS needs a new owner with vision to take on this new threat

  11. I would like to see Apple get back into double digits for market share. That would be doing insanely great. Not over 20 percent though or the problems of being top dog will start to kick in. Macs are special.

  12. In the full article, there’s a link to an audio interview with the analyst Gene Munster. He’s got a sexy voice, I’ve gotta say! ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    Finally, a voice of reason and logic.

  13. 200 is not a representative sample, a 100+ would make me feel a little better (more solid) about the numbers. Still, very good news if it carries to the larger population of iPod owners!

    Even though my switch is over: ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

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