Sustained growth of MacBook Air may provide Apple $3.0B-per-year opportunity
In a note to investors on Thursday, analyst Mark Moskowitz of J.P. Morgan revised his April estimates of a $2.2 billion a year revenue stream upward to reach the $3.0 billion figure. Moskowitz sees the average quarterly run rate of the MacBook Air reaching 700,000 units over the next 12-18 months.
According to Gartner's estimates, Apple shipped 432,000 MacBook Air units in the first quarter of 2011, up 412.9 percent year over year and 2.9 percent sequentially. In particular, Moskowitz sees the sequential growth as a positive sign of sustainable demand for the thin-and-light notebook.
The MacBook Air also significantly outpaced total Mac units (excluding the MacBook Air), which were down 10.5 percent sequentially in the first quarter of this year and the broader PC market, which was down 10.1 percent.
The current generation of MacBook Airs was released in October 2010 and became instant bestsellers. AppleInsider reported last week that Apple has readied an update to its MacBook Air line and will begin production this month with an initial run of 380,000 units. A subsequent report out of Taiwan mirrored the numbers, citing "industry sources." Analyst Chris Whitmore with Deutsche Bank believes sales of the new MacBook Airs could go as high as 1.5 million units per quarter.
Moskowitz sees Apple's iCloud and similar cloud-based services as driving a reduction in internal storage requirements, which should quicken adoption to the MacBook Air. J.P. Morgan estimates that currently just 3-4 percent of notebook PCS utilize Solid-State Drives instead of Hard Disk Drives.
The analyst believes the MacBook Air acts as a "a quasi-tablet for productivity," given its combination of tablet-like features such as ultra-portability, thinness, and instant-on with an integrated keyboard and a full computing applications suite.
International demand for the MacBook Air serves as evidence of plenty of room for growth, according to the analyst. By breaking out sales into regions, Moskowitz shows that the MacBook Air has a "fairly balanced" distribution and therefore maintains a "wide appeal."
Moskowitz does note that the MacBook Air's higher Average Selling Price may be a hurdle to sustained growth, but he predicts a $100 price drop for the MacBook Air in the next product refresh, due to "component cost declines and more integrated features." The current ASP of the MacBook Air is estimated to be $1,295, almost $300 more than the entry price.