Apple: Will New Macbook Line Provide Another Big Boost?
Bobby is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Apple (NASDAQ: AAPL) reported quarterly earnings results today and throngs of faithful investor's hopes were answered that actual Mac (computer) sales are ticking up along with the rest of the company's recent hits.
Apple stock has been down nearly 12% since hitting all-time highs two weeks ago as the euphoria surrounding the voice activated SIRI and the retina burning iPad 3 have worn off. Glance around the coffee shop the next time you're waiting in line for a double half cafe latte and you will notice a sea of aluminum clad laptops. With Apple logos burning bright against the haze of espresso steam, one would think that Apple has a strong foothold on the overall computer market - yet this could not be further from the truth.
In fact, domestic Mac shipments only accounted for 10.6% of the market in the first quarter of 2012. Hewlett-Packard (NYSE: HPQ) and Dell (NASDAQ: DELL) lead the current PC race, yet both companies actually saw their year-over-year shipments shrink while Apple captured a 3.8% increase. Hewlett-Packard saw its market share rise by approximately 2%. The company shipped 15 million units in the first quarter of 2012. During that same time, Dell held 11% market share, having sold 9.8 million units. On the international front, Apple has not been able to crack the top five PC makers worldwide.
Could a new Mac laptop change the game in the PC space much like every other product category that Apple currently dominates? Consider that Apple CEO, Tim Cook, recently announced that the latest version of the venerable iPad racked up a record opening weekend with more than 3 million units sold. For comparison's sake, Apple moved 4.69 million iPads in the same quarter last year, which saw the launch of the iPad 2.
On the iPhone front - Apple sold more than 37 million last quarter. How do these launches compare with their bigger, heavier brethren - the laptop? I wish I did not have to say. Most analysts estimate that Apple sold just 3.1 million laptops over the first calendar quarter of 2012, with half of these sales coming from the popular 13-inch MacBook Pro. Just imagine the numbers if Apple can transform the personal computer just like it has the phone, the tablet, the music player and the retail landscape (just to name a few).
Some of the most provocative chatter regarding Apple's next laptop comes from KGI Securities analyst Ming-Chi Kuo. The analyst's most recent predictions point to a new MacBook hybrid coming to market later this year. Kuo is not alone in suggesting that Apple is aiming to offer the portability of the MacBook Air with the processing power of the MacBook Pro. Much like we have seen in the past, many insiders suggest that Apple could kill its 17-inch MacBook Pro this year to make room for a new product introduction.
The 17-inch MacBook Pro is gorgeous, yet just a little too unwieldy for everyday use. In a "small is the new big" world - it's easy to see what consumers want. Apple sales for the first quarter of 2012 are starting to look like 1.5 million for the 13-inch MacBook Pro, 1.1 million for the MacBook Air, 500,000 for the 15-inch model and a paltry 50,000 for the 17-inch.
The MacBook hybrid is not a guarantee, but a little more ironclad speculation is that Intel's (NASDAQ: INTC) latest Ivy Bridge processors will power Apple's next big hit. This is the chip that will replace the company's Sandy Bridge CPUs. They're the world's first processors to use a 22-nanometer manufacturing process and feature Intel's "Tri-Gate" 3D transistor technology. The new chips boast 20% more processing performance than their predecessors while consuming 20% less power.
Regardless of the final form factor for Apple's much anticipated new MacBook line, overall Mac business projections for the second quarter of 2012 look very promising. In June, Apple will launch Mountain Lion, which integrates iOS features with Mac OS and Apple TV interaction. Upgrades to Intel's Ivy Bridge chips are just around the corner and the ever-popular back-to-school rush will be here as summer winds down.
The Apple laptop line-up is certainly the easiest product launch to predict right now as all indicators point towards a refresh. An iPhone 5 is on the horizon, but odds are that Apple will ramp up its hype machine on the computer side of things once they release current PC sales this week. Investors love the growth story behind phones and tablets and they want to see Apple's MacBook line play a little catch-up.
If the semi conservative nature of the prospect of a new MacBook Pro / MacBook Air hybrid does not get your juices running, don't worry - Apple's got something special for you. Acclaimed French designer Philippe Starck is reportedly working with Apple on a revolutionary project that should see the light of day just in time for Christmas. Starck himself revealed this partnership information to a French radio station earlier this month. It has been documented that Starck and Steve Jobs used to meet on a monthly basis for about seven years. Could they have been talking about the new Apple HDTV? We will just have to wait and see.
Without an official product launch on the calendar, Apple investors will find out tomorrow if the recent stock drop is due to profit taking or genuine concerns. The company is expected to show that profit rose 55% while sales increased 48% from a year earlier, according to data compiled by Bloomberg. Apple's most recent sprint to $600+ was built on the release of the iPhone 4S in China and the explosive launch of the new iPad.
Even if Apple fails to achieve heavily predicted sales results in the future, old school investors will quickly point to similar rapid ascents by technology bellwethers in the 1990s that were often followed by equally stomach-churning free-falls. During the 1990s technology bubble, Cisco grew by $350 billion in eight months only to lose more than $200 billion in two short months. Around the same time, Intel Corp. gained more than $230 billion in four months only to shrink by $130 billion in a little over a month. Cisco is now about one-fifth its peak value from 2000, while Intel is about one-quarter its former size.
Apple continues to be the biggest growth story in the technology sector and a market-dominating product pipeline chock full of iPads, iPhones, iClouds, MacBooks and Apps appears unstoppable for the time being.
BobbyFisher has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
