Analyst: Incremental Mac Growth is Big Money

| Apple Stock Watch

Mac market share hit 2.6 percent in March, and analysts expect it will hit 2.7 percent for all of 2007. Even that incremental growth is good for Appleis bottom line, according to Piper Jaffray analyst Gene Munster. But should Apple manage to climb to 3.5 percent of the market, that small change would have a material impact on the companyis earnings.

"Street estimates currently assume Mac market share of 2.7 percent for calendar year 07," he said. "In our estimation, an increase in Mac market share to 3.5 percent for the year would lead to an upside to Street calendar year 07 EPS of US$0.44 or 12.3 percent."

The analyst consensus is that Apple will show an EPS of $3.61 for calendar year 2007 based on a 2.7 percent Mac market share. Should Apple manage to beat that mark and take 3.5 percent of the PC market, investors could be looking at an EPS of $4.05 instead.

Even if the Mac doesnit reach 3.5 percent this year, it should still continue to climb even with Microsoftis Windows Vista operating system in the wild.

Mr. Munster commented "Strong Mac sales in Appleis March quarter enabled the company to gain share despite stronger than normal PC sales. With Apple heading into three quarters of significant product releases (iPhone, Leopard, new iPod) and the education buying season, we expect year-over-year market share gains to continue."

Mr. Munster is maintaining his "Outperform" rating and $140 target price for Apple stock. Apple is currently trading in the pre-market at $100.04, up 0.24 (0.24%).

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