Neeham sees Macs capturing 8.3% PC share by 2016

Posted:
in General Discussion edited January 2014
Needham & Co.'s Charles Wolf has joined the ranks of several other Wall Street analysts who recently boosted their outlook on Apple Computer, raising his 12-month price target on the company's shares to $115.



Following a survey that measured the impact of the Mac's ability to run Windows applications on the switch rate of Windows users, the analyst in June upgraded shares of Apple to a buy rating with a price target of $90.



"Subsequent events, most importantly stronger than anticipated growth in Mac shipments in June and September, indicate that our interpretation of the survey results that triggered our upgrade was conservative," he told clients in a research note issued Thursday morning.



Wolf said his new price target of $115 is based on a" more realistic reading of the switch rates among Windows users" that should ensue from the Mac?s ability to run Windows applications through Boot Camp under the upcoming Leopard operating system.



"We effectively assumed that no Windows users would switch in the absence of the Mac?s ability to run Windows," the analyst said of his survey analysis back in June. "Even then, our $90 price target was almost 60 percent higher than Apple?s share price at the time."



Wolf told clients he had not expected Apple's stock price to reach his $90 target until the company introduced Mac OS 10.5 featuring Boot Camp in the spring of 2007, but acknowledged that two quarters of upside revenue and earnings surprises helped it achieve the milestone much faster than he could have predicted.



"A key reason for the upside was stronger than anticipated Mac sales," he wrote. "Evidence that Windows switchers played an important role in the growth of Mac sales even before the introduction of Boot Camp indicated that our previous assumption -- that no Windows users would switch to a Mac in the absence of its ability to run Windows -- was unrealistic."



Under the analyst's revised valuation model, he employs the actual mean switch rates of Windows users rather than the increase in the mean switch rates. He assumed that the only Windows users who switched were those in the U.S. and European home markets -- which represent about 20 percent of the worldwide PC market.



"Our forecast has Apple?s share of these two markets increasing dramatically -- from 9 percent in 2006 to over 40 percent in 2016," he told clients. "A significant portion of the increase results from our plausible assumption that once they switch, a high percentage of Windows users will stay with the Mac platform when they subsequently upgrade."



Still, Wolf noted that only a third of Mac sales are generated in the U.S. and European home markets, adding that it?s likely the Windows-on-Mac effect will invade other segments of the worldwide market, most notably education and the small and medium business markets.



"A more accurate measure, then, of the iPod halo and Windows-on-Mac phenomena is Apple?s share of the worldwide PC market," he wrote. "This increases more realistically from 3.5 percent in 2007 to 8.3 percent in 2016, the last year in our forecast."
«13456

Comments

  • Reply 1 of 101
    boogabooga Posts: 1,082member
    Buried in the article is the assertion that by 2016, Apple will have 40% of the US and European home markets. That's pretty huge, and means good things for software availability.
  • Reply 2 of 101
    When Apple is at $114.00 in 12 months, and 8.1 % share in 2016 analysts will bash the company mercilessly for missing projections and targets.



    This will drive the stock price down and fuel further rounds of pump and dump.
  • Reply 3 of 101
    An increase in Mac market share is to be welcomed. But a 5.5% increase over 10 years seems disappointing to me. I thought there was supposed to be a tipping point, where total Mac sales would accelerate exponentially as potential developers and buyers realised it was gaining popularity, and joined the party. Does this not come into the estimate at all?
  • Reply 4 of 101
    Based on the fact that MS and the PC platform have over ~95% of the market and that Apple has ~5% of the market, it can only go downhill for MS and the PC platform and uphill for Apple (well...it could go downhill for Apple but Apple has certainly made a comeback since Gil Amelio's departure.



    While MS and the PC platform are in their mature stage (or even declining stage) in terms of product life cycle, Apple is still in its infancy. Apple's products are still new...even though Apple is *the* oldest personal computer maker in history (started in the mid-70s and still ticking today)...and a lot of people are just now discovering Macs (even though they may have seen them in schools or had a quick glance at one at one time in their lives).



    Apple has all the chance in the world to grow. A part of me, however, hopes Apple will never try to grab more than 20% of the market.



    More market share means more developers. More developers means there will undoubtedly be a lot of crappy developers. More users means there will undoubtedly be people encourage the crappy developers by buying their products. Adware will surely be around the corner, etc.



    Apple will have to walk the fine line...enough market share to entice the good developers to develop for Mac but not enough to make the adware makers to switch.
  • Reply 5 of 101
    Quote:
    Originally Posted by Mobius


    An increase in Mac market share is to be welcomed. But a 5.5% increase over 10 years seems disappointing to me.



    Looks positive to me if you base it on the what I've said in my previous post.
  • Reply 6 of 101
    MacProMacPro Posts: 19,718member
    The assumption that a giant monolithic corporation is here for ever just isn't a safe bet.



    People confuse MS with PCs. PCs can run other OS such as Linux and I suspect they will more and more at corporate and government levels in the years to come.



    I have two names for MS to think about and there are many others.... TWA and PANAM.



    A Poor OS and Office ... that's about it. Easily replaced. That current 95% could be 0% by 2016. I am not saying Mac will replace that but along with Linux it could well be way higher than 8-9%.



    I can but hope
  • Reply 7 of 101
    Quote:
    Originally Posted by AppleInsider


    ... in the U.S. and European home markets ..."Our forecast has Apple?s share ...increasing dramatically -- from 9 percent in 2006 to over 40 percent in 2016,"



    now THAT is a headline-grabber. but i also think it's rubbish: anyone who thinks they can anticipate the changes in the computer market 10 years out is deluding himself.
  • Reply 8 of 101
    I would not put too much faith in a long term projection about market share. Who knows Linux might have 60% of the OS usage by 2016. For all we know VIA will control the CPU market and Nvidia will be gone by 2016! I consider this article garbage.



    Based on Apple's rejection to embrace new tech I don't see them growing fast until they redo their hardware restrictions. Let's not forget the Mac's are PC's therefore Apple needs to use the best hardware on the market and stop telling us what is good enough.
  • Reply 9 of 101
    It is so obvious that Apple will capture an 8.4% marketshare by 2016. Some of us "Apple fanbois" actually predict that we will get has high as 8.415%!!!



    Seriously, anyone who thinks they can predict what Apple's market share will be in 9 years with an accuracy better than, say, +/- 5% is so pretentious as to be unbelievable.



    Nine years ago, Apple was "beleaguered" under the jackboot of the Gil Amelio junta. Who can say where Apple will be nine years from now!?
  • Reply 10 of 101
    Make a few tweaks in the product line and I could see Apple at 10% my the end of 2007.
  • Reply 11 of 101
    gugygugy Posts: 794member
    Quote:
    Originally Posted by kim kap sol


    Based on the fact that MS and the PC platform have over ~95% of the market and that Apple has ~5% of the market, it can only go downhill for MS and the PC platform and uphill for Apple (well...it could go downhill for Apple but Apple has certainly made a comeback since Gil Amelio's departure.



    While MS and the PC platform are in their mature stage (or even declining stage) in terms of product life cycle, Apple is still in its infancy. Apple's products are still new...even though Apple is *the* oldest personal computer maker in history (started in the mid-70s and still ticking today)...and a lot of people are just now discovering Macs (even though they may have seen them in schools or had a quick glance at one at one time in their lives).



    Apple has all the chance in the world to grow. A part of me, however, hopes Apple will never try to grab more than 20% of the market.



    More market share means more developers. More developers means there will undoubtedly be a lot of crappy developers. More users means there will undoubtedly be people encourage the crappy developers by buying their products. Adware will surely be around the corner, etc.



    Apple will have to walk the fine line...enough market share to entice the good developers to develop for Mac but not enough to make the adware makers to switch.



    good post, but I do think 8.4% is too low for 10 years. Specially if Apple keeps introducing more breakthrough products. I would say at least 12 to 15% in 10 years. But I do agree with you. too much market share might not be the best thing for us consumers. I rather have Apple stay in this level so we can enjoy a better quality control for software and hardware and third part vendors as well.
  • Reply 12 of 101
    Apple has a 33% share in my home. Soon it will climb to 66% with a purchase of an iMac.



    I think the estimate is conservative. I know a lot of Windows folks having been in Windows-based development for 10 years, and more than a few are considering jumping ship, mainly due to my reasons why I like OS X more than Windows. I guess I've become a bit of an OS X evangelist in my group of friends.
  • Reply 13 of 101
    vinney57vinney57 Posts: 1,162member
    Quote:
    Originally Posted by Booga


    Buried in the article is the assertion that by 2016, Apple will have 40% of the US and European home markets. That's pretty huge, and means good things for software availability.



    That's the real prediction right there, and perfectly reasonable IMHO.
  • Reply 14 of 101
    eckingecking Posts: 1,588member
    In the new year macs will have 75% share in my home and probably a year or two after that 100%. Bootcamp has helped immensly and well as opera's mask as internet explorer believe it or not.



    Macs having 8.3% pc share by 2016 isn't so bad because less populated cities most likely don't have homes with multiple home computers anyways, it's the big urban centers that you already see macs in that you'll the numbers multiply. Apple would probably have to do something more to capture that market. But then again that's not a high profit market anyways.
  • Reply 15 of 101
    jeffdmjeffdm Posts: 12,951member
    Quote:
    Originally Posted by Mobius


    An increase in Mac market share is to be welcomed. But a 5.5% increase over 10 years seems disappointing to me. I thought there was supposed to be a tipping point, where total Mac sales would accelerate exponentially as potential developers and buyers realised it was gaining popularity, and joined the party. Does this not come into the estimate at all?



    Isn't that a figure for the worldwide market though? Apple has had less than 2% of the worldwide market for a long time, 8% would be a quadrupling.
  • Reply 16 of 101
    mactelmactel Posts: 1,275member
    Quote:
    Originally Posted by BenRoethig


    Make a few tweaks in the product line and I could see Apple at 10% my the end of 2007.



    They can barely keep up with demand now. Apple can't ramp-up production that quickly.
  • Reply 17 of 101
    The article: some schmuck just learned how to use a spreadsheet! For starters, claiming there were no switchers before boot camp and Intel is just stupid. I, and every Mac user I know in this neck of the woods, used Windows in the 90's and switched for OS X. Not one of us has bought non Apple machines since.



    And the comments: don't worry about Apple getting overwhelming market share folks. Apple make the mistake of not selling crap! To really dominate, you've got to go low low low. Bendy case, creaky key caps, last generation's processor dressed as lamb kind of low. The Mac, the Mac OS and all of us won't be dumped into Windows' current position because we're just not the same thing and Apple will always be like this.



    Apple just don't sell eWaste and don't duke it out at the low end. Never ever have done, even in the years while Jobs was away, and I frankly can't see them ever doing it.



    Adware and all of that crud you have to wade through with a hazmat suit when using Windows is a symptom of the key to Windows and the generic platform's success. Cheap people buy it and cheap people are willing to waste their hour trying to save the next cent. Even a top of the range hardware buyer who goes Windows has to put up with the consequences of this. There's a cultural difference to Apple's stuff and Apple's users. Anyone fancying a flame is first directed here to a nice post by John Gruber on the same point two years ago:



    http://daringfireball.net/2004/06/broken_windows
  • Reply 18 of 101
    So in the same article the guy explains that he could not make an accurate prediction in a 6 months timeframe, and then makes a 10 year prediction. Whaaaa?
  • Reply 19 of 101
    This guy is WAY off. It will be 10% by 2010.
  • Reply 20 of 101
    19841984 Posts: 955member
    Apple will have 16.7% marketshare by 2016. Now I am an analyst too.
Sign In or Register to comment.