Is Apple's (AAPL) 'Halo' Broken?
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Price: $166.90 --0%
Rating Summary:
39 Buy, 25 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 8 | New: 10
Rating Summary:
39 Buy, 25 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 8 | New: 10
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While Apple's (NASDAQ: AAPL) Mac sales once again outpaced PC sales in the June quarter, growth may be running out of steam Needham & Company analyst Charlie Wolf noted Monday.
In the June quarter, Mac shipments fell 8.3% which was less than the 11.2% drop in PC sales. Also, the decline in Mac sales in the worldwide home market was only half as large as the drop in PCs.
The overall drop in computer sales is most likely related to the emerging era of mobile computing, notes Wolf, which started with Apple's iPad introduction in April 2010. As an illustration, in the latest quarter the over 50 million tablet shipments were two-thirds as large as PC shipments. "Personal computers clearly reign as traditional productivity devices. But an increasing number of consumers who previously used the PC for so-called consumption activities are migrating to tablets. Arguably the biggest surprise to date has been the tablets’ rapid invasion of the commercial market. usinesses, education and non-profit institutions are discovering new ways to increase their productivity by substituting tablets for PCs on almost a daily basis."
Since 2005, Mac sales outgrew PC sales related to the "halo effect" as iPod users would become familiar with the Apple ecosystem. The alter release of the iPhone and iPad added to this. Widnows PC users also discovered increased productivity with Macs. However, recent shipment data suggest that the "superior productivity effect" may be having less of an impact on the purchasing decisions of Windows users, Wolf notes.
Over the years, Apple has introduced the "ultimate" desktop in the iMac and the "ultimate" notebook in the MacBook Air and MacBook Pro. However, the incremental improvements seem to have added little to the luster of the original models, the analyst notes. Also, we the firm believes the superiority of Macs over PCs continues, the shipment data suggest that Windows users’ motivation to switch may have diminished.
"Apple's challenge as we see it is to continue to introduce compelling new versions of iMacs and MacBooks," Wolf said. "But that’s a tall order given that the company has already introduced what in our view are virtually the “perfect” machines for the PC market."
Wolf maintained a Buy rating and $595 price target on Apple.
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $501.02 yesterday.
In the June quarter, Mac shipments fell 8.3% which was less than the 11.2% drop in PC sales. Also, the decline in Mac sales in the worldwide home market was only half as large as the drop in PCs.
The overall drop in computer sales is most likely related to the emerging era of mobile computing, notes Wolf, which started with Apple's iPad introduction in April 2010. As an illustration, in the latest quarter the over 50 million tablet shipments were two-thirds as large as PC shipments. "Personal computers clearly reign as traditional productivity devices. But an increasing number of consumers who previously used the PC for so-called consumption activities are migrating to tablets. Arguably the biggest surprise to date has been the tablets’ rapid invasion of the commercial market. usinesses, education and non-profit institutions are discovering new ways to increase their productivity by substituting tablets for PCs on almost a daily basis."
Since 2005, Mac sales outgrew PC sales related to the "halo effect" as iPod users would become familiar with the Apple ecosystem. The alter release of the iPhone and iPad added to this. Widnows PC users also discovered increased productivity with Macs. However, recent shipment data suggest that the "superior productivity effect" may be having less of an impact on the purchasing decisions of Windows users, Wolf notes.
Over the years, Apple has introduced the "ultimate" desktop in the iMac and the "ultimate" notebook in the MacBook Air and MacBook Pro. However, the incremental improvements seem to have added little to the luster of the original models, the analyst notes. Also, we the firm believes the superiority of Macs over PCs continues, the shipment data suggest that Windows users’ motivation to switch may have diminished.
"Apple's challenge as we see it is to continue to introduce compelling new versions of iMacs and MacBooks," Wolf said. "But that’s a tall order given that the company has already introduced what in our view are virtually the “perfect” machines for the PC market."
Wolf maintained a Buy rating and $595 price target on Apple.
For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.
Shares of Apple closed at $501.02 yesterday.
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