Morgan Stanley: 40% of college students plan to buy Macs
A recent higher-education survey cited by analyst Katy Huberty reveals that roughly 40 percent of college students say their next computer purchase will be a Mac, well ahead of Apple's current 15 percent market share in the demographic.
In the near term, this sets the Cupertino-based Mac maker up for a strong September quarter — a three-month period that embodies the heart of the back-to-school buying season, where incoming freshmen, existing undergraduates, and universities all plunk down considerable sums of cash in order to invest in computer hardware for the coming school year.
"Longer term," Huberty said, "we see an 'aging phenomenon' that will put Apple in a more mainstream market share position as students enter the work force, much like Linux adoption in the 1998-2003 time frame."
She noted that as the Linux platform matured and developers entered the workforce, enterprise-level Linux adoption accelerated eightfold, with 16 percent of servers shipped in 2003 running flavors of the linux operating systems compared to just 2 percent five years earlier.
For Apple, which holds just shy of 3 percent worldwide share of the personal computer market, each incremental percentage point of share gain means billions, Huberty said; approximately 6 billion in yearly revenues, and a full dollar in per share earnings for investors.
The analyst maintained her Overweight rating on shares of Apple, with a $185 per-share Base Case scenario that assumes Mac unit share rises to 3.5 percent from 2.9 percent in the next 12 months, and that consumers continue to buy up into the Mac product family, providing the company with some gross margin leverage.
Huberty also outline a $225 per-share Bull Case scenario which assumes twice the operating margin expansion of her Base Case scenario for the 2008 calendar year, driven by 40 percent revenue growth from broader demand for mobile products and greater success in the international and enterprise markets.
"Consumer demand presents largest downside risk to estimates," she said. "[The] rate of new product innovation must be sustained to justify strong double-digit revenue growth expectations."
95 Comments
This is actually pretty good news.
For what it's worth, I find this to ring extremely true amongst many of my higher education counterparts.
[QUOTE=AppleInsider;1234128]Apple's rapidly rising mindshare amongst current generation college students is setting the company up for an "aging phenomenon" that will spur further market share and revenue growth as those students enter the work force, investment bank Morgan Stanley said Wednesday.
I knew this was coming! I knew it back in 1997! Apple's stock is the closest thing to bankable there is in this economy. It has been the best performer for both the 5 year and the 10 year stats!
Yeah!
Every time I turn on my PC I start yelling. I'm no wimp, I'm a general software enthusiast on both PC and Mac, but the PC has just got on my lasssst nerve.
I'm telling family, no more computer help unless it's a Mac!
I used the Apple II in high school, then made a special trip to a local mall when the Macintosh was first introduced. I've been hooked on Apple ever since.
Its not just students, its faculty too. In my department we've gone in 4 years from being Windows/Linux based to almost 100% Mac for all new computer purchases. The Mac is becoming the defacto research machine in my field (astrophysics) and when I go to conferences well over 50% of laptops I see are Apple.
Which makes Apple's f***ing up of X11 in Leopard all the more annoying.
Yeah, all these percentages look great (and I am sure if you surveyed undergrads in the 1990s, you'd have found a qualitatively similar result), but when these folks hit the corporate world, a significant proportion will succumb to reality (in the form of "comfort factor" and "switching costs").