PING!
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Posted on 11/07/2005 7:54:13 PM PST by Swordmaker
The momentum generated by Apple's iPod digital music players and related products continues to translate into new Macintosh sales according to one Wall Street analyst who estimates that over one million Windows users have purchased a Mac in the first three quarters of 2005.
In a research note released to clients on Monday, Needham & Co. analyst Charles Wolf said the number of Windows users purchasing a Mac appears to be far higher than the firm had previously anticipated.
"If we assume that all of the growth in Mac shipments during the past three quarters resulted from Windows users purchasing a Mac, then purchases by Windows users exceeded one million," the analyst said. "Indeed, the number of Windows users purchasing Macs in 2005 could easily exceed our forecast of 1.3 million switchers in 2006."
Needham had previously estimated that 500,000 Windows users would purchase a Mac in 2005, but says its model underestimated the number of Windows users the Mac could capture because it was limited to Windows users who had purchased an iPod.
According to checks with Apple Store Specialists, Wolf also said a larger than expected percentage of Windows to Mac converts appear to be purchasing Apple's higher-end systems and that their transition is fueled by the epidemic of viruses and malware on the Windows platform.
Meanwhile, the analyst believes Apple's redefinition of the music player market with the iPod shuffle, iPod nano and video iPod continues to distance the company from its competition.
"A year ago, there was a constant stream of 'iPod killer' stories. With the introductions of the nano and video iPod, Apple has left its competitors in the dust," Wolf wrote. "Sony is the only major name-brand competitor that appears to have a future in this market, although its product portfolio is now a generation behind the iPod nano and video iPod."
While Needham had previously forecast the that hard drive-based music players would take over the market due to their larger capacities and reduced costs, the firm says Apple's simultaneous introduction of the iPod nano and discontinuation of the iPod mini "changed all of that." Needham is now forecasting that high capacity flash players will represent the largest media category, outpacing hard disk players by a more than 2-to-1 ratio over the next several years.
However, sometime around 2007 the firm expects 1-inch hard drive players -- like the iPod mini -- to make a comeback as their capacities reach 20-gigabytes. At this time, the iPod’s share of the 1-inch hard drive segment should rebound, Wolf said. In the meantime, he believes 1.8-inch hard drive players will continue to play an important role because their high capacities are uniquely suited for video content.
Despite the Needham's positive comments on Apple, the firm on Monday downgraded shares of the company's stock to "Hold," saying it believes Apple shares are now "fully valued."
"We’re downgrading Apple from a buy to a hold because the company’s share price has reached our revised price target of $61," Wolf said. "During the past year, in response to the introduction of breakthrough new iPods and Macs and outstanding financial results, we’ve doubled our price target."
Still, the analyst hedges his bets, explaining Apple's "frenetic pace of innovation" could present new opportunities, which could trigger an upgrade at a price that’s much higher than it is today.
"New products and innovative strategies from Apple should keep coming. However, we can’t quantify them in our valuation model since we don’t know what they are," Wolf said. "The risks in our downgrade stem from what we don’t know as well as the possibility that Windows users are migrating to the Mac platform at a far higher rate than we’ve modeled."
PING!
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Count me in.
Me Toooo!
I have a huge Dell desktop in front of me and a Dell laptop, one is now a glorified music/DVD player and my laptop is unused. I really do like my macintosh better. I'm not suprised at the number of converts given the popularity of the ipod.
"...and let us further assume that said purchasers were all lefthanded Armenian dental hygienists..."
According to checks with Apple Store Specialists...
The plural of "anecdote" is not "data".
Jobs is pretty arrogant and not my model of a CEO. Gates is pretty delusional and not my ideal, either. But, for all the $ MS gets for its products, you'd expect them to be perfect by now. They're not. Far from it.
Dell delivers 150,000 PCs every day.
I agree with you on that. I have become very unhappy with some of their policies and OS's lately myself.
And those machines are absolute crap.
Really? I have an MSDN subscription but haven't used Vista yet. Just don't feel up to it I guess, getting burned out on "new" software. What don't you like about it?
Come on now. That's not true. I like my Dell's a lot. Which ones do you think aren't crap?
Do NOT bother to update to Vista. You will be astronished as to how bad it really is. It is NOT worth the aggrevation.
See. That's exactly why I've resisted installing it. I don't need another letdown. I like Win 2000 a lot. Win Xp is okay but can be unstable. I am not a big fan of Win 2003 either.
I like it, but is a little strange, almost like driving a car in London.
I find the biggest problem for 'switchers' is when something doesn't work they way they expect it to, they freeze for fear of messing it up worse.
That's actually damn near impossible to do. I haven't had a problem I couldn't fix by monkeying around with it, yet.
I want an Ipod with an incredible battery.
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