updated 10:15 am EDT, Thu April 6, 2006
Boot Camp expands audience
Merrill Lynch says that Apple's Boot Camp technology could expand the the company's potential market, but is not quite convinced it will lead to more sales. Analyst Richard Farmer told clients that the software may be incremental in the near-term in terms of 'total addressable market' (TAM): "The boot camp capability cannot be a negative, but the question is how much of an incremental impact it could have," Farmer wrote in a research note obtained by MacNN. "We believe the incremental cost for an average user to run Windows XP on an Intel-based Mac is between $199-299 (XP home v.s. professional)." While Boot Camp mitigates the switching risk by allowing users to run more familiar and required applications, Apple's higher-priced product line is targetted toward most Window users. Merill has a 'neutral' rating on Apple stock.
"Apple's (TAM) should increase, though we are not yet convinced it will increase by an amount sufficient to dramatically change earnings power," the analyst said. "Our model suggests that for every point of PC market share gained, Apple generates more than $2 billion in incremental revenue."