Elevated Mac & iPad growth to continue for years, analyst says

Loup Ventures cofounder and analyst Gene Munster recently analyzed Mac and iPad lead times, or the expected shipment date after an order is placed. Spot checks of estimated order delivery suggest that Apple was correct in its guidance that demand would be supply gated, and not demand-gated.

Although the extended lead times are attributable to ongoing chip supply constraints, Munster sees them as a positive indicator of iPad and Mac demand. The analyst believes that both lineups are continuing to see tailwinds from a work-from-home and remote education environment, despite the lifting of stay-at-home orders and other restrictions in many regions.

Estimated delivery dates for some iPad and Mac models, including the 10.2-inch iPad or the 24-inch iMac, are more than a month out.

"While interpreting lead times is more art than science, we've observed that during periods of supply demand equilibrium, lead times are typically less than 2 business days. Keep in mind, June is typically the slowest quarter for Apple, so if there was ever a quarter for the company to catch up supply with demand, it'd be this one," Munster writes.

In the March quarter, Apple's Mac and iPad did extremely well, with year-over-year growth of 70% and 79% respectively. Munster believes that things are only going to get better for the iPad and Mac, and Apple as a whole.

Chip supply constraints will take a few months to iron out, Munster says, which is a negative. However, the analyst says that elevated demand for the Apple tablets and PCs will be longer-lasting because of a continued remote environment and the transition to first-party Apple Silicon chips.

"Regarding the digital transformation, we're still in the early stages of a new hybrid paradigm, with businesses, schools, and consumers electing to outfit and upgrade their hardware. Based on this, we believe Mac and iPad can both grow revenue 8%, 7%, 6%, and 4% in FY22, FY23, FY24, and FY25, respectively, which would be above consensus estimates," Munster says.

For comparison's sake, Mac and iPad growth was generally flat in the five years leading up to the global pandemic. Munster's growth estimates in the next few years are above consensus.

Munster also says that Apple appears to have achieved supply-demand balance for the iPhone lineup, with lead times across the company's current smartphone stable sitting at about one business day.

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