Mac Market Growth to Fuel Earnings
Mac Market Growth to Fuel Earnings
by , 8:50 AM EST, December 13th, 2006
Mac marketshare is expected to continue growing in 2007, and even a small increase will have a big impact on earnings, according to Piper Jaffray analyst Gene Munster. Completion of the transition to Intel processors, improved product availability, the growing Apple customer base, and the ability to run Windows on Macs will all act as catalysts for sales, helping to fuel Apple's bottom line.
Mr. Munster stated "We believe Mac market share can grow by 1 percent again in CY07, ending the year at around 4 percent, with an average for the year of 3.5 percent. In our estimation, an increase in Mac market share to 3.5 percent would lead to upside to Street CY07 EPS of $0.34 or 11.6 percent."
A 3.5 percent marketshare certainly would be good news for Mac users and Apple stock holders. The market consensus for Apple's 2007 marketshare, however, is at 2.7 percent.
Piper Jaffray is maintaining an "Outperform" rating for Apple stock with a target price of US$99. Apple is currently trading at $87.75, up 1.61 (1.87%) in the pre-market.
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.
Observer Comments
The market share numbers being booted around are deceiving, IMHO. If you adjust out the share of the market that Apple doesn't actively pursue, Apple's share goes up. The numbers to exclude are the bottom of the barrel computers that corporations purchase for clerks to interface with a mini-computer. Also cheapie PCs that are mainly sold as internet terminals.
In markets where people actually care about what computer they use, I think the Mac market share is much higher. For example, in a recent forum of Nikon D200 camera users, a discussion was held about dream computers for photographers. People roughly recommended the Macs (counting the entire line) 50/50 to high end windows systems. Not all the people recommending Macs had them, but considered them their dream computer.
Interestingly, the ability to run Windows was a plus to people thinking about switching. They didn't want to trash their existing investment in software.
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