“Investors were cheering another strong quarterly performance by Apple Computer on Thursday, but it was the company’s astonishing growth in Mac sales that grabbed the Street’s attention,” Katie Dean reports for TheStreet.com. “Apple’s stock jumped 5.8% in recent trading, adding $4.33 to $78.86.”
“‘On the strength of the Mac’s forthcoming ability to run Windows applications, we thought 2007 would be a breakout year for Mac sales. We were wrong,’ wrote Needham’s Charlie Wolf in a Thursday note. ‘The breakout appears to be already occurring.’ Needham makes a market in Apple,” Dean reports. “‘Never in the history of the PC has a company been better positioned to both gain share and improve profitability,’ wrote a bullish Jonathan Hoopes for ThinkEquity Partners, which makes a market in the company. ‘Investors should … understand that Apple’s software holds the key to both share gain and margin expansion.'”
Dean reports, “Helped along by the back-to-school season, Apple’s Macintosh sales grew 30% to 1.6 million units, while sales of its market-leading iPod digital music player ballooned 35% to 8.7 million units during the quarter.”
“‘IDC and Gartner just released their numbers… Apple grew at four times the industry, which implies very strong share gains,’ says Chirag Vasavada, an investment analyst with T. Rowe Price, which holds Apple shares,” Dean reports. “Compared with a Hewlett-Packard PC and a Dell PC and a Gateway PC, Apple’s PC is ‘a differentiated product in an otherwise commodity market,’ Vasavada says. And by moving to Intel chips, customers still can run Windows, making the barriers to adoption lower, Vasavada says. In addition, unlike pure hardware vendors that ship their PCs with Windows, Apple does not have to pay a percentage to Microsoft each time a unit is shipped, Vasavada says. Apple machines can run Windows, but doesn’t sell Windows-based PCs. ‘They’ve changed the competitive landscape dramatically,’ he says.”
Dean reports, “‘Clearly more and more people are adopting Apple’s operating system,’ says Jim Grossman, an equity analyst with Thrivent Asset Management, which holds Apple shares. ‘People have started to see the advantage of a tightly integrated system. They’re changing their mind and buying Macs.’
“It’s an evolution that takes time, Grossman pointed out,” Dean reports. “‘We expect them to continue this solid share gain. This strategy is coming to fruition now and I think we’re going to see more of it next quarter, and for that matter, 2007,’ Grossman says.”
Full article here.
MacDailyNews Take: By Jobs, we think they’ve got it (finally)!
“Wait until Wall Street figures this one out.” – MacDailyNews Take, Wednesday, June 08, 2005
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