Apple's move to Intel processors and its development of Boot Camp could triple its market share in the home markets, according to Needham & Co analyst Charles Wolf. He describes the dual boot and Intel move as maybe: "Conjuring the magic that could double its market share."
Wolf notes his recent online survey of college students, which revealed a dramatic increase in the number of Macs Apple may potentially sell, but warns that these results may be biased because the "higher education market is one of the Mac's strongholds".
News source: Macworld UK
Windows on Mac is killer-blow
In response to these concerns, the analyst has committed further research across a sample of Windows users in the US home market. The results of this survey aren't as dramatic as the student research, but still supports an optimistic outlook for the company.
His report observes: "The Mac arguably offers a superior computing experience to Windows because of the tight integration of its hardware and operating system." Despite this, he warns that attracting Windows users in significant numbers has been stalled by "the inability to run Windows apps on a Mac". This is precisely what Boot Camp addresses, he adds.
Wolf reports: "The second survey indicates that the new ambidextrous Mac could possibly triple its share in the home market and almost double its share worldwide." He also anticipates a boost in sales as a result of the 'iPod halo'.
US home market share set to triple?
His second survey revealed that the likelihood of Windows users switching to Mac rose 8 per cent on the basis that Macs can run Windows. "An increase which would triple Apple's share in the home market and almost double its share worldwide," he said.
His report states that the potential switch rate among Windows users who have iPods is dramatically higher than that of those who don't. "The Mac's ability to run Windows gave the halo effect a terrific boost: the mean switch rate rose 12.6 percentage points to 20.2 per cent," he wrote.
iPod halo boosts results
"This was over nine percentage points higher than the mean switch rate among non-iPod owners. From Apple's perspective, the good news is that Windows users who owned iPods represented only 13 per cent of all Windows users in our survey. As this percentage increases, the iPod could play an increasingly important role in Apple's strategy to grow its market share."
The Windows home-user survey was conducted for Needham & Co by market researchers at Harris Interactive. The results depended on 1,600 useful responses. The Mac held a combined 4.2 per cent share in the US and European home markets in 2005. Wolf analysed the survey results to account for common consumer behaviour (for example, if 50 per cent of a sample group says it will do something then only half of that group actually will, Harris Interactive said).
Stage set for growth
As a result of his analysis, Wolf states that given the maarket share increase described: "The Mac's market share (in 2005) would have hypothetically increased to 12.2 per cent in these markets as a result of the 8 per cent share gain."
"Although seemingly small, this increase would have almost tripled the Mac's share in these markets and translated into a 75 per cent increase in total Mac shipments in 2005," he said. "The gain in the Mac's worldwide market share would have been more subdued (from 2.3 per cent to 4.0 per cent in 2005) because the US and European home markets represent only 20 per cent of worldwide PC shipments."
In a separate note, Wolf raised his assessment on Apple stock to 'Buy' from 'Hold', assigning a $90 price target on the stock. "The migration to the Mac resulting from its ability to run Windows is unlikely to kick in fully before 2008," he warned investors. "In the meantime, Apple's transition to Intel processors could cause customers to postpone purchases until this transition is completed in early 2007," he said.
