Fortune: Apple's High Margin Approach Has Risks
Fortune: Apple's High Margin Approach Has Risks
by , 12:30 PM EDT, October 11th, 2007
Bernstein Research Analyst Toni Sacconaghi has found both strength and vulnerability in Apple's high margin sales approach, according to Fortune/CNNMoney on Thursday.
Mr. Sacconaghi noted that Apple's global PC market share has increased in 10 of the last 11 quarters. It is now 2.7 percent. Also, notebook sales have been particularly strong. They account for 47 percent of Apple's unit growth.
However, the analyst sees some risk for investors. Some may think that Apple has plenty of room to grow globally, but the problem is that if one breaks down Apple's penetration into price ranges, Apple already has significant market share in the highest ranges.
The net effect is that while Apple continues to obtain high margins in the high price ranges, the tactic is not so good for gaining market share.
"Accordingly,” Sacconaghi concluded, “we believe Apple faces a trade-off in its Mac business over the next 2-3 years: either lower price (and margin percentage) to sustain share gains, or retain its current price premiums and face slowing unit growth."
Recent Headlines - Updated January 29th
- Thu,11:09 AM
- FCC Says Hotels Can’t Block Personal Hotspots
- 9:27 AM
- Apple Remembers Remote Desktop Exists, Releases Yosemite Update
- 8:51 AM
- Pages 5: Using Borders and Rules
- Wed,7:40 PM
- ACM 291: Apple’s Massive Numbers and the Rosetta Stone for Apple Timing
- 5:30 PM
- One Way Apple Could Help Us Find Apple Pay Locations
- 3:47 PM
- Aaron Sorkin’s Steve Jobs Movie Starts Filming with Michael Fassbender as Jobs
- 2:45 PM
- Revogi Smart Color Bluetooth LED Bulb: $34.99
- 1:20 PM
- My Love/Hate Relationship with Apple’s Handoff and Continuity
- 1:17 PM
- TMO Daily Observations 2015-01-28: AAPL Q1 2015 Earnings, YouTube Dumps Flash
- 11:01 AM
- How to Restore Missing iPhoto Image Thumbnails
- 9:18 AM
- YouTube Puts Another Nail in Flash’s Coffin with HTML5 on the Desktop
- Tue,7:52 PM
- Apple Blocks Flash on the Mac Following Major Security Exploit
