PJ on iPod \"halo effect\"

Research firm Piper Jaffray today said it believes Apple will gain share in the personal computer market over the next 2-3 years. Senior analyst Gene Munster attributes this potential to the iPod 'halo effect,' "continuous innovation leading to highly functional products at realistic price points," and security/performance issues for Windows-based PCs.

iPod is not "the only potential growth avenue"



Recent focus has been on quarterly iPod unit numbers and "Apple's domination in digital music is
a critical piece to the story." However, Munster says "we do not believe that iPod is the only potential
growth avenue for the company." Indirectly, the firm expects the iPod to be a foundation for growth in other parts of Apple's business. By the end of calendar 2005, "more than 30 million iPods will have shipped, providing Apple with a greater scope of awareness for various products." Put simply, the firm expects "the massive number of iPods that will populate the market over the next four to eight quarters will trigger interest in other non-iPod Apple products, most notably Mac notebooks and laptops."



2.3 to 3.5 percent market share in 2006



Current numbers assume an immaterial market share gain over the next eight quarters. The firm's current Mac unit estimates assume market share of 2.0% in 2004, moving up 0.3 percentage points to 2.3% in 2006 (based on overall PC unit shipment estimates from IDC). "We believe these estimates for Apple (Mac) share in the personal computer market will prove to be conservative." Although "it is difficult to anticipate the pace at which Apple can gain share in the personal computer market," the firm says "we have formulated a sensitivity analysis that looks at the impact to Apple's numbers based on various levels of PC market share." The firm concludes that a market share of 3.5% in 2006 is possible and "the incremental add to our existing EPS estimate would be $0.30, or 25%."

by MacNN Staff