Skip to comments.Mac sales projected to grow 26% in 2010, outpacing PC market
Posted on 12/03/2009 11:54:11 AM PST by Star Traveler
By Neil Hughes
Published: December 3, 2009 - 09:20 AM EST
Apple is predicted to continue its gains on the rest of the PC market in 2010, with Mac sales projected to grow by 26 percent while the industry is forecast to see a 16 percent year-over-year increase.
If the predictions of Robert Cihra, analyst with Caris & Company, prove true, it would give Apple a total 4 percent market share for the 2010 calendar year. Cihra goes into great detail on his analysis in a note issued to investors Thursday morning. Due to Apple controlling its own product cycles, as well as pricing, he believes Mac units will grow at a rate of 1.6 times faster than the entire PC market. On average, the Mac has outpaced the PC market as a whole by 1.8 times over the last 12 quarters.
With just a 4 percent projected total market share in 2010, the Mac still has "considerable headroom" for gains, Cihra said. He believes the company is still the single-best stock investors can buy in the PC market.
"As the most (in fact only) innovative, highest-value (hardware+software) and profitable PC vendor, we estimate Apple having earned a Mac [average selling price] of $1,289 in CY09, down 10% [year over year] but still representing a premium of 1.8x vs. its Wintel peers," the report said. "Even more meaningful, we estimate Apple Macs generating a gross profit-per-unit of nearly $340, which is 2-3x our estimate for its peers, keeping us focused on AAPL as the single best PC market investment."
Caris & Company reiterated its recommendation to buy AAPL stock, and has maintained a price target of $260.
The report also noted a "brutal" erosion of the PC average selling price in 2009, dropping an estimated 16 percent year over year. Portable machines alone were said to have dropped more than 20 percent in price, driven by the popularity of low-cost netbooks.
In this respect, major PC manufacturers like HP are finally catching up with a trend originally achieved by Apple way back in the second quarter of 2007: notebook prices are dropping below desktop prices, as portable machines have become the new "mainstream" PC. Cihra said the first quarter of 2009 was the first time that HP's notebook average selling price dropped below that of its desktops, nearly two years after they had flipped for Apple.
Cihra expects the overall PC market to increase between 15 and 20 percent in 2010, with his current forecast at 16 percent. The report said that signs of turnaround in the PC market are showing, though the economy remains the wildcard in forecasting PC sales for next year.
In September, Apple again significantly outpaced the rest of the PC market, growing 16.4 percent globally year over year, while the market as a whole grew 2.3 percent. Due to Apple's premium-priced products, the company has a worldwide revenue share of about 10 percent, while its market share hovers just north of 4 percent.
Apple has been projected to sell 2.9 million Macs for the final, fourth quarter of 2009. The company's September 2009 quarter proved to be its best ever, with sales of 3 million Macs helping the company's profits rise more than 46 percent.
I'd have to say it's three things.
I hereby name ALL Apple new articles regarding their amazing, stupendous, innovative, unstoppable, premium market growth.....
There I said it.
There I said it.
Ummmm..., I can always tell an imitation/imitator of Apple... they leave out the little "i".... LOL...
Markeshare doesn't necessarily equal profitability and value to the shareholders. Check out this chart of Apple vs. Microsoft since just after Jobs came back. The Apple chart includes two stock splits, the Microsoft chart one. The Microsoft stock is 34% lower, the Apple stock 600% higher.
They need compatibility with the apps. OSX is twice the OS of windows, the issue is compatibility with apps, and flexibility of platforms.
“Apple would have to sell 90 million copies every year, capturing 45% of the PC market.”
Just to break even, you mean, to keep up with the profits they are making now? Profit wise they are a niche company and will always be so with this strategy. What happens if Windows 7 reverses the trend and they start to feel the pinch? As it is they are dependent on Windows releases.
No, they are not.
OK, I’ll put on my former Silicon Valley engineer hat for a moment and ‘splain to you why, because it is the same reason why companies like cisco don’t allow you to run IOS on just any box with a conforming CPU and a bunch of ethernet interfaces:
There are two issues at work here. The first issue is one of gross and profit margins. The profit margin on software appears high (NB that word “appears”) but in fact software as a product is a relentless do-over and do-more. Because you need to have more and more software developers as your system becomes larger and carries around more legacy, you find that your assumptions (and MANY software startups make this assumption, BTW) about gross and profit margins on the software-only business go up in smoke as your headcount goes up with the system size and complexity.
Ah, but hardware... oh, that’s the gravy train man. Hardware engineers are much more productive than software engineers - the tooling, simulation and development aides for the HW guys are nothing short of marvelous. You don’t need to hire as many hardware guys these days to crank out a good hardware design - and once they’re done, their amount of “support” cost for the hardware alone is usually a very small fraction of the costs for the software side.
At outfits like cisco and Apple, hardware subsidizes the software side.
Next issue: the compatibility nightmares. When you control the WHOLE system, both hardware and software, things “just work” - because the engineering staff works together, and if the hardware guys do something that really complicates the software team’s lives, the software guys will wander over into the cube farm of hardware guys and say “Hey! WTF, huh? Gimme a break!” and the problem is fixed before the product ships.
Writing software to run on a generic off-the-shelf (OTS) hardware platform is about as much fun as hitting yourself in the head with a ball peen hammer — all you can think about is how good it’s gonna feel when you stop.
Concentrating on the total number of units shipped is a big mistake, one made over and over again in American management. It is why GM is where it is now, for example. They worried about retaining the “#1 in units shipped” position over obsessing about profits per unit sold. Look at where it got them. Same deal for newspapers, too. Given the amount of PC’s coming out of China, and the razor-thin margins that the Chinese are making, there’s no way to make a real profit competing with those guys.
*In 1997, Apple’s low was around $3.30 a share. Now it hovers around $200. *
The iPhone and the iPod are pretty much responsible for that.
Look, some people want a Rolls Royce and can afford one and some people just want a Honda. Both companies have done well for themselves at what they do but will never intrude on the others market. End of.
It’s vertical integration. The problem is can Macboys really justify paying twice as much to get something of lesser value? I know I can’t. From an economic standpoint, Macs are the cadillacs, and we all know how the big 3 did against smaller, cheaper and more fuel efficient vehicles.
Sure it might ‘just work’, but I’d rather not have to buy a new machine when it ‘just breaks’. It’s nice to be able to add the components that I want, and not rely 100 percent upon the largess of Jobs.
From my perspective, the answer is an easy “Yes.”
When I look back over my 20+ year career in computers, I can look at all the hours I’ve invested in fixing crap that shouldn’t have been broken in the first place. The two systems where I can honestly say I invested less time on crap I should not have been dealing with were the Mac and the other was VAX/VMS (another vertical integration of software and hardware, BTW).
Everything else, but most especially Windows and generic PC hardware, followed by several flavors of Unix, has been a huge time sink. These days, I merely multiply my last billing rate for consulting ($250/hour) by the number of hours I used to sink into Windows BS and Macs look very cheap.
“These days, I merely multiply my last billing rate for consulting ($250/hour) by the number of hours I used to sink into Windows BS and Macs look very cheap.”
So you sank about 2+ hours into it? That’s not bad. 2 hours of my time is about 40 bucks.
40 bucks vs 500 dollars? Easy decision. Course, if you were making 250 an hour, I think you can afford to buy a Cadillac as well.
It’s called the Mac 10, baby! 1200 rounds of .45 acp a minute. John Wayne used one in one of his last movies. In fact, it was practically the star of the movie.
No, the amount of time I’ve sunk into Windows nonsense over the years is much, much more than a couple of hours.
Especially before NTFS came along. FAT and FAT-32 are to filesystems design what bamboo & rope bridges are to civil engineering.
“That pancreatic cancer was cured a number of years ago”
Oh, I see it was cured but then somehow made its way to his liver. Thank you doctor, please tell me more...
Oh, I see it was cured but then somehow made its way to his liver. Thank you doctor, please tell me more...
No need to rush off and get that medical degree... just take a few remedial reading courses..., nothing else needed... LOL...
The information was already supplied from Apple and Steve Jobs and another reporter who was given access to the medical records, to review to write an article about it (by Steve Jobs) -- and it showed that he did not have pancreatic cancer (i.e., that it was cured).
As is typical with Apple and Steve Jobs, rumors always abound, but the actual hard news is also always available, too... :-)
In mid-2004, Jobs announced to his employees that he had been diagnosed with a cancerous tumor in his pancreas. The prognosis for pancreatic cancer is usually very grim; Jobs, however, stated that he had a rare, far less aggressive type known as islet cell neuroendocrine tumor. After initially resisting the idea of conventional medical intervention and embarking on a special diet to thwart the disease, Jobs underwent a pancreaticoduodenectomy (or "Whipple procedure") in July 2004 that appeared to successfully remove the tumor. Jobs apparently did not require nor receive chemotherapy or radiation therapy. During Jobs' absence, Timothy D. Cook, head of worldwide sales and operations at Apple, ran the company.
Steve Jobs, the charismatic chief executive who is the driving force behind both Apple Computer and Pixar Animation Studios, said Sunday he has undergone a successful operation to remove a cancerous tumor from his pancreas.
Jobs, 49, said in an e-mail to Apple employees that he will take the month of August off to recuperate, and expects to recover from the rare but treatable form of pancreatic cancer. He plans to return to work in September. "I have some personal news that I need to share with you, and I wanted you to hear it directly from me,'' Jobs said in the message, which he sent from his hospital bed. "I had a very rare form of pancreatic cancer called an islet cell neuroendocrine tumor, which represents about 1 percent of the total cases of pancreatic cancer diagnosed each year, and can be cured by surgical removal if diagnosed in time (mine was). I will not require any chemotherapy or radiation treatments.''
The New York Times published an article based on an off-the-record phone conversation with Jobs, noting that "while his health issues have amounted to a good deal more than 'a common bug,' they werent life-threatening and he doesnt have a recurrence of cancer."
A German study comparing the long-term effects of two variations of the Whipple procedure on 104 patients found an increase in diabetes and various degrees of gastric acid reflux, stomach ulcers, oily bowel movements, intolerance toward larger meals and aversion to certain foods. (Annals of Surgery, 2005)
Along with the digestive problems, patients often lose 5% to 10% of their body weight after the procedure. Weight stabilizes within the first year or two for the vast majority of patients, says Dr. Dilip Parekh, chief of tumor and endocrine surgery at the University of Southern California, who has performed more than 100 Whipple procedures. There is a small group of people who tend to have persistent problems with weight loss and loss of energy and you often you are not able to pinpoint why, he says. But if they stay active and manage their nutrition well, there is no reason for them not to live a normal life.
Jobs has never spoken publicly about what life is like after the Whipple, so we cant be sure that he has any of the post-operative problems associated with the procedure. But they would go long way toward explaining why he looked the way did on Monday. And none of them would indicate that his cancer has returned, or that his capacity for work is diminished. Post-operative guides for patients suggest that there will be lifestyle changes but that they need not be drastic. And a survey of patients at Johns Hopkins Hospital found that the overall quality of life of long-term survivors of the surgery is nearly comparable to that of healthy people.
And note that the chart shows sales in $ rather than units, which obviously helps Apple because of their high price.
“I’ve heard those kinds of comments for years now... LOL And yet, Apple keeps growing, keeps making more money, keeps on being successful and keeps grabbing more of that marketshare... “
LOL! That’s right “for years now” and they’re still a niche player.
LOL! Thats right for years now and theyre still a niche player.
It's much better to be growing 10%, 20%, 30% and so on... than it is to be 90% and going down, down, down, like Microsoft is... :-)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.