Apple bucking the trend of declining PC prices

Apple's capacity to maintain (and even raise) the average selling price of its personal computer systems in a market rife with yearly declines is just one of the reasons analysts at JMP Securities remain bullish the company's shares.

In a research report Friday, analyst Ingrid Ebeling noted that of the top 25 computers on Amazon.com’s best-seller list for the category of computers, Apple desktops and portables command 10 of the 25 spots, with an average selling price (ASP) of $1,482, compared with an ASP of $579 for the remaining 15.

Similarly, for fiscal year 2005, the ASP for Macs was $1,442, compared with $1,384 for fiscal 2005 in an industry characterized by declining ASPs, which fell from $1,042 to $957 over the same time frame, according to market research firm IDC.

"Although economic uncertainty in the US looms overseveral names in our sector, including Apple, we believe the overall PC industry market in 2008 will continue to be fueled by consumer demand for digital media, increased adoption of portable computers, and growth in emerging markets," Ebeling said. "The adoption of portable computers has been a contributing factor to growth, with units up 34 percent in 2007, a trend that has helped Apple given the response to the MacBook line."

However, she added that Apple’s desktop sales have also been very robust following the release of the new iMac, which drove year-over-year unit growth to 53 percent in the December quarter.

"Over the past two years, we estimate Apple’s worldwide market share has risen from 2.3 percent of 207 million units sold to 3.0 percent of 262 million sold, or from 4.7 million Macs sold in 2005 to 7.9 million Macs in 2007, representing a 2-year Compound Annual Growth Rate (CAGR) of 29 percent, compared to a 12 percent CAGR for the PC industry," she wrote. "In the US, we estimate that Apple’s share has increased from 4.5 percent to almost 7 percent, and that itsshare in the laptop market now exceeds 15 percent."

In respect to iPods, the analyst acknowledged recently disappointing results, but said she's still forecasting revenue growth of 17 percent and 14 percent in fiscal 2008 and 2009 based on unit growth of 5 percent and 13 percent, which assumes that the iPod touch — with price tags of $299, $399,or $499 — will help boost the product line’s ASP.

Over time, she expects the product should gain momentum as not just an iPod but also an Internet device. "It is considered one of the best WiFi mobile platforms and has a powerful interface to run Web applications," she said. " As Apple continues to add content to its iTunes store,such as movie rentals, consumers could be compelled to upgrade to the more expensive devices."

The JPM analyst reiterated her Market Outperform rating and $200 price target on shares of the Cupertino-based company.