Apple Inc. (NASDAQ:AAPL) could be a big winner as PC sales slow down. Gartner’s results for 1Q13 PC shipments of 79.2mn units imply an 11.2% y/y decline and 10.8% sequential decline, which is below 1Q13 PC unit estimates of 85.3mn units. This was below normal seasonality (-7.0% sequentially over the last 5 years), additionally global PC shipments dropped below 80mn units for the first time in 15 quarters.
The weakness in the PC market continues to reflect many investors’ long-held view of the shift in consumer preferences for media consumption devices and tablet cannibalization. Even in emerging markets PCs are not expected to post significant growth as firsttime compute device users shift to tablets or smartphones. Relatively, the commercial PC market was somewhat stable and saw some growth as commercial PCs now account for 50% of the market.
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Apple Inc. (NASDAQ:AAPL)’s PC sales far exceed those of competitors. Gartner preliminary research shows +7.4% y/y growth and market share of 11.6% in the US (up 180 bps y/y) for Apple Inc. (NASDAQ:AAPL), which suggests that Mac demand continues to be more robust than the market, but it is obviously affected by the consumer shift towards mobile devices, such as tablets/smartphones to within which Apple Inc. (NASDAQ:AAPL) is well positioned.
Nevertheless, in a multi-device world, Credit Suisse believes that Apple Inc. (NASDAQ:AAPL) is materially advantaged versus peers, as its vertically integrated structure allows it to simultaneously address all three aspects of the compute market, i.e., PCs, tablets and smartphones, effectively driving a virtuous circle of competitiveness.
CS sees Apple Inc. (NASDAQ:AAPL) as well positioned to meet their forecast of 400 million tablet shipments in CY 2017, or over 50% of compute devices. Moreover, much of the innovation comes in software, enhanced by a broad range of “i Services” which are hard to replicate.
Analysts at Mizuho Securities largely agree with CS stating ‘HP and Dell continue to lose share to Lenovo while Apple keeps doing well at the high end of the market.’