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  • The "Halo Effect:" iPhone Bolsters Mac Sales


    An industry analyst credits the iPhone's continued hot sales for buoying Apple's computer business at a time when other PC makers are barely holding their own in the tough economy. Calling it the "iPhone Halo Effect," Needham & Co. analyst Charlie Wolf says the popularity of the iPhone encourages consumers to switch to the Mac. They are doing so in droves: Mac sales worldwide grew 16.4% as compared to the same period last year, while the rest of the PC market grew by only 2.3%.

    Wolf writes the subscription-only "Wolf Bytes" investor note, which was excerpted by AppleInsider. He noted that Apple's growth came in spite of the fact that the computer manufacturer has refused to make low-cost netbooks, as many analysts have been calling on them to do. Instead, Apple has continued to focus on the "premium" market: distinctive computers that consumers have shown willing to pay extra for.

    We have consistently argued that Mac price cuts were a misguided strategy. Such cuts would not have stimulated much demand because the price elasticity of demand for the Mac -- the one differentiated product in a sea of commodities -- was simply too low. They would end up decimating Apple's gross margin with little to show for it.
    Apple has a worldwide "revenue share" of approximately 10%, meaning that 10% of all money spent on computers the world over paid for a Mac. Its market share, on the other hand - how many of the total computers have Apple logos on them - is near 4 percent. In the U.S., the revenue share for Macs is above 20 percent, and the market share is just above 10 percent.

    According to Wolf, a major factor in the ongoing rise in Apple sales is a spin-off to the popularity of the iPhone, which has a "halo effect" that makes users more likely to buy or switch to a Mac. Wolf noted this when the iPod took off, but says the iPhone exerts this effect in an even more powerful way.

    We believe that the halo effect emanating from the iPhone should be even stronger than that surrounding the iPod. After all, the iPod is a relatively simple device while the iPhone is arguably a mini-computer wrapped in a phone's form factor.
    Last quarter, Apple sold a record 3 million Macs along with 7.4 million iPhones, increasing the company's profit more than 46 percent to $1.67 billion. Most of the 16.4 percent growth in Mac sales is due to computers sold outside the US market. Mac sales went up 9.8 percent in the US this quarter, but the increase in the same time period was 38.7 percent in Europe and 27.1 percent in Asia.

    Apple continues to be strong for home and school use, while weaker in business. Sales to home users grew 28.8 percent worldwide in September, as compared to just 18.1 percent for all other manufacturers. Education sales grew 15.6 percent, while other PC makers 2.5 percent in schools. Mac sales fell 12.4 percent in the business market, however, and sales into government institutions plummeted 76.8 percent.

    Apple is expected to sell another 2.9 million computers this quarter.

    image via IDC
    This article was originally published in forum thread: The "Halo Effect:" iPhone Bolsters Mac Sales started by Paul Daniel Ash View original post
    Comments 28 Comments
    1. thetoothfairy's Avatar
      thetoothfairy -
      Yup that is what I did..... bought the iPhone thought it was cool and then my Macbook and then my IMac...... the iPhone sucked me right in! LOL And glad that it did!
    1. Melech518's Avatar
      Melech518 -
      I was the opposite. Bought the Mac and then decided I needed an iPhone
    1. rhekt's Avatar
      rhekt -
      ^^ yup same as melech got my macpro first then went to iphone.
    1. TooSlo's Avatar
      TooSlo -
      I think that I would definitely buy a netbook if they had one available since all I want to do with it is web surfing and whatnot while on-the-go.

      I'll happily tote around a Sony Vaio netbook instead. /shrug

      Apple has sadly been unable to sink their teeth into me. I have a core i7 desktop that I built for 1/2 the cost of a Mac, and I definitely adore my Lian Li case as well.

      C'est le vie. Hopefully they will uber secretive and sell a netbook in the next two weeks while I'm ironing out which one I really want!
    1. Hyperextension's Avatar
      Hyperextension -
      I am part of this as well. Lifetime PC user (except as a kid when they had the Apple 2C in schools), and I got an iPhone.

      Loved the phone and went and got a Mac for my home computer. Still need my PC laptop for work, but my home is Mac driven now for sure.

      Macbook is the next one for me.
    1. hancoma's Avatar
      hancoma -
      Wife got an Iphone, I loved it (once it was j/b, snowed, rained), and I had to get one...
      So I thought why not try a mac?
      Never looked back, no regrets!!!!
    1. hollow0's Avatar
      hollow0 -
      I think this article is talking about me! Yes, i got the iPhone and then liked what i saw. Then, eventually i became curious of the MacBook Pro and ended up purchasing one. I haven't really "switched" to the Mac as the article says..i just added it to my collection of PCs and utilize both.

      The Mac hopefully, will be my last laptop. As long as i can bootcamp it with Windows (love bootcamp!), i'm set! Though i have to admit, the touchpad on the Windows OS sucks on the Mac. I wish i could use the multi finger functions like on the OS X.

      The one thing that bothers me are the haters. Why can't we all be open minded to what we want without being criticized?
    1. Atomi's Avatar
      Atomi -
      iPhone 3G first, Macbook Second :- p
    1. MetallicaFan1991's Avatar
      MetallicaFan1991 -
      Got an iPod Video, then got iPhone 2G, then got MacBook Pro and the got the iPhone 3GS
    1. snap1500's Avatar
      snap1500 -
      Doing a bit of research here for my upcoming article in the San Jose Business Journal. Seeing how this news shows that macs are growing in popularity and that this is a mostly mac community, this might be a great way to get some information. So my question to everyone is: What do you mainly use your mac for? Thanks in advanced.
    1. bengo's Avatar
      bengo -
      ^ That's cuz it's not cool to go to Starbucks with an iPhone and an Acer laptop... they just don't match! GAWD!
    1. k9srkool's Avatar
      k9srkool -
      I did pretty much the exact opposite of that. I bought an iPhone 3G, saw that apple was being an a$$h01e with their app store approval process and their turning against Google, and I decided not to reward them by buying another one of their products (plus their 17" laptop starts at an outrageous $2500....).
    1. barno909's Avatar
      barno909 -
      @ Snap1500
      Everything I used my PC for before, but now a lot faster. Making movies and slide shows, writing reports for school and doing Java code for my programming courses, and of course the internet and all it's bounty. It does everything a PC does but better. There are those that complain about it not being able to play the PC games... that's not me, if I want to play games I get a console (not xBox cause I hate microsoft now) like the PS3 dedicated to playing games.

      I got an iPod and thought if they can make an mp3 player this easy why not a computer, still took another year and getting sick and tired of my laptop having problems before I got an iMac. The laptop became used for logging into work only. Then I got a Macbook and run VMware fusion to use vista to log into work. No more PC's for me!
    1. snap1500's Avatar
      snap1500 -
      Quote Originally Posted by barno909 View Post
      @ Snap1500
      Everything I used my PC for before, but now a lot faster. Making movies and slide shows, writing reports for school and doing Java code for my programming courses, and of course the internet and all it's bounty. It does everything a PC does but better. There are those that complain about it not being able to play the PC games... that's not me, if I want to play games I get a console (not xBox cause I hate microsoft now) like the PS3 dedicated to playing games.

      I got an iPod and thought if they can make an mp3 player this easy why not a computer, still took another year and getting sick and tired of my laptop having problems before I got an iMac. The laptop became used for logging into work only. Then I got a Macbook and run VMware fusion to use vista to log into work. No more PC's for me!

      Thanks for helping me out. May I ask what movie editing software were you using on the PC and what software do you now use on the mac? If it's the same software, which platform was easier to use? If different softwares, I guess there is not an accurate way to compare.
    1. TooSlo's Avatar
      TooSlo -
      Quote Originally Posted by snap1500 View Post
      Thanks for helping me out. May I ask what movie editing software were you using on the PC and what software do you now use on the mac? If it's the same software, which platform was easier to use? If different softwares, I guess there is not an accurate way to compare.
      I think that another thing to take into consideration if the same application is being used, is the cost of the overall machine.

      I know that currently there is no Mac that can touch my PC in regards to costerformance.

      Apple 27" iMac 2.8GHz Quad-Core Intel Core i7 Desktop Computer - Z0GF0003W - $2399

      The price upmark on these is absurd for what you are getting. I've recently built an i7 machine (as stated earlier) that will give me much better bang for my buck.

      If Apple allowed a more open design for hardware, then yeah, I might consider dual booting my rig to see what the OS is all about, but I'm not going to drop damn near 3 grand on a computer after all is said and done just to try out an OS.

      I think the closest that I could do is buying the cheapest notebook that they have and dual boot Win7 and OSX. That or find out if there are any real issues with loading OSX on a netbook, as I've read it's somewhat easy. That might possibly sway my decision on the netbook that Apple just doesn't want to make.

      Again, it comes back down to a reasonably priced device to try to lure me in. Without that, Apple will never see a dime from me aside maybe a future iphone purchase.
    1. iphone4idiots's Avatar
      iphone4idiots -
      @snap1500 I like iSquint for Mac. I find Handbrake too confusing. Any Video Converter is good for PC or Mac. As for speed. I've never paid attention cause either one is pretty fast. Not immediate, but not long.

      I totally fit this profile. I bought my first Mac ever when I got my iPhone. I'll probably buy another for the house, but I'm still a PC guy. Anyone know the easiest way to convert mkv to mp4 or avi?
    1. snap1500's Avatar
      snap1500 -
      Quote Originally Posted by TooSlo View Post
      I think that another thing to take into consideration if the same application is being used, is the cost of the overall machine.

      I know that currently there is no Mac that can touch my PC in regards to costerformance.

      Apple 27" iMac 2.8GHz Quad-Core Intel Core i7 Desktop Computer - Z0GF0003W - $2399

      The price upmark on these is absurd for what you are getting. I've recently built an i7 machine (as stated earlier) that will give me much better bang for my buck.

      If Apple allowed a more open design for hardware, then yeah, I might consider dual booting my rig to see what the OS is all about, but I'm not going to drop damn near 3 grand on a computer after all is said and done just to try out an OS.

      I think the closest that I could do is buying the cheapest notebook that they have and dual boot Win7 and OSX. That or find out if there are any real issues with loading OSX on a netbook, as I've read it's somewhat easy. That might possibly sway my decision on the netbook that Apple just doesn't want to make.

      Again, it comes back down to a reasonably priced device to try to lure me in. Without that, Apple will never see a dime from me aside maybe a future iphone purchase.

      True. You can't have a real comparision because the hardware wont match up 100%. One way to compare them is to use the exact same hardware as much as possible, memory, harddrive, CPU, video card, Soundcard. The mother board will obviously never match, but this is one way of testing.

      If you were to price the above parts for mac and PC, you will find that the price is somewhat the same for mac and PC. One reason for the higher price of macs could be because of material ued. You are paying a higher price for precision machined aluminum housing vs lower cost plastics used in PC. There's also the designer cost (there's no way a bunch of computer programmers can design such beautiful products ). And then there is the cost for the OS. It's not free you know. Apple charges a premium for having their name on the product as well. As for whether the mac motherboard is better than PC motherboards, research is still being done on this. At the moment, not much to support that mac hardwares are better. Otherwise, there wouldn't be applecare right?

      Quote Originally Posted by iphone4idiots View Post
      @snap1500 I like iSquint for Mac. I find Handbrake too confusing. Any Video Converter is good for PC or Mac. As for speed. I've never paid attention cause either one is pretty fast. Not immediate, but not long.

      I totally fit this profile. I bought my first Mac ever when I got my iPhone. I'll probably buy another for the house, but I'm still a PC guy. Anyone know the easiest way to convert mkv to mp4 or avi?
      Thanks. Have you tried AVS video and audio conversion software? I think this is a pretty easy software to use. Also, I especially like the idea that you pay a small amount and you can get licensing to all of their 8 programs with lifetime upgrade and access to new software for free.
    1. Ximpostrxx's Avatar
      Ximpostrxx -
      i've been using macs for 4 years now, starting with my black macbook and now with my 15 inch suuped up unibody mbp, as soon as i heard of the iphone i was like omg i have to get it and that I did lol and i just recently added to my apple collection with a 64gig ipod touch after the hard drive in my ipod classic got frieddd..

      i think apples recent popularity is simply due to WAY more exposure!! Think about it, previously Mac products were only availible in Apple stores, with the introduction of authorized retailers Apple has brought their product to millions more who didn't have Apple store near them... also Apple has beefed up its advertising in a major way
    1. battlecrushr's Avatar
      battlecrushr -
      i hate all of u mac people
      haha jk, i still have vista but upgradeing to windows 7 as im getting a new computer.
      mite install or dual boot snow leopard on it
    1. uncle_don's Avatar
      uncle_don -
      I'm a life long PC user. I've never used a Mac. I love my iPhone, jailbroken of course, and I'm getting my first Mac on Saturday. I ordered a Mac Book Pro and it's ready for me to go pick it up. It's in another city and I can't travel until Saturday, but I'm rather excited.