Analyst: Strong Mac Growth Driving Apple

by , 8:45 AM EDT, July 22nd, 2008

Apple operating income for its third quarter of 2008 proved to be the second highest in the company's history, and Technology Business Research analyst Ezra Gottheil thinks the Macintosh computer lineup deserves a substantial portion of the credit. Year-over-year revenue growth for Mac desktops and laptops topped 40 percent, and both have cleared the 40 percent growth mark for several consecutive quarters.

"Apple set new records for total PC and notebook revenues and unit sales," said analyst Ezra Gottheil. "Year-to-year revenue growth exceeded 40 percent for both notebooks and desktops, the fourth consecutive quarter of 40 percent-plus growth for notebooks and the third consecutive quarter for desktops."

A substantial number of the Macs sold through the company's retail channel are helping to drive up Apple's computer market share, too. "Apple's retail stores continue to drive Mac sales, with 44 percent year-to-year growth in unit sales, with more than one-half of the 476,000 Macs sold in retail stores going to customers who did not own an Apple PC," he said.

Looking forward, Apple may be in a strong position to grab even more of the computer market. Apple CFO Peter Oppenheimer dropped a hint during the company's quarterly earnings conference call that a "product transition" will happen during the September quarter, and Mr. Gottheil thinks that's code for a revamped laptop line.

"TBR believes Apple will refresh its notebooks with the latest Intel Centrino 2 processors, which will improve performance and increase battery life," he said. "We think the company will do more than update internals, however. In addition to a redesign, TBR believes Apple will add TV tuners and may introduce a larger screen MacBook."

He added that Apple will likely use quad-core processors in the redesigned MacBook Pro to help keep a clear differentiation between the pro and consumer laptops.

Mr. Gottheil expects that in the coming quarters interest in Apple's computers will likely continue to grow in both the personal and business sectors, the iPod will continue to be the most popular portable media player, and the iPhone will be a great success for the company. "There are very few clouds on Apple's horizon," he said.

Apple is currently trading in the pre-market at US$149.02, down 17.27 (-10.39%).

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