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Analyst: Vista to Have Short-term Negative Impact on Apple

Analyst: Vista to Have Short-term Negative Impact on Apple

by , 8:45 AM EST, February 14th, 2007

Although the lackluster sales of Microsoft's Windows Vista operating system are below resellers expectations, the number of PCs sold is on the rise. That increase is driven by the PC refresh cycle for Vista, and will likely have only a short term negative impact on Apple's Mac market share, according to Piper Jaffray analyst Gene Munster.

A survey of 50 Best Buy stores revealed that about 80 percent of the locations are selling fewer copies of Microsoft's new operating system than expected. 72 percent of the stores are also stating that Vista is driving sales of new PCs to consumers. The increase in PC sales is due to a pent up demand for computers with Windows Vista pre-installed.

That demand will likely have a short term negative effect on Mac market share in the March quarter, but also presents Apple with an opportunity to sway more users away from Windows. Mr. Munster commented "As PC buyers consider upgrading to Vista, which in many cases involves the purchase of a new computer, Apple is recognizing its opportunity to gain mind share with consumers. The company views this season of Vista-related computer purchases as an opportunity to sell more Macs."

Apple is also taking advantage of the fact that many PC users will have to purchase a new computer if they want to use Vista. The company launched an email campaign targeted at iPod owning Windows users titled Upgrading to Vista? Think Mac, and also produced several TV commercials in the U.S., U.K., and Japan that point out flaws in Vista.

The scheduled spring release of Mac OS X 10.5 (Leopard) will also help Apple rebound from the Vista induced drop in Mac sales. "Although many features of Vista are already available on Apple's current operating system, 10.4 Tiger, Apple is preparing 10.5 Leopard for a Spring release," he said. "With the release of Leopard, Mac market share will benefit from upward pressure from slight pent-up demand."

Mr. Munster is maintaining his "Outperform" rating and US$124 target price for Apple stock. Apple is currently trading in the pre-market at $84.63, down 0.13 (0.15%).

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.

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Close Name:Tommo_UK -   TMO Mac Specialist Posts: 23996 Joined: 16 Mar 2005
Wed Feb 14, 2007 10:37 am Subject:

I think you may be missing the point, with all due respect

Piper aren't saying Mac sales are going to slow. They're saying PC sales are going to see a short-term benefit from the Vista launch. That doesn't mean that Mac sales growth is going to decline. It means PC sales could get a boost as those who waited for Vista (ie. those who were never going to buy a Mac in the first place) finally do so.

Those who wanted to go Mac are going to go Mac anyway, and will do so irrespective of Vista. So I see no slowdown in Mac sales growth due to Vista, even while I DO agree that the increase in PC sales could see the Mac's market share fall slightly until the initial upgrade surge is over.

A pullback in Mac market share is NOT the same as a pullback in Mac sales growth, if the cause is an increase in PC sales without it being at the expense of Mac sales.

As far as I'm concerned, Piper's note has been misinterpreted and misreported on (surprise surprise). Piper is NOT getting negative on Mac sales. Piper is just pointing out that there could be a short-term negative impact on market share, not sales growth. That's completely different from being negative about Mac sales.


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Close Name:geoduck Posts: 1922 Joined: 30 Dec 2003
Wed Feb 14, 2007 10:38 am Subject: Short Term Impact until...

...users get it and try to live with Vista and its high requirements, and its Big Brother DRM, and the trouble with FPS games, and...

Seriously, they will sell a lot of copies of Vista installed on new systems, but it will underperform expectations for a long while. It's biggest competitor is XP. Flawed as it is, XP works and is in place now. I'm hearing from a lot of people who are saying 'why go through all the hassle of upgrading to an unknown that is pretty but at best works no better than XP.


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Close Name:pritchett1 Posts: 5 Joined: 02 Feb 2007
Wed Feb 14, 2007 11:07 am Subject: Negative Impact

While at the Graybar Showcase 2007 near the SeaTac airport last week, I had the opportunity to talk to a lot of non-Mac folks. They all said pretty much the same thing - they were going to consider moving to Macs, because they did not like how Microsoft was treating them with Vista.

I gave out a lot of business cards for macCompanion as a result of their interest in moving away from Microsoft.


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Close Name:Guest
Wed Feb 14, 2007 2:00 pm Subject: Speculation

If it's not based on facts but on analyst speculation, the article should not be titled "Vista to Have Short-term Negative Impact on Apple" but "Vista Possibly Might Could Have Short-term Negative Impact on Apple."


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Close Name:gslusher Posts: 2088 Joined: 13 Nov 2002
Wed Feb 14, 2007 10:38 pm Subject: Maybe

Quote
Guest wrote:
If it's not based on facts but on analyst speculation, the article should not be titled "Vista to Have Short-term Negative Impact on Apple" but "Vista Possibly Might Could Have Short-term Negative Impact on Apple."


You may possibly probably might be essentially partially semi-correct, at least in some potentially somewhat applicable sense, truth-wise.

These sound like the predictions of "pscyhics" and fortune cookies.


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