Merrill Lynch says Boot Camp likely to increase Mac sales
Analysts for Merrill Lynch on Wednesday said Apple's new Boot Camp software should be an incremental positive in the near-term that will likely increase the company's total addressable market (TAM).
The analyst suspects most users wanting Windows will be price sensitive on hardware, and so far Apple has tended not to lead in low end price points. However, he notes the feature can be viewed as taking some of the risk out of a switch to Mac because the investment can be easily
repurposed to run Windows natively.
"Apple's (TAM) should increase, though we are not yet convinced it will increase by an amount
sufficient to dramatically change earnings power," Farmer wrote. "Our model suggests that for
every point of PC market share gained, Apple generates more than $2 billion in incremental revenue and $0.42 NOPAT/share, including attached peripherals."
NOPAT is lingo for Net Operating Profit After Tax, an estimate of what a company would earn if it didn't have any debt, equal to operating income times (1 minus the tax rate).
Farmer and Merrill Lynch maintain a "Neutral" rating on Apple shares.