Thursday, March 29, 2007, 09:00 pm PT (12:00 am ET)
Apple thrives under Vista onslaught, steady on iPodsAn expert at Morgan Stanley has reasoned that of all the major computer makers in play during the release of Windows Vista, the only one to avoid taking a hit in sales was the one company that chose not to run the software at all: Apple.
In a research note issued to investors, Morgan Stanley analyst Kathryn Huberty advised readers that Apple was the healthiest PC vendor during the first two months of the new year, seeing virtually no damage to its rapid growth compared to Windows-using rivals.
"[Apple] is the only vendor that appears unscathed by the Vista transition," Huberty said.
Most system builders predictably suffered from the combination of both the post-holiday seasonal slump and the wait for Microsoft's long-delayed OS. Buyers at retail and in smaller-scale businesses repeatedly showed hesitation in buying a new Windows PC throughout most of January knowing that Vista loomed near.
Companies such as Lenovo were especially hurt, seeing a virtually flat 3 percent growth from one year to the next compared to a much healthier 29 percent during the same period in 2006. Even current industry champion Hewlett-Packard saw a slight dip, according to the note.
But while virtually every vendor of Windows PCs depended on the Vista-related sales surge in February to make up for a lackluster first month, Apple continued its march forward seemingly untouched by Vista's presence: the number of Macs shipped to the same business and retail buyers grew by 71 percent year-over-year in January and a nearly identical 72 percent in February.
Apple also took an 8 percent share of this particular market, compared to 6 percent a year ago — boding especially well for the still modestly sized Mac maker in the face of resurgent competition. Some assumed the company would lose ground to Vista as it had with prior Windows updates.
A consistently strong showing was also the hallmark of the California firm's other core business, the iPod. Apple showed no signs of letting go of its by now well-entrenched marketshare, holding over 73 percent of the music player sales through the early part of the year and growing 30 percent between the same two months in 2006 and 2007. Would-be challengers had to largely be content with taking each other's business, the report noted.
The combined effect was to position Apple as one of the strongest computer companies heading into the spring, pulling ahead not only of the 23 percent average jump in PC sales during the 12-month span but also having an extremely resilient digital media player share to boost its finances. Huberty was clearly impressed by the outlook for the company's short-term future.
"Continued Mac momentum and strong double-digit iPod growth... give us confidence that [Apple] will beat expectations in the March [quarter]," she said.
On Topic: Investor
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