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Apple Macintosh Computers Likely To Gain Market Share

December 07, 2007

By Patrick Seitz
CNNMoney.com

Apple's Macintosh computers are poised to make sizable market share gains in the coming months, according to a research firm that tracks PC purchase intent.

ChangeWave Research says it sees continuing momentum for Apple's APPL Macs among both consumer and business customers.

ChangeWave recently conducted two surveys that gauged PC-buying plans over the next 90 days -- a period running from the holiday shopping season into first-quarter 2008. It polled members of its alliance, which includes technology and business executives with leading companies in select industries. Its members tend to be more tech-savvy and have higher disposable incomes than the general public.

The Rockville, Md.-based firm's poll results have proved prescient, predicting the rise in PC sales for Apple (AAPL) and Hewlett-Packard(HPQ) and the downturn for Dell (DELL) in recent years.

The latest ChangeWave consumer poll found that 29% of likely notebook and desktop PC buyers in the next 90 days are planning to get a Mac. That's higher than consumer purchase intent for HP laptops (21%), HP desktops (24%) and Dell laptops (28%). But Dell had higher demand for its desktops (31%).

The trend line is clearly up for Apple. Two years ago, 16% of likely notebook PC buyers and 11% of desktop PC buyers planned to buy Macs. Demand for Macs has risen steadily ever since. Analysts credit the "halo effect" from the company's popular iPod portable music players and iPhone smart phones. People that buy and like iPods and iPhones are inclined to try Macs.

Apple shares ended Friday at an all-time closing high of 194.30, up 129% for the year.

The appeal of Apple's computers has expanded beyond the base of Macintosh loyalists and into the general public, says Tobin Smith, founder of ChangeWave. "These are not just the Mac-heads who are buying," he said.

More consumers are buying Macs because they're turned off by PCs using Microsoft's (MSFT) Windows operating system, Smith says. Complaints about the latest version of Windows, called Vista, and positive reviews for the new Apple Mac OS, called Leopard, have fueled Mac sales, he says.

Nearly one-in-four respondents (24%) of the most recent poll, completed in early November, say that the release of the Leopard operating system makes them more likely to buy a Mac in the future.

A separate ChangeWave poll of corporate PC buyers found increasing demand for Apple as well. For companies planning to buy computers next quarter, 7% of laptop buyers and 6% of desktop buyers plan to get Macs. That's up from 4% of laptop buyers and 3% of desktop buyers two years ago. Windows PCs, led by those from HP and Dell, have a much stronger hold over the commercial market than the consumer market.

"Apple's growing and the numbers that they're growing at are impressive," said Richard Shim, an analyst with market researcher IDC. "But it's over a small base."

Mac sales are strongest in the U.S., which is a mature, affluent market that can afford the higher prices for Apple's computers.

Apple's U.S. market share was 6.9% in the third quarter, IDC says, up from 5.7% a year earlier. Mac sales are typically higher in the third quarter because of back-to-school and other education sales.

Its PC market share for all of 2006 was 4.7% in the U.S. and 2.5% worldwide, according to IDC.

Computers remain the main driver of Apple's business. Mac product sales accounted for 62% of Apple's revenue in its fiscal fourth quarter ended Sept. 29. It also brings in the lion's share of the profit.

"Apple as a company makes 10 times the gross margin on one laptop sale than they do on an iPod Nano," Smith said.

Apple has the highest satisfaction level for users among all computer makers. ChangeWave's latest survey found that 80% of Apple Mac customers are very satisfied with the product, followed by 61% for Dell and 57% for HP.

Apple benefits from the fact that it makes both the hardware and the software. That leads to a better user experience, Shim says. The Cupertino, Calif.-based company also gets points for its innovation and design, he says.

The latest ChangeWave surveys show HP weakening among consumers, but staying strong with corporate buyers. The latest poll results also find Dell stabilizing among consumers and showing an uptick in corporate buying for the first time in more than two years.

ChangeWave surveyed 3,872 alliance members for its consumer survey and 1,964 members for its corporate survey on PC purchasing plans.

CNNMoney.com