Strong sales make Apple's 'quasi-tablet' MacBook Air a $2.2B-per-year product

Analyst Mark Moskowitz with J.P. Morgan said in a note to investors on Monday that checks with Apple's supply chain indicate that the MacBook Air has continued to be a strong performer for Apple. He said the information indicates that blistering sales in the fourth quarter of calendar 2010 were not an anomaly.

Moskowitz noted that 420,000 MacBook Air units were shipped in the fourth quarter of calendar 2010, which represented growth of 333 percent year over year, and 326.8 percent quarter over quarter. The level was also three times greater than the product's previous quarterly high. The number is also much lower than an estimate of over 1 million units given by another analyst in March.

The improved features of the MacBook Air borrowed from the iPad — including instant-on capability, thinness and ultra-portability — have positioned the notebook as a "quasi-tablet," Moskowitz said. But the MacBook Air also offers an integrated keyboard and full computing applications environment ideal for professional work-related tasks.

"We believe that the growth rate of the MacBook Air stands to moderate, but we expect the product to exhibit increasing contribution to the overall Mac business," Moskowitz wrote. "(The fourth quarter of calendar 2010) was the first quarter in which the MacBook Air accounted for greater than 10% of total Apple Mac units. More importantly, the MacBook Air accounted for 15% of total notebook sales during the quarter, versus 5% in the prior year."

In February, sources in Apple's supply chain indicated the company was doubling orders for the new MacBook Air to meet demand. Reports have also suggested that Apple tends to refresh the product in June with Intel's latest-generation Sandy Bridge processors.

Moskowitz believes the MacBook Air will continue to be a meaningful product for Apple, with its $999 starting price competitive enough to help the company gain market share in PCs. He said that last quarter the diminutive notebook generated revenues of $559.3 million, an increase of 256.2 percent year over year and 284.2 percent quarter over quarter.

"Assuming that Apple can sustain or increase the recent quarterly run rate of 420,000 units and pricing stays stable, annual MacBook Air revenues could track to $2.2 billion or better," he said.