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Big Gains Predicted for Apple Market Share in 2010

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Investors should be seriously looking at putting more money into Apple (s aapl) stock, says one industry analyst. Robert Cihra of Caris & Company is predicting that Mac market share will grow by 26 percent in 2010, compared to only a 16 percent expansion in the general computing industry.

Cihra predicts in a new research report (PDF download, requires registration) that Apple will have a 4 percent overall market share in the year 2010, which is actually around what it has now, according to numbers released in September. Apple’s pricing and profit model, however, give it a 10 percent share of worldwide revenue. Despite not seeing growth in terms of overall market share, Cihra still thinks Apple is the best stock available in the personal computing market.

The report, as described by AppleInsider, sees Mac unit sales growing because of things like pricing and product line control:

Cihra goes into great detail on his analysis in a note issued to investors Thursday morning. Due to Apple controlling its own product cycles, as well as pricing, he believes Mac units will grow at a rate of 1.6 times faster than the entire PC market. On average, the Mac has outpaced the PC market as a whole by 1.8 times over the last 12 quarters.

In the report, Cihra also explains why Apple remains the best stock choice for investors interested in the computing sector:

As the most (in fact only) innovative, highest-value (hardware+software) and profitable PC vendor, we estimate Apple having earned a Mac [average selling price] of $1,289 in CY09, down 10% [year over year] but still representing a premium of 1.8x vs. its Wintel peers. Even more meaningful, we estimate Apple Macs generating a gross profit-per-unit of nearly $340, which is 2-3x our estimate for its peers, keeping us focused on AAPL as the single best PC market investment.

Apple’s success is due to a number of factors, but one in particular is the way in which it predicted the dominance of the notebook well before it had achieved that position with consumers. The price of Apple’s notebooks fell below those of its desktop offerings in around 2005, a full two years before the same thing happened at HP (s hpq), one of the largest PC manufacturers. Many consumers these days, if they have only one computer, choose a notebook because while performance has caught up to desktop machines, portability and battery life in laptop computers have made significant gains.

While Cihra doesn’t seem to mention it, if Apple does indeed release a tablet in 2010, and if it can price it reasonably, as recent evidence seems to suggest it will, there’s no telling what kind of gains we could see. If done well, Apple would essentially be creating a new market, which could provoke an uptick in its fortunes the likes of which we haven’t seen since the introduction of the iPod.

17 Responses to “Big Gains Predicted for Apple Market Share in 2010”

  1. I love all the Apple bashing! I bought my first one in ’88 or ’89 and it’s been fun to watch the Apple bashers be consistently wrong. I have a friend who works for Microsoft (his kids are only allowed Zunes – probably the only kids in his local school system with them!). A year after iTunes opened, he told me that it ‘wasn’t a sustainable business model’. Hah! 10 billion downloads – not too shabby!

  2. so it will be grow to 26%? im doing a case study on Apple as a TNC…through all the new gadgets i’ve seen Apple launch, 26% of market share is hard to believe. I was expecting…50%?

  3. Apple’s desktop profit comes from businesses and individuals buying more computing power than they need.. if you slap it in a flashy aluminum case and package it with a big, branded lcd.. you can charge 3-4x retail for every part in the system, without anyone asking questions. GENIUS.

    ..and I despise the way people treat Apple as innovators of technology.. At best, they’re innovative demographics and marketing specialists. They don’t invent things, they just give them catchy names and pretty packages.

    • you get what you pay for.

      if you drop 500 for a laptop…you get a $500 laptop which equals crap.

      you drop 1200 for a MAC laptop…you get a solid piece of technology that can actually hold up, and with their latest move to intel processors and nividia and amd processors.

      expect to see everything to get more punch, also with the release of ADOBE CS5 approaching, you’ll need a sturdy computer to take advantage of it, so expect to see its sales rocket in that aspect as well.

      you get what you pay for, and what you buy will either help progress technology of hinder it. Most PC’s are made at a crappy standard so “anyone” can afford. MAC are for serious people and people who want to be taken serious end of story……. this was typed on my consumer Toshiba Satellite >___<

  4. I am getting apple computer next year definitely. I used all pc and it’s crap. I broke it and i throw away so many of them and the screen is s**t. It’s big but blurry i can’t see small picture all fuzzy and broken. Especially the net book is horrible. And it’s so stuck inbetween browsing. So not worth it. It’s like i am living still 10 years back ruining my creativity instantly.

  5. i disagree. i am predicting a big hit for apple in either 2010 or 2011. it is not guesswork and i will be writing about it in the next few weeks. the good times may very well be over. iphone will slow big time, ipod is over and mac is lacking innovation….plus the tablet will fail.

    • Those are some pretty harsh words. Believe it or not, Apple is a very young company. Although it was started back in the late 70s, Jobs wasn’t able to run the company as he wanted to before getting pushed out of the company in the mid 80s. It wasn’t until 1997 (with the company months away from bankruptcy) when Jobs returned that he got the control he wanted.

      You can pretty much say that modern-day Apple is only 13 years old. On top of that they have become the most organized and most strategic company on the planet.

      In conclusion, you can say that Apple is somewhat playing catch-up. I don’t think that they’ve been around long enough to have their time to shine. So instead of a “big hit,” as you predicted, I think that the best is yet to come for Apple.

    • Paul, I think the 26 percent is referring to the amount of revenue Apple brings in on the sale of its products, while the lower, relative steady number refers to the percentage of overall computers sold.