Morgan Stanley: 40% of college students plan to buy Macs

Posted:
in General Discussion edited January 2014
Apple's rapidly rising mindshare amongst current generation college students is setting the company up for an "aging phenomenon" that will spur further market share and revenue growth as those students enter the work force, investment bank Morgan Stanley said Wednesday.



A recent higher-education survey cited by analyst Katy Huberty reveals that roughly 40 percent of college students say their next computer purchase will be a Mac, well ahead of Apple's current 15 percent market share in the demographic.



In the near term, this sets the Cupertino-based Mac maker up for a strong September quarter -- a three-month period that embodies the heart of the back-to-school buying season, where incoming freshmen, existing undergraduates, and universities all plunk down considerable sums of cash in order to invest in computer hardware for the coming school year.



"Longer term," Huberty said, "we see an 'aging phenomenon' that will put Apple in a more mainstream market share position as students enter the work force, much like Linux adoption in the 1998-2003 time frame."



She noted that as the Linux platform matured and developers entered the workforce, enterprise-level Linux adoption accelerated eightfold, with 16 percent of servers shipped in 2003 running flavors of the linux operating systems compared to just 2 percent five years earlier.



For Apple, which holds just shy of 3 percent worldwide share of the personal computer market, each incremental percentage point of share gain means billions, Huberty said; approximately 6 billion in yearly revenues, and a full dollar in per share earnings for investors.



The analyst maintained her Overweight rating on shares of Apple, with a $185 per-share Base Case scenario that assumes Mac unit share rises to 3.5 percent from 2.9 percent in the next 12 months, and that consumers continue to buy up into the Mac product family, providing the company with some gross margin leverage.



Huberty also outline a $225 per-share Bull Case scenario which assumes twice the operating margin expansion of her Base Case scenario for the 2008 calendar year, driven by 40 percent revenue growth from broader demand for mobile products and greater success in the international and enterprise markets.







"Consumer demand presents largest downside risk to estimates," she said. "[The] rate of new product innovation must be sustained to justify strong double-digit revenue growth expectations."
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Comments

  • Reply 1 of 95
    surfratsurfrat Posts: 341member
    This is actually pretty good news.



    For what it's worth, I find this to ring extremely true amongst many of my higher education counterparts.
  • Reply 2 of 95
    palominepalomine Posts: 362member
    [QUOTE=AppleInsider;1234128]Apple's rapidly rising mindshare amongst current generation college students is setting the company up for an "aging phenomenon" that will spur further market share and revenue growth as those students enter the work force, investment bank Morgan Stanley said Wednesday.



    I knew this was coming! I knew it back in 1997! Apple's stock is the closest thing to bankable there is in this economy. It has been the best performer for both the 5 year and the 10 year stats!

    Yeah!

    Every time I turn on my PC I start yelling. I'm no wimp, I'm a general software enthusiast on both PC and Mac, but the PC has just got on my lasssst nerve.



    I'm telling family, no more computer help unless it's a Mac!
  • Reply 3 of 95
    SpamSandwichSpamSandwich Posts: 33,407member
    I used the Apple II in high school, then made a special trip to a local mall when the Macintosh was first introduced. I've been hooked on Apple ever since.
  • Reply 4 of 95
    dr_lhadr_lha Posts: 236member
    Its not just students, its faculty too. In my department we've gone in 4 years from being Windows/Linux based to almost 100% Mac for all new computer purchases. The Mac is becoming the defacto research machine in my field (astrophysics) and when I go to conferences well over 50% of laptops I see are Apple.



    Which makes Apple's f***ing up of X11 in Leopard all the more annoying.
  • Reply 5 of 95
    Yeah, all these percentages look great (and I am sure if you surveyed undergrads in the 1990s, you'd have found a qualitatively similar result), but when these folks hit the corporate world, a significant proportion will succumb to reality (in the form of "comfort factor" and "switching costs").
  • Reply 6 of 95
    mchumanmchuman Posts: 154member
    Quote:
    Originally Posted by anantksundaram View Post


    when these folks hit the corporate world, a significant proportion will succumb to reality (in the form of "comfort factor" and "switching costs").



    You mean like they'll realize after using macs for 4 years how uncomfortable PCs are, and lobby their boss to switch to macs? and those who start their own businesses will set things up with their favorite trusty mac? yes, I agree..it will be great.



    And I think in the 1990s everyone wanted a PC. I remember I graduated in 1995 and the thought of buying a mac was bizarre. We all wanted Dells, HPs, gateways, etc. There were no such thing as MP3s, youtube, or iTunes, and windows95 promised us all a better future.



    If I was 18 years old again today..seeing how macs run unix and yet also holding an iPhone in my hand with unlimited developer/creative potential.. wow..I can't imagine buying a PC. Times have really changed.
  • Reply 7 of 95
    MacProMacPro Posts: 19,718member
    Are the other 60% nuts?
  • Reply 8 of 95
    bjkbjk Posts: 34member
    The article headline sounded like something strait out of "The Onion."
  • Reply 9 of 95
    pehadepehade Posts: 7member
    Quote:
    Originally Posted by digitalclips View Post


    Are the other 60% nuts?



    ROFLMAO!



    That's what I was thinking, too
  • Reply 10 of 95
    danukdanuk Posts: 31member
    Quote:
    Originally Posted by BjK View Post


    The article headline sounded like something strait out of "The Onion."



    Haha! The Onion would say something like, "40% of college students waiting for MacBook style refresh to ditch their PCs." Maybe thats the AI-Onion hybrid sitein my mind!



    Anyone pause for thought this gone March 21st??
  • Reply 11 of 95
    buzdotsbuzdots Posts: 452member
    Quote:
    Originally Posted by anantksundaram View Post


    but when these folks hit the corporate world, a significant proportion will succumb to reality (in the form of "comfort factor" and "switching costs").



    Seems to me that this should be a wake up call to the software designers/manufactures to get their apps written for OSX or they may lose out big time.



    I have two daughters in college, one with a PC and one with a Mac, both grew up using Mac at home and PC's in high school. The one with the PC (university issued & supported) has begged me to let her trash the PC and get a Mac as soon as she graduates.



    IMHO, kids coming out of colleges & universities are going to put a heck of a lot of pressure on the future workplace to convert to Macs.
  • Reply 12 of 95
    zunxzunx Posts: 620member
    The guys at Redmond may be a bit nervous. The day Mac OS X reaches 25% worldwide market share, Windows will be wiped out from planet Earth in about three years. Windows is only maintained by ignorance and inertia.
  • Reply 13 of 95
    xtrmtrkxtrmtrk Posts: 21member
    I love Apple the company and the products and I really really want them to succeed (I still own AAPL I bought in 1981) but...



    Apple tried this in the 80's with the original Macintosh and it failed miserably. Remember Apple University? They had 100% coverage of some of America's biggest and best schools - Stanford, Michigan, Dartmouth, etc. And it got them NOWHERE. These students graduated and bought millions of cheaper PCs for their businesses.



    We all do lots of things in college that we leave behind on graduation.
  • Reply 14 of 95
    surfratsurfrat Posts: 341member
    Quote:
    Originally Posted by xtrmtrk View Post


    I love Apple the company and the products and I really really want them to succeed (I still own AAPL I bought in 1981) but...



    Apple tried this in the 80's with the original Macintosh and it failed miserably. Remember Apple University? They had 100% coverage of some of America's biggest and best schools - Stanford, Michigan, Dartmouth, etc. And it got them NOWHERE. These students graduated and bought millions of cheaper PCs for their businesses.



    We all do lots of things in college that we leave behind on graduation.







    You are so going to eat your words it's not even funny, and yet... I still find it hilarious.
  • Reply 15 of 95
    Quote:
    Originally Posted by xtrmtrk View Post


    I love Apple the company and the products and I really really want them to succeed (I still own AAPL I bought in 1981) but...



    Apple tried this in the 80's with the original Macintosh and it failed miserably. Remember Apple University? They had 100% coverage of some of America's biggest and best schools - Stanford, Michigan, Dartmouth, etc. And it got them NOWHERE. These students graduated and bought millions of cheaper PCs for their businesses.



    We all do lots of things in college that we leave behind on graduation.



    I do understand your point. I worked for an Apple Dealership here in N. Ireland during those times. We thought exactly the same thing.



    However, there is one fundamental difference between then and now. Price.



    The cost back then had an "Apple Tax". They really did cost a premium. Not so much these days. That is the real defining difference and why I believe the future to be much brighter now than it was back then.
  • Reply 16 of 95
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by digitalclips View Post


    Are the other 60% nuts?



    No - just middle class and lower-middle class.
  • Reply 17 of 95
    Quote:
    Originally Posted by xtrmtrk View Post


    I love Apple the company and the products and I really really want them to succeed (I still own AAPL I bought in 1981) but...



    Apple tried this in the 80's with the original Macintosh and it failed miserably. Remember Apple University? They had 100% coverage of some of America's biggest and best schools - Stanford, Michigan, Dartmouth, etc. And it got them NOWHERE. These students graduated and bought millions of cheaper PCs for their businesses.



    We all do lots of things in college that we leave behind on graduation.



    The difference is that today's Macs can run Windows. Plus there's that little consumer/business product known as "iPhone" out there today. Today is way different compared to 20 years ago.



    I studied and later worked at Cornell University from 1989 through 1998, and saw the Mac fall from 90% across campus to below 50% (free grants from Intel made huge inroads while directionless OS 8 ). They are now making strong progress thanks to OS X, and also the iPod Halo via students.



    BTW, one of the smart things I did take away after college was running my small business on Macs, now 10 years and running. Not one dime spent on tech support, very little tech repair or downtime, and never a problem dealing with clients on PC-based Wall Street thanks to Office compatibility.



    Long live the Mac! All hail Steve Jobs and the people at Apple!! Oh, and thanks Microsoft for Office
  • Reply 18 of 95
    Quote:
    Originally Posted by dr_lha View Post




    Which makes Apple's f***ing up of X11 in Leopard all the more annoying.



    I am using X11 under Leopard (10.5.2) and it looks fine to me. What is the issue(s) you are seeing?
  • Reply 19 of 95
    rot'napplerot'napple Posts: 1,839member
    Quote:
    Originally Posted by teckstud View Post


    No - just middle class and lower-middle class.



    Funny, I know a couple of families that between them, over the years since the mid '80s, had 10 Apple computers/laptops. And they are middle class. So your point being?! \
  • Reply 20 of 95
    cameronjcameronj Posts: 2,357member
    Quote:
    Originally Posted by AppleInsider View Post


    Apple's rapidly rising mindshare amongst current generation college students is setting the company up for an "aging phenomenon" that will spur further market share and revenue growth as those students enter the work force, investment bank Morgan Stanley said Wednesday.



    A recent higher-education survey cited by analyst Katy Huberty reveals that roughly 40 percent of college students say their next computer purchase will be a Mac, well ahead of Apple's current 15 percent market share in the demographic.



    In the near term, this sets the Cupertino-based Mac maker up for a strong September quarter -- a three-month period that embodies the heart of the back-to-school buying season, where incoming freshmen, existing undergraduates, and universities all plunk down considerable sums of cash in order to invest in computer hardware for the coming school year.



    "Longer term," Huberty said, "we see an 'aging phenomenon' that will put Apple in a more mainstream market share position as students enter the work force, much like Linux adoption in the 1998-2003 time frame."



    Funny thing about college students - they often don't know the value of a dollar Spending $1200 rather than $400 on a Dell might change their minds. Nevertheless good news, but trust me, 40% of college grads don't have that much money to spend on a computer these days.
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