UBS: Apple to ride rise of consumer tech, decline of corporate IT

“UBS’s Steve Milunovich today reiterates a Buy rating on shares of Apple, and a $125 price target, writing that the company should benefit from a turning of the tide in technology, whereby consumer purchasing, especially that driven by brand affinity, now matters more than traditional corporate IT purchasing that drove the PC cycle,” Tiernan Ray reports for Barron’s.

Selling computers to companies used to be the place to be. Corporations could afford and in fact required complex hardware, software, and services. Barriers to switching vendors were provided by operating system lock-in as well as system admin training. Technology often trickled down from the office to the home, extending Wintel’s domination and HP’s printer franchise… Consumer electronics becoming more attractive. Corporate vendors appear weaker with the cloud and open source reducing vendor lock-in. Customization, upon which IBM built large margins, is giving away to infrastructure standardization. Consumer technology has taken the lead in trends like mobility that are driven bottom up. Consumer markets are now larger. – UBS analyst Steve Milunovich

Read more in the full article here.

MacDailyNews Take:

The real problem for Mac and Linux is that many organizations have sold their souls to Microsoft by creating and/or using Windows-only programs and developing Internet Explorer-only web apps. Unfortunately many companies have so shackled themselves to Windows, they have no idea how to even begin to extricate themselves. Of course, since Macs can also run Windows, Apple has given them the ability to transition at their own pace if – and this is a very big “if,” as job security and staffing levels are a concern to the IT types – if they will accept Apple’s gift of freedom.

Note to CEOs: your IT department should not be making final hardware and software purchasing decisions. They should be supporting your company’s technology needs. You should get independent viewpoints (find people who recommend Macs and make them explain why) and retain the decision-making role for yourselves. Don’t settle for Windows-only shackles. A marked increase in productivity and reliability for your company is there for the taking. You can get Macs and seamlessly integrate them into your business – even if all you do at first is run Windows on them. You can explore Mac OS X and better ways of doing things according to your own timeline (hint: start by using Keynote instead of PowerPoint for your presentations and watch your audiences perk up). Just don’t expect your IT people to ever recommend Apple, as they may have ulterior motives for sticking with Microsoft.MacDailyNews Take, January 2, 2007

[Thanks to MacDailyNews Reader “Tayster” for the heads up.]


  1. I think a lot of people underestimate Apple’s penetration into the enterprise. I work in corporate IT and the last two places I’ve worked have been 95% Mac, with only a handful of HR and Finance people “needing” to work on PC. The only Windows machines I see in infrastructure anymore are Windows servers used as domain controllers for AD. Everything else is Linux for servers and Mac for end users. Every other person that I know that works in corporate IT has a similar set up at their company.

    1. I’m in IT also and our IT department prefers Mac and uses mostly Linux servers with the exception of a Wintel AD server since the business users still have a tendency to use PCs. That, however, changes as you move from hourly to more affluent salaried folks. Those people prefer Mac as well. I almost wish Apple could make a cheaper Mac for those folks who can’t afford a Mac. The lack of confidence from managers and directors that their hourly employees could transition to Mac is a hurdle, be it real or imaginary.

    2. Wall Street seems to think Microsoft is still dominating IT and it’s probably true. They’re obviously not making much money from selling Windows, Office and Surface Pros to consumers. Apple still appears to be a corporate joke to Wall Street.

  2. Hopeful but to become a serious contender for the business environment Apple need to get back into the server market with a serious software package and proper hardware its contradictory to expect macs to be adopted with backend Microsoft servers.

    1. There’s no real need for Apple to re-enter the server market. In the current age of virtualizing everything, you only really need one or two actual hardware servers, and then you can build as many virtual servers as you need for free.

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