Merrill Lynch says Boot Camp likely to increase Mac sales
Analysts for Merrill Lynch on Wednesday said Apple's new Boot Camp software should be an incremental positive in the near-term that will likely increase the company's total addressable market (TAM).
"The boot camp capability cannot be a negative, but the question is how much of an incremental impact it could have," analyst Rich Farmer wrote in a research note to clients. "We believe the incremental cost for an average user to run Windows XP on an Intel-based Mac is between $199-299 (XP home vs. professional)."
The analyst suspects most users wanting Windows will be price sensitive on hardware, and so far Apple has tended not to lead in low end price points. However, he notes the feature can be viewed as taking some of the risk out of a switch to Mac because the investment can be easily
repurposed to run Windows natively.
"Apple's (TAM) should increase, though we are not yet convinced it will increase by an amount
sufficient to dramatically change earnings power," Farmer wrote. "Our model suggests that for
every point of PC market share gained, Apple generates more than $2 billion in incremental revenue and $0.42 NOPAT/share, including attached peripherals."
NOPAT is lingo for Net Operating Profit After Tax, an estimate of what a company would earn if it didn't have any debt, equal to operating income times (1 minus the tax rate).
Farmer and Merrill Lynch maintain a "Neutral" rating on Apple shares.
"The boot camp capability cannot be a negative, but the question is how much of an incremental impact it could have," analyst Rich Farmer wrote in a research note to clients. "We believe the incremental cost for an average user to run Windows XP on an Intel-based Mac is between $199-299 (XP home vs. professional)."
The analyst suspects most users wanting Windows will be price sensitive on hardware, and so far Apple has tended not to lead in low end price points. However, he notes the feature can be viewed as taking some of the risk out of a switch to Mac because the investment can be easily
repurposed to run Windows natively.
"Apple's (TAM) should increase, though we are not yet convinced it will increase by an amount
sufficient to dramatically change earnings power," Farmer wrote. "Our model suggests that for
every point of PC market share gained, Apple generates more than $2 billion in incremental revenue and $0.42 NOPAT/share, including attached peripherals."
NOPAT is lingo for Net Operating Profit After Tax, an estimate of what a company would earn if it didn't have any debt, equal to operating income times (1 minus the tax rate).
Farmer and Merrill Lynch maintain a "Neutral" rating on Apple shares.
Comments
I think Merrill Lynch is really missing the market draw here, and the customer base targeted. Apple isn't going after the gamers so much as all those marketing/sales/executives that have wanted Apple machines or who simply go after whatever is perceived as "the best" at time of purchase. BootCamp simply erodes the risk/arguement against a PowerBook for these users (who will likely end up running XP nearly full time at work on their Apples).
Is it a huge market segment? No. But it's a lucrative one.
I really don't think the price issue is as great as it is thought to be.
While the iMacsales are atthe lmits of what Apple's partners can turn out, the Mini's sales remain ok, to fairly good.
One wouldn't think that it would be the case. Perhaps Apple should figure out a way to sneak a keyboard and mouse in for a nominal charge.
Of course, we don't know how many walk into the store, and walk out with nothing.
Originally posted by backtomac
At CNN they have a poll on whether boot camp would affect one 's decision to purchase a mac. With a little over 5000 resonses, 62% stick with windows, 26% consider switch, 12% already have have mac. FWIW.
26% not a bad target!
All this before leopard!
http://www.macrumors.com/pages/2006/...06081519.shtml
The ultimate UNIVERSAL computer has arrived!!!
Originally posted by TednDi
26% not a bad target!
All this before leopard!
Wohooo! That looks very very good for Apple, and it's shareholders like me!
Originally posted by backtomac
At CNN they have a poll on whether boot camp would affect one 's decision to purchase a mac. With a little over 5000 responses, 62% stick with windows, 26% consider switch, 12% already have have mac. FWIW.
Well, it sounds like an online poll, so I'd say its not worth the virtual paper its printed on.
Originally posted by Louzer
Well, it sounds like an online poll, so I'd say its not worth the virtual paper its printed on.
It was, therefore the FWIW(for what it's worth) disclaimer. I don't know if it's completely worthless though.
Originally posted by zunx
Expect the Mac market share to explode in the next few years because of Boot Camp and because of Parallels Workstation 2.1 which is even better because no reboot is required and you can have Mac, Linux and Windows open at once, switch between them and share files and folders:
http://www.macrumors.com/pages/2006/...06081519.shtml
The ultimate UNIVERSAL computer has arrived!!!
That sounds more like what I'd be looking for - a Virtual PC replacement. At the moment, I still have my old Windows laptop, which I connect to via Microsoft's free 'remote desktop' application. I'm thinking of selling the laptop for Virtual PC because 90% of what I use it for is testing websites and other simple apps.
On the other hand, my wife, who plays a lot of Windows-based games, will definiely appreciate Boot Camp (if I ever convince her to switch!)
This is all very good news.
Originally posted by Ireland
Wohooo! That looks very very good for Apple, and it's shareholders like me!
...and does a "neutral" rating mean people shouldn't buy shares which have shot up by 15% in the last 48 hours?
McDave