Analyst: Apple formula working to lead Mac resurgence, Apple’s growth rate should accelerate in ‘07

Shares of Apple (up $4.54 to $79.07 rose over 6 percent in afternoon trading on Nasdaq. Shares of rivals Microsoft (down $0.32 to $28.20) and Dell (down $1.58 to $23.12) edged lower.

CNNMoney.com reports, “Piper Jaffray’s Gene Munster said in a note to clients reported by Reuters that Apple’s results show its ‘formula is working’ as the popularity of its iPods is translating into a ‘resurgence in the Mac platform. We believe in six months the halo effect will expand beyond a simple iPod-to-Mac correlation into a four-way relationship with iPod, Mac, iPhone, and iTV benefiting from each other’s success. If this plays out, Apple’s growth rate should accelerate in 2007.'”

Full article here.

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Jim Cramer: Apple’s quarter showed how poorly the also-rans are faring – October 19, 2006
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20 Comments

  1. Mark my words: Eventually the Mac will be the computer everyone uses at home. Windows will be that clumsy piece of crap you have to use at work. The only remaining hurdle is satisfying the gaming community, and big strides are being made in that area.

  2. I say that these guys still just do not get it. They see Apple growing and growing and have to give it some reason. Ahhhh, “the halo effect” yea thats it, thats the only reason.!!! “

    A better, nicer looking computer, better service, people who care, etc, etc. And MIcrosoft just goes around and around the toilet bowl. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    Oh well, maybe they will actually understand it all in retrospect. LOL ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

    N.

  3. [snort!]
    “If this plays out, Apple’s growth rate should accelerate in 2007.”

    This guy either did not attend Business School, or he didn’t pay attention in class. Sure, Apple will see a lot of “growth” in 2007, but that will not translate into an “accelerated growth rate” or to huge profits. iTS (I miss the ‘M’) will grow by adding more video and the like – but it’s hardly a high-profit niche. And the iPhone will have thousands of percent growth – from 0 to “lots”. The anticipated vPod will generate some sales – OK, very profitable sales – but I doubt the total iPod market will grow more than a dozen percentage points. Leaving the Mac. It is extremely unlikely that the Mac will continue to grow at its current rate. Apple would have to get its foot in the door with business desktops and world-wide sales for that to happen. That’s a lot to expect. Growth? Certainly. Double-digit growth in sales? Sure. Double-digit growth in market share? OK. Apple can do all the above with half the growth it saw this year. Unless they can crack those other markets, half is the best they can hope for.

  4. Yes the word is getting out, but there are still a lot of people who say Macs are too expensive, they prefer windows (had that conversation with someone at work just yesterday).

    But I believe Apple are the only ones change the way we uses computers and that will attract more and more users.

    Having more retailers sell macs is important, getting the message out even more and coming out with new cool gizmos.

    Apple could get 10 % PC share in the US by the end of 2007. More important is getting 5 % share world wide.

  5. “Apple could get 10 % PC share in the US by the end of 2007. More important is getting 5 % share world wide.”
    —–
    I believe this will happen, with or without the four way dealy outlined. Windows is losing mindshare – and that will accelerate. Macs will fill the vacuum. Easy.

  6. “Apple could get 10 % PC share in the US by the end of 2007. More important is getting 5 % share world wide.”
    —–
    I believe this will happen, with or without the four way dealy outlined. Windows is losing mindshare – and that will accelerate. Macs will fill the vacuum. Easy.

  7. “Apple could get 10 % PC share in the US by the end of 2007. More important is getting 5 % share world wide.”
    —–
    I believe this will happen, with or without the four way dealy outlined. Windows is losing mindshare – and that will accelerate. Macs will fill the vacuum. Easy.

  8. DLMeyer,
    Munster said iTV, not iTS. You do know what iTV is, don’t you?

    Apple will see accelerated growth and increased profits in both its FY2007 and CY2007.

    For the iPod as music player, the US market is only about 10% saturated today, and if all goes well for Apple, it possibly will be 15% saturated after Christmas. It’s still in DVR territory, and there’s a long way to go. (Internationally, there are pockets that are more saturated and pockets that are even less saturated.)

    Now, the music player market is evolving, and we won’t come close to 90% saturation for just a “music-only player” like we do for TVs and VCRs/DVD players. But Apple is evolving the music player into both the cell phone market (highly saturated but people buy new phones just about every other year) and the video player market (some saturation when including portable DVD players). So, many people who would not have bought a music-only player will now be willing to get a cell phone-music player, or get a music-video player. And many people will buy one in each category. So there is huge growth still to come – Microsoft may be make not know how to make great products, but don’t mistake Microsoft’s “belated” Zune entry as lacking foresight into the market opportunity.

    Back in the home, Apple will aim to sell at least one iTV into every household (110 million households in the US alone) and even more than one iTV, since most people have more than one TV. Getting video from the Internet/computer to the TV easily and conveniently has been the big obstacle in increasing content delivery over the Internet. If the iTV solves this problem, the demand is there. And the tie between the iTV and the iPod is very real – the H.264 video format via Quicktime/ iTunes. It will be most convenient for people to have files that can easily play in both, so if your one of the millions that have a video iPod, the iTV becomes the most convenient, and vice versa. And though a PC will work for iTV and iTunes, Apple will now intertwine the Mac-only iLife, so the creation of your own video or audio (podcasts) for the iPod/iTV will be easiest on the Mac.

    I agree that we can still write off the corporate computer market. But the consumer market is also huge (110 million households in the US, most with 1 computer already and adding to it). In a given year, US consumers (not businesses) will buy somewhere between 10-20 million computers; next year will likely be at the lower end as the cycles are aligned with the Y2K upgrade, except that Vista could cause more people to consider buying a new PC. And it’s in this discontinuity, that Apple aims to steal a good portion of those sales. (The analysis for the rest of the world is a bit different, but clearly the US, UK, and Japan are the largest consumer markets for computers – places where Apple has a presence.)

    I know the stock has already gone up 50% in the last couple of months, and many are scared to get in now. But Munster is right, the big money is still to be made, and Apple is primed to be the one to make it next year and even the next 3 to 5 years. Of course, Apple can make mistakes and screw it up, but the opportunity is very much there.

    Sorry for the length, but I just felt that your post needed a real rebuttal.

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