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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. wstcoast's Avatar
      wstcoast -
      Definitely! I bought an iPod, that made me buy an iPhone and this past Friday, that made me buy a Macbook Pro.
    1. TooSlo's Avatar
      TooSlo -
      Quote Originally Posted by snap1500 View Post
      ...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 )...
      I beg your pardon about "lower cost plastics"

      AnandTech: Evolution of Lian Li's SOHO Server Cases

      I purchased that case four years ago and it's currently on it's third overhaul of my PC. Given mine doesn't have the "look at me" side window, I prefer the incredibly quiet case that allows me to run two separate raid arrays without any outside hardware.

      Having a 6 disk raid 6 setup with 1tb drives is fantastic. I really don't need to worry much about overall storage for another year or so.

      Secondly I have a separate Raid 1 array of SSDs for games and other fun things that I prefer quick access to. I only have 3 64gb drives set up here, so yes, space can be somewhat limited.

      Those things alone make a case such as the Lian li a must-have if you are a serious media enthusiast.

      Quote Originally Posted by snap1500 View Post
      ...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...
      I would be suspect to think that Apple is using better hardware than is available to anyone else. While I admit, the core i9 is an interesting setup, I'm quite content with my i7 that I've overclocked to 4ghz without breaking a sweat.

      I would also be wary of thinking that Apple puts better quality memory in their machines. I would doubt that Apple is putting Mushkin Redline memory in their regular machines. I would also doubt the use of a better heat sink and CPU fan. Even with everything running, I barely break 32db.


      In the end, the wonderful part is that I didn't need to do silly things like throwing an entire computer away when I upgrade. The DL-DVD burner that I've had for 4 years still works great, the case fans haven't stuttered a day in their little lives, and that's running 24/7! My raid card still works as well as day 1. I don't need a computer built into a monitor, because I have everything in the tower next to my desk. Since I haven't had to upgrade the case, I can still use the same matching furniture in my office.

      So... someone sell me on this? Can a Mac in native trim share media out to all of my various devices in a simple manner like my PC can? How about hosting my own web and FTP servers? Sure you can run a virtual environment, but there's something ironic about saying "A Mac can do this much!" but then relying on Windows apps to actually accomplish it.

      Seriously, I want to be wow'd, I just don't see the benefit. Please, someone help me understand how I can get a better rig than what I'm currently running for under 2 grand that will utilize my raid arrays and allow me to frequently game. Oh, and it has to be good with things like video chat since my wife and daughter enjoy talking to the in-laws.

      Anyone?
    1. tsatryan's Avatar
      tsatryan -
      I , too, fall into this category. I was a Windows user for as long as there has been Windows. Used CPM before that. As soon as the "pocket pc" came out, I had the HP Jornada. Moved to the HP iPaq. As soon as the pocket pc phone was available, out went the iPaq, and in came the Samsung i700. Then the i730. Got fed up with its horrible system and constant freeze-ups, and after the iPhone came out, figured I would give it a try, thinking I could sell it and return to WindowsMobile if I wanted to. I never wanted to. It worked from the get-go. I had the original iPhone, upgraded to the 3G, and now have the 3Gs. A year after having the first iPhone, I purchased a brand new 17" MacBook Pro, based solely upon my good experience with the iPhone. I have never looked back. I still use PC's when I need to - and I know my way around the PC, and I am the "go to" person for tech support wherever I am. But, now I am just as home on a Mac as on a PC, and always choose the Mac. I won't buy another PC. I am now a Mac.
    1. Melech518's Avatar
      Melech518 -
      Quote Originally Posted by Rota View Post
      This definitely isn't the case for me. I got an iPhone back when the 1.1.4 firmware was out simply because it was jailbroken and not locked down at all. As time progressed I realized that Apple simply took all their ideas from the jailbreak community and called them their own, then tried to monopolize them. Furthermore, they charge 2-4 times as much as any comparable PC with the same hardware for nothing more than flashy looks and a dumbed down OS. There are ASUS laptops out there for $800 that destroy any MBP in terms of hardware.

      I am completely in the same boat as TooSlo. I truly want to be impressed by what a Mac can do and what justifies the astronomical price. I've wanted to be impressed for the last 15 years by a Mac, but every year it just gets worse. Their business ethics have turned them into the exact thing they used to be against.
      Past 15 years? Arent you still in high school?
    1. Melech518's Avatar
      Melech518 -
      That still doesnt answer the question...
    1. snap1500's Avatar
      snap1500 -
      Quote Originally Posted by TooSlo View Post
      I beg your pardon about "lower cost plastics"

      AnandTech: Evolution of Lian Li's SOHO Server Cases

      I purchased that case four years ago and it's currently on it's third overhaul of my PC. Given mine doesn't have the "look at me" side window, I prefer the incredibly quiet case that allows me to run two separate raid arrays without any outside hardware.

      Having a 6 disk raid 6 setup with 1tb drives is fantastic. I really don't need to worry much about overall storage for another year or so.

      Secondly I have a separate Raid 1 array of SSDs for games and other fun things that I prefer quick access to. I only have 3 64gb drives set up here, so yes, space can be somewhat limited.

      Those things alone make a case such as the Lian li a must-have if you are a serious media enthusiast.



      I would be suspect to think that Apple is using better hardware than is available to anyone else. While I admit, the core i9 is an interesting setup, I'm quite content with my i7 that I've overclocked to 4ghz without breaking a sweat.

      I would also be wary of thinking that Apple puts better quality memory in their machines. I would doubt that Apple is putting Mushkin Redline memory in their regular machines. I would also doubt the use of a better heat sink and CPU fan. Even with everything running, I barely break 32db.


      In the end, the wonderful part is that I didn't need to do silly things like throwing an entire computer away when I upgrade. The DL-DVD burner that I've had for 4 years still works great, the case fans haven't stuttered a day in their little lives, and that's running 24/7! My raid card still works as well as day 1. I don't need a computer built into a monitor, because I have everything in the tower next to my desk. Since I haven't had to upgrade the case, I can still use the same matching furniture in my office.

      So... someone sell me on this? Can a Mac in native trim share media out to all of my various devices in a simple manner like my PC can? How about hosting my own web and FTP servers? Sure you can run a virtual environment, but there's something ironic about saying "A Mac can do this much!" but then relying on Windows apps to actually accomplish it.

      Seriously, I want to be wow'd, I just don't see the benefit. Please, someone help me understand how I can get a better rig than what I'm currently running for under 2 grand that will utilize my raid arrays and allow me to frequently game. Oh, and it has to be good with things like video chat since my wife and daughter enjoy talking to the in-laws.

      Anyone?
      sorry, I failed to mention that I was refering to laptops. Desktops are made of metal of course.
    1. Melech518's Avatar
      Melech518 -
      Don't worry, you dont even come close to bothering me. But a junior in college would make you around 20-21ish. So you have been waiting to be impressed since you were 5 or 6 by Apple? Ok, right....

      Quote Originally Posted by Rota View Post
      I just love to get a rise out of people because I can practically do it in my sleep over here.
      I do think it is funny how you deleted this part of your post however. You must have read it and realized how childish and immature you sounded.
    1. Melech518's Avatar
      Melech518 -
      Quote Originally Posted by Rota View Post
      Also, despite the fact that I kind of like arguing with you over Macs and PC's I really have nothing against you. We're both just a bit arrogant so our personalities clash.

      Agree to disagree for once? <3
      Lol, I can agree with this statement