This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apple iPad Not Hurting Mac Sales

So far, Apple's popular iPad tablet does not appear to be cannibalizing the company's PC sales. Apple (AAPL - Get Report) recently announced that its share of the PC market hit 4.19% in the second quarter of 2010, up from 3.49% in the first quarter. Apple competes with other PC manufacturers like Dell (DELL) and HP (HPQ).

Apple's PC share gains came despite the April 3 launch of the iPad tablet computer. Considering Apple's robust PC market performance, it does not appear that many consumers are choosing iPads over Apple Macintosh notebook or desktop PCs. We believe this could be due to the halo effect that the ballyhooed iPad launch created around all Apple products, including Macs.

It remains to be seen whether iPad will become a cannibalistic threat to the Mac in the long term. Our analysis follows below.

Mac share forecast

According to management, Apple sold 3.47 million Macs in the second quarter of 2010, which is 18% more than the 2.94 million Macs sold in the first quarter. Worldwide PC shipments totalled 82.87 million in Q2 of 2010, down from 84.37 million in Q1, according to Gartner, a tech market research firm. Meanwhile, we expect Apple to sell around 10 million iPads in all of 2010.

We estimate that Macintosh PCs constitute 14% of the $337 Trefis price estimate for Appleâ¿¿s stock. We expect Mac notebooks to increase their market share from 5.04% in 2009 to 8.74% by the end of the Trefis forecast period. We expect Apple's desktop market share to increase from 2.69% in 2009 to 6.49% by 2016.

Based on Apple's PC market share gains in the second quarter of this year, when the iPad launch dominated media coverage of Apple, we see potential for Mac sales to increase even more rapidly than our current forecast. In the event that Apple's notebook share increases to 10% and its desktop share increases to 8% by 2016, there could be an upside of 2% to the $337 Trefis price estimate for Appleâ¿¿s stock.

You can drag the trend-lines in the charts below to create your own forecasts for Apple's notebook and desktop market shares, respectively, and see how they impact the company's stock price.

Halo effect?

Although the iPad may well be boosting Mac sales in the short term by stimulating consumer interest in all things Apple, we can't say whether this happy trend has long-term legs. In the past, the iPod exerted a similar halo effect on Mac sales. On the other hand, the iPhone cannibalized a significant portion of iPod sales.

In another article, we discussed the possible impact of iPad cannibalization on Mac sales.

You can see the complete $337 Trefis price estimate for Appleâ¿¿s stock here.

Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.
Trefis is a financial community structured around trends, forecasts and insights related to some of the most popular stocks in the U.S.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DELL $0.00 0.00%
AAPL $123.06 0.24%
HP $55.27 -0.66%
FB $94.03 -0.15%
GOOG $626.50 -0.12%

Markets

Chart of I:DJI
DOW 17,471.59 +31.00 0.18%
S&P 500 2,074.20 +6.56 0.32%
NASDAQ 5,040.2810 +0.5050 0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs