Merrill Lynch on Apple

Merrill Lynch said in a report today that it expects Apple to grab over 4 percent of the U.S. computer market share in 2005. "Tiger should help increase Apple's PC share," the investment firm said. Although past Mac OS updates have not boosted Apple's market share, "based on the features of Tiger and the halo effect from iPod, we think Apple's PC outlook is rosier this time." Merrill Lynch expects Mac OS X to run over ten million computers in the U.S this year. According to Gartner, Mac OS will run 2.4% of the worldwide PC installed base in 2005.

Mac mini could boost desktop share

The Mac mini could allow Apple's desktop share to catch up to its notebook share, Merrill Lynch says. Apple has 3.4% of the notebook market but just 1.7% of desktops. "We expect new Mac users will decide on lower cost desktops than notebooks as Apple attempts to convert Windows users. The new desktop weapon is the Mac mini, which provides a new low price point for the Mac line. The Mac mini takes the line to a new price point, which should be attractive to switchers and education." According to Gartner, new users accounted for 0.02% of Apple CPU sales in 1Q/05. "Apple is counting on new users to fuel share gains. We expect Apple’s computer hardware share to increase, as the new Mac mini will be available on a greater scale."

Tiger a strong seller

Merrill Lynch estimates first quarter Tiger sales of $84-100 million compared to $60 million for the
previous Panther. "The new Tiger operating system became available Friday evening. There
was a line of 100 Apple addicts at the store we visited."

iMac and eMac upgrades

"We expect iMac and eMac upgrades," the firm said in a report. Shipping times on Apple's website for iMac and eMac have increased from 1-2 days to 5-7 days, "which may presage new systems."

Merrill Lynch reiterated its Buy rating with a price objective of $51 per share. "In a growth sector lacking growth, we think investors will be attracted to Apple."

by MacNN Staff