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TMO Reports - Analyst: 'Boot Camp May Accelerate Mac Market Share Gains' [UPDATED]
by , 11:30 AM EDT, April 5th, 2006
Analysts with Piper Jaffray, UBS, and American Technology Research on Wednesday weighed in with positive reactions to Apple's release of a Beta version of Boot Camp, which enables the owners of Intel Macs to run Windows XP on their computers.
Piper Jaffray analyst Gene Munster said in his brief research note: "We believe Apple will gain share in the PC market in CY06 and Boot Camp may serve to accelerate these market share gains."
In reaction to the news, Mr. Munster said: "Many potential first time Mac users have been reluctant to make the move to Mac hardware, given the tie to the Mac OS. While the Mac OS is highly compatible with applications, the potential for an issue has led many buyers to stay with a Windows based PC. We believe Boot Camp erases this hurdle and will lead to continued market share gains for Macs in 2H CY06."
UBS analyst Ben Reitzes agreed, noting: "With 'Boot Camp' on Leopard, we believe AAPL could benefit from a significant OS upgrade cycle starting in its December quarter." He estimated that, as a result, Apple could see unit sales growth of 29% year-over-year (compared to the prior-year quarter) to 1.6 million during its first quarter of fiscal year 2007, and 29% growth during fiscal year 2007 to 6 million units sold. (Apple's 2007 fiscal year begins Oct. 1.)
Mr. Munster expects that just a point of market share gain for Apple will add around 15% to the company's EPS (earnings per share) during calendar year 2006. (Or, through Dec. 31, which is the end of the first quarter of Apple's 2007 fiscal year. Like many companies, Apple's fiscal year is different from the calendar year.)
Mr. Munster retained his "Outperform" rating on Apple's stock, with a US$103 price target. American Technology Research analyst Shaw Wu, saying that he thinks today's news "is Apple's 30th anniversary surprise," also reiterated his "Buy" rating on the stock in reaction to the Boot Camp Beta release. Mr. Reitzes reaffirmed his "Buy-2" rating on the stock.
While Mr. Wu didn't offer any thoughts on market share gains, he did say that Boot Camp "potentially could be a significant game changer. We believe a key reason why Apple has not gotten more 'switchers' is lack of strong Windows compatibility," he wrote. He added that he expects Windows Vista to also be supported on a Mac.
As The Mac Observer noted earlier this morning, Apple's shares were up significantly on the news. At 2:30 PM EST on Wednesday, they were up 8.47%, or $5.18, to $66.35. TMO will update readers on Apple's stock price at the close of trading, or if it makes another significant leap during the day.
If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.
2:47 PM EST, 4/5/06: Updated article with comments from Ben Reitzes and new information on Apple's stock price.
Observer Comments
Wed Apr 05, 2006 1:34 pm Subject: First things first Mr. Munster
OK, first things first. Before we can talk about Apple gaining market share vs. Windows PCs, Apple must first dominate boot loader market share vs. that hack those guys did a few weeks ago.
In fact, given the nature of Apple's protracted IP battles (e.g. vs. Apple Records), Apple may have an IP issue to deal with before it can claim victory against that hack. If I were the guy that invested $14,000 to have Windows boot on my Intel Mac, I'd be pretty litigious right now. The guy was probably looking at VC funding and quitting his day job to commercialize the invention he paid for.
Once again, Munster and Wu show themselves to be totally ignorant of real world market dynamics. When will you guys learn to evaluate their prognostications a bit more critically?
QuoteBosco wrote:
OK, first things first. Before we can talk about Apple gaining market share vs. Windows PCs, Apple must first dominate boot loader market share vs. that hack those guys did a few weeks ago.
In fact, given the nature of Apple's protracted IP battles (e.g. vs. Apple Records), Apple may have an IP issue to deal with before it can claim victory against that hack. If I were the guy that invested $14,000 to have Windows boot on my Intel Mac, I'd be pretty litigious right now. The guy was probably looking at VC funding and quitting his day job to commercialize the invention he paid for.
Once again, Munster and Wu show themselves to be totally ignorant of real world market dynamics. When will you guys learn to evaluate their prognostications a bit more critically?
I don't think Apple will have any trouble dominating "boot loader market share." Who wants an elegant solution from Apple when you can have a hack that take hours to set up, doesn't support graphics acceleration and can be broken very easily forcing you to start the process again (check MacWorld.com for a detailed analysis)?!
Secondly it was one guy who put up the prize, it was many interested parties. Sure one guy started it but he only put up $100 and asked others who were interested to follow suit. The procedure for the hack does not belong to that guy either. Get your facts straight.
Finally whilst these analysts forecasts are often rely on unsubstantiated rumour and are rather derivative, the two quoted in the article seem fairly reasonable at least initially.
BTW sorry for the double post. Didn't login the first time.
Wed Apr 05, 2006 2:57 pm Subject: When did they start
I wonder if Apple has been working on this for some time, before the hack. if Apple had OSX running on an Intel computer from the first version this Boot Camp may have been around since then and Apple was just waiting for the right time to release it.
QuoteBosco wrote:
OK, first things first. Before we can talk about Apple gaining market share vs. Windows PCs, Apple must first dominate boot loader market share vs. that hack those guys did a few weeks ago.
In fact, given the nature of Apple's protracted IP battles (e.g. vs. Apple Records), Apple may have an IP issue to deal with before it can claim victory against that hack. If I were the guy that invested $14,000 to have Windows boot on my Intel Mac, I'd be pretty litigious right now. The guy was probably looking at VC funding and quitting his day job to commercialize the invention he paid for.
Once again, Munster and Wu show themselves to be totally ignorant of real world market dynamics. When will you guys learn to evaluate their prognostications a bit more critically?
QuoteAl Swearengen wrote:
I wonder if Apple has been working on this for some time, before the hack. if Apple had OSX running on an Intel computer from the first version this Boot Camp may have been around since then and Apple was just waiting for the right time to release it.
You're quite right. Apple was simply waiting for a hack to materialize before it released Boot Camp. Happy coincidence with the 30th Anniversary. Almost wish it had come out the 1st everyone would have called an April Fool!
QuoteAl Swearengen wrote:
I wonder if Apple has been working on this for some time, before the hack. if Apple had OSX running on an Intel computer from the first version this Boot Camp may have been around since then and Apple was just waiting for the right time to release it.
Nope. Not true. A senior Apple engineer told me the other day that Intel did not give them enough information to boot Windows on the boards they desigend for them. When Apple inquired through official channels, Intel said there were hackers figuring it out and Apple should just ask them. Thank GOD for the hackers. If it wasn't for the hackers and open source, Apple probably wouldn't have been able to get Integer BASIC working on the Apple ][+ back in the day.
>CALL -936
>PRINT "H4X0R5 RU13!!"
QuoteGuest wrote:
Not correct. The apple solution is a totally different solution to the hack.
I´m going to claim that Boot Camp originated from the fact that MS took away EFI support i Vista, which means that Apple really wants to show of OS X besides Windows.
Based on the anatech analysis, I wonder why. Hopefully it doesn´t mean that Apple is dropping OS X
Whilst Apple's use of EFI compared to BIOS used by XP and Vista is a positive, the average user doesn't care! Allowing Intel Macs to run Windows placates those who wish to use Windows as well as attracting switchers to the platform who will feel reassured they are still backwards compatible with their existing software. Though of course we all know that having bough a Mac they'll see the light that is OS X and forget about their old Windows apps!
Wed Apr 05, 2006 6:50 pm Subject: re: [ no subject ?! ]
QuoteGuest wrote:
Not correct. The apple solution is a totally different solution to the hack.
I´m going to claim that Boot Camp originated from the fact that MS took away EFI support i Vista, which means that Apple really wants to show of OS X besides Windows.
Based on the anatech analysis, I wonder why. Hopefully it doesn´t mean that Apple is dropping OS X
There's no fear of Apple pulling OS X - it's now the lone technology that separates a Mac from a Windows box (well, that and EFI, but everyone else'll come around--they did with USB et al). If OS X disappeared, Apple would become an over-priced version of everything else.
"It's the OS, stupid" - however any of us feel about this move by Apple, it is not an indication of a purported demise for OS X - Apple's betting switchers will be more prone to compare for themselves. Apple's had an unusually long run of successful gambles lately; I hope they can keep up that streak.
QuoteBosco wrote:
A senior Apple engineer told me the other day that Intel did not give them enough information to boot Windows on the boards they desigend for them. When Apple inquired through official channels, Intel said there were hackers figuring it out and Apple should just ask them. Thank GOD for the hackers.
A senior Intel engineer told me the other day that Apple was given all the information it needed to make a robust EFI boot loader module for booting XP. Thank GOD for disciplined coders that actually know what they're doing.
Wed Apr 05, 2006 7:55 pm Subject: Just installed... my first review...
I just installed ButtCramp, and I love how when the computer starts up, the left of the screen looks like hell with a stern security warning in all caps, CRT green, and a button on the buttom that says "Boot into Windows". And on the right, it looks like Heaven, complete with blonde Danish women riding around on bicycles, and it has a throbbing Quartz "Play it Safe!" button to launch you into the Mac OS. Apple definitely knows how to do these things right!
Wed Apr 05, 2006 11:25 pm Subject:
You titled your posting "Major question", then went into a stream of conciousness rant that was very hard to follow. Please go and learn about punctuation, paragraphs and readable phrases and try again. At the very least, please read out what you write before you press the Submit button. It'll help. Really.
Too hard!
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