Apple iPod introducing Macintosh to new potential customers, may help Apple grow Mac market share

“The iPod family of digital music players has become seminal icons of consumer electronics, a status that Wall Street analysts believe has finally given Apple the means to preach beyond its small but fanatic customer base of Macintosh computer loyalists,” Benny Evangelista reports for The San Francisco Chronicle. “‘What’s interesting here is that the phenomenon of the iPod has really brought a lot of people into the Apple world,’ said Darcy Travlos, a senior vice president and mobile multimedia technology analyst for Caris & Co. of New York. ‘With people having experience using Apple (iTunes) software and going out into the retail stores and seeing the iMacs and PowerBooks, more people are becoming aware of the capabilities of Apple products. The iPod was really the item that got people to notice Apple again.'”

“When adjusted for stock splits and dividends over the 20 years the company has been publicly traded, Apple’s stock hit an all-time high of $72.10 in March 2000, just before the Internet bubble burst. With Apple approaching that all-time high, how much higher can it go? The run-up in the past two weeks was triggered by a bullish report by Piper Jaffray analyst Gene Munster, who projected Apple’s stock would hit $100 per share sometime in the next 12 months… ‘There’s something different going on here,’ said Munster, who does not own any Apple shares. ‘What’s going on at Apple is based on reality,'” Evangelista reports.

“Apple hasn’t quantified the halo effect the iPod and the iTunes Music Store have on computer sales. However, Peter Oppenheimer, Apple’s chief financial officer, has said between 40 and 50 percent of Macintosh computers sold in the stores are to first-time PC buyers or customers who are switching from Windows-based computers,” Evangelista reports. “A Piper Jaffray survey of 200 iPod users found that 7 percent were PC users who planned to buy a Mac within 12 months, while an additional 6 percent had already made the switch. Another 7 percent said they owned a Mac but planned to buy another.”

“Analysts who have been following the company say the halo effect should show up in Apple’s earnings for the current first quarter and into 2005…,” Evangelista reports. “Apple executives and the company’s ardent core of users have been able to preach only to the choir about how suitable Macintosh computers are as a digital entertainment hub, but the iPod is bringing in new customers who may not have even considered buying a Mac before, said Travlos of Caris & Co…. Apple has been hampered in the past by competitors that have sold computers that cost far less. Travlos said she believes the strong iPod sales are an indication that the consumer pendulum is swinging from cheap tech products to more high-quality technology… Nobody’s expecting Apple to suddenly displace giants like Dell at the top of the computer sales charts, but ‘if they can get up to 3 percent (market share), that would be huge,’ Travlos said.”

Full article here.

Related MacDailyNews articles:
Needham & Co reiterate ‘buy’ on Apple Computer, raise target price from $43 to $62 – November 24, 2004
Analyst: iPod ‘should spur sales of iMac, this is just the beginning of a ramp for Apple’ – November 23, 2004
Survey: 13% of iPod owners have switched, plan to switch to Mac from Windows within 12 months – November 22, 2004
PiperJaffray raises price target from $52 to $100 on Apple shares – November 22, 2004
Holy Halo Effect! Analyst predicts 100 million iPod sales by 2008 – Windows to Mac switchers coming? – November 24, 2004

37 Comments

  1. I believe the iPod halo effect to be over estimated. Virus or the frustration that it has caused to PC users is one of the biggest reasons for PC users to switch.
    A recent poll in “The Mirror” found that 31% of iPod abstaining buyers were waiting to have the feature that allow them to listen to radio and 42% wanted for the iPod to be able to record live concerts in stereo. There are some manufactures who are after this market.

  2. It’s not market share that counts but profitability.

    Only Dell and Apple are making a buck in the PC buisness.

    Dell because they happen to be the “favorite” right now. But their fame will go away just like IBM, Compaq and Gateway did.

    Meanwhile Apple will remain because they always out innovate everyone else.

  3. Sure the Halo effect is great. Problem is what happens afterwards? I’ve had a hell of a time with windows users who switch to Mac and get so frustrated by the experience. People know what they know. we have to start thinking beyond the switch now.

    We have to help people to stick with Mac!!

    What can we do to help with this? What have you done lately? Let’s share this advice and turn recent switchers into stickers!!

    Thanks ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  4. I don’t believe the “halo” effect to be overestimated. Many people frustrated by viruses, etc. may not have even considered a Mac until they used their iPod. I think the iPod has proven to be one powerful little ambassador.

    As for Windows users being frustrated, if they switch OSes, they should go buy a book on Panther and learn the basics that way. All of us had a learning curve when we switched to OS X, so unless Windows users are of a “slower” breed, they should be able to catch up like we did. Even after using Mac my whole life, OS X totally confused me at first. But now that I’ve gotten used to it, I can’t stand using OS 9 at work.

  5. I definitely think the Halo effect is overrated. I get way more FPS on my XBox than I do on my iMac G5. I don’t see how a game that looks better on console would cause people to buy a Mac. I got the iMac as an early Xmas gift because my Dell kept getting spyware from Kazaa. I think if the came out with Kazaa on Mac but with no spyware that would totally rock.

  6. HOW MANY TIMES HAVE MDN REPORTED ON THIS???

    TOO MANY I SAY.

    its not like PC users are going to read this site

    and its not like we mac users need more convincing.

  7. NOmsplayer… the only problem is DEVELOPERS..

    MS’s ‘product’ essentially is dominant because it has developer support.. and it has developer support because it’s dominant… erg..got it?

    market share doesn’t matter to shareholders one iota, yes, but customers need to know that they’re not invisible after choosing the Mac platform..

    that being said.. the developers for some Digital Animation App don’t give a shit how many banks use Macs… and the new Half Life 2? Those guys don’t give a shit how many businesses use Windows for Email/Word…. all they care about is the home installed base..

    So while the marketshare number does matter.. really what matters to developers is the installed base for their specific apps..

  8. Sorry Tyk,

    We preach them into a new system, a new platform as well, and then tell them if they need help the book section is over there? What happens when they see that there are 12 books on Mac and over 100 Windows platform books they have to walk past to get there.

    You can’t simply tell them they are on their own. You are a computer user and are excited (probably) to learn about computers and what they can do. I am too … but we aren’t the “norm”.

    Most people I know use Windows computers 8 hours a day. Then when they come home they want to check their email and browse a web page or two. Do they really want to go through the aggravation of learning a new platform in the process. They don’t enjoy using Windows but they understand it. Do they want to move away from something they’re comfortable with? You and I would answer “YES!!” to abandoning Microsoft completely but they probably wouldn’t.

    When you think about converting Windows users remember that the majority of them don’t care about their computer experience. Big surprise (read: sarcasm).

    For example: My mother could care less about Macs. Only with guidance and many “tech support calls” to her son did she finally become comfortable. It took her 6 months to get to the point where she now turns to her friends who complain about viruses and their PCs aren’t working and now says to them “gee, that’s never happened to my iMac?”

    We can switch them but if we don’t stay involved they’ll just as easily switch back!

    Just my 2�

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.