Analyst: Apple’s ‘impressive’ growth sustainable

Apple on Tuesday posted over $3 billion in profit for its fiscal third quarter and also reported good sales numbers for many of its core products. According to one Wall Street analyst, that growth could be sustainable for the company.

“While Apple had yet another stellar quarter, investors will wonder if the pace of growth is sustainable,” Piper Jaffray Senior Research Analyst, Gene Munster, said in a note to clients on Wednesday. “We believe it is, given Apple has small market share in large, growing markets.”

For the quarter, Apple set a Mac sales record of 3.47 million units, representing a 33 percent increase over the year-ago quarter. The company also sold 8.4 iPhones, a 61 percent increase over last year’s third quater.

“While many investors have been concerned that iPad would cannibalize Mac sales, we are seeing no signs of cannibalization,” said Munster. “In fact, the halo effect of Apple’s growing device user base (iPhone, iPad, and iPod touch) appears to be driving Mac sales, particularly internationally.”

Apple sold 3.27 million iPads during the quarter. Since it was the first quarter of sales for that device, there are no historial numbers for comparison.

http://mangochut.net mangochutney

“We believe it is, given Apple has small market share in large, growing markets.”
— Two of which Apple has basically created themselves.

Gene Munster is one of the few analysts out there, who seems to get Apple, IMO.

Apart from things like an impeccably streamlined supply chain or a strong and well communicated corporate culture, Apple has two qualities that few other companies have (to this extent):

1. Apple is innovation-driven: They constantly invest in new technologies and set the mark for quality in consumer products higher every year. Most prominent example: The netbook debate. When everyone expected Apple to just bow to the will of ‘the market‘ — whoever that was — they instead kept the quality high and kept improving and reinventing their products.
2. A loyal user base. I’m not talking about the fanboys here, but about ordinary people who’ve realised what they can expect from a company in terms of quality and customer support. Keeping a customer is always cheaper than acquiring a new one!
But there is more to that (the dark side, kinda): Apple has created an ecosystem that is best to be characterised as a ‘golden cage’; It’s comfy inside, but it’s hard to get out should you want to.

For the record: I like it in this golden cage.

“While many investors have been concerned that iPad would cannibalize Mac sales, we are seeing no signs of cannibalization,” said Munster. “In fact, the halo effect of Apple’s growing device user base (iPhone, iPad, and iPod touch) appears to be driving Mac sales, particularly internationally.”
— If I may hazard a guess, I’d say that this effect will become stronger in the years to come. iOS powered devices are primarily one thing: Clients to a host computer. They’re not self-sufficient. It has been that way since the introduction of the original iPod and I don’t think Apple will change that.

Daniel Swanson

Good analysis.

What we also have yet to see is the expanding range of applications of the iPad via new iOS apps developed for it, as well as the expanding range of markets which see its value and adopt and adapt it to fit their needs.

http://mangochut.net mangochutney

I agree. This especially applies to the corporate sector.

The iPad is a strange beast, and it’ll take time for the ordinary user to get used to the idea of client-host-based computing.

The first thing I thought when I saw the iPad during the keynote was: Finally, we have the PADD. Now gimme!

http://www.macwire.de Christian

Apple sold 8.4 iPhones… I think you’re missing a word there…

Otherwise, I’m not so sure about the claim that Apple only has a small market share. That would only apply to Macs. iPhones are having quite a market share in the Smartphone sector, especially in the US as far as studies tell us.

The same would apply to the iPad, if I’m not mistaken. Which tablet has a larger market share?

For Macs I don’t disagree, though.