Apple Moves Up In Computer Market

IDC iPod,

In the U.S., Apple owned the fourth sales spot for the second quarter, behind Dell, HP, and Gateway. IDC estimated that Apple sold 658,000 systems that quarter, while Gartner figured it as 663,000. According to both research firms' numbers, a year ago that fourth place was held by IBM, which has since sold its personal computer line to the Chinese-based Lenovo.

Not only has Apple moved up the ranks, Gartner and IDC said, but it displayed the biggest year-to-year jump of any major U.S. manufacturer. By Gartner's figures, Apple increased sales 33 percent over 2004 (IDC pegged it at 31.4 percent).

"The Mac mini as well as the visibility and appeal of Apple's music business, including the iPod line, has clearly benefited the company's PC business," said Gartner in a statement accompanying the second quarter projections.

Another analyst, Charles Wolf of Needham and Co., estimated that about 200,000 Windows users purchased Macs in each of the last two quarters. Part of that, he said, is due to the iPod effect, but another -- and he said it's impossible to separate the two, at least quantitatively -- is the perceived security of the Mac.

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"Clearly, others are buying [Macs] because of the virus epidemic on Windows PCs," Wolf said.

To come up with his numbers, Wolf modeled the last five years of Mac sales, then assumed that, as in years past, Mac sales would have stayed, at best, flat without what he calls the "switching phenomenon."

"Assuming that shipments would have been flat, it implies that 400,000 Windows users purchased Macs in the first half of this year,” he said. In late 2004, he had estimated that Apple would sell about 500,000 machines to Windows owners. "They're easily going to sell more than what I thought [during 2005]."

Next year looks even better. Needham's model assumes that approximately 11 percent of iPod-owning Windows users will purchase a Mac. With estimates of iPod-owning Microsoft users climbing to 24.2 million by the end of 2005, some 1.2 million should buy a Mac in 2006.

He thinks the trend could continue indefinitely, or as long as Windows users buy iPods and iPod accessories, and purchase music at the iTunes music store.

That's why he's bullish on Apple's stock, and has pegged its price target at $52.

"iPod and music sales have been captured in Apple's share price, but what doesn't seem to be captured is the switching phenomenon."

Even the shift to Intel won't damage Apple's sales, Wolf's certain, at least not in the long run. In fact, "if anything, it may end up being a positive, because it removes a perceived barrier for the Mac OS, that it doesn't run on Intel.

"The change to Intel may cause some disruption in the short term, but in the long, all it does is time-shift purchases. People that say, 'I'm going to wait until the Intel move' are still going to buy a Mac."

As of mid-morning Thursday, Apple's share price stood at $43.55, and was down 8 cents since trading opened.