Monday, October 19, 2009
Once again Apple has far exceeded even the most bullish expectations with the release of its fourth quarter results. The stock is trading after hours at $202 as I write this, an all-time high. I first wrote about Apple last January when it was trading around $85, and I've been bullish all the way (I actually bought the bulk of my position back in 2002).
A quick check of the stats on this blog shows that 70% of those who visit are still using Windows XP; 13% use Vista, and 11% use Apple's Mac OS. XP is now an ancient operating system, Vista is widely considered a failure, but Windows 7 is getting good reviews. So I expect that a lot of XP users are going to entertain the thought of upgrading (finally) to a modern operating system. Unfortunately the upgrade path is difficult and painful, requiring users to wipe their hard drive and reinstall all their programs manually. If they don't feel quite that adventuresome, they will likely consider alternatives such as simply buying a Mac instead. I know many people who have made the switch, and the most common observation is something like this: "gosh, it's so nice to use a computer that just works." Most of those XP users probably need to buy a faster, more capable computer in any event.
So I see lots of room for Apple to gain market share against Microsoft in the OS market, and against other computer manufacturers in the hardware market. Meanwhile, Apple is the acknowledged innovator in its field, and the iPhone is rapidly becoming a major player in the smartphone market, with over 7 million sold in the most recent quarter. That's a winning combination: a small but rapidly rising market share, plus technological leadership and innovation that produces products that are a marvel. I just don't see how anyone can dethrone the Mac OS, Apple hardware, and the iPhone at this point. The competition is getting better every day, to be sure, but this race is Apple's to lose.
XP users: please feel free to comment on your plans. Will you upgrade to Windows 7? Wait for awhile? Try a Mac instead?
Full disclosure: I am long AAPL at the time of this writing.
UPDATE: Apple yesterday announced new iMacs. Among their many features, possibly the most interesting one is the ability to use the 27" iMac as both a HD-screen quality computer, and as an optional monitor for a Mac laptop or Mac mini.
Posted by Scott Grannis at 2:17 PM