Bigger Than the iPhone

Apple iPhone ‘halo effect’ set to drive Mac sales higher

By Paul Carton and Jim Woods

"Halo effect" -- An effect where the positive qualities in one thing give rise to the perception of similar qualities in related things.

A massive transformation is underway between consumers and their personal computers.

The latest consumer PC survey from ChangeWave Research showed two major purchasing shifts hitting the marketplace simultaneously. One is almost certain to have a transformational impact on Apple (AAPL), and the other has important implications for Dell (DELL).

A total of 3,881 members of the ChangeWave Alliance participated in the survey, which was conducted in June.

First, we asked respondents who had either bought a computer in the past 90 days or who planned to buy one in the next 90 days to tell us which type of computer (desktop or laptop) and the manufacturer.

Explosive Apple "Halo Effect"

It was no major surprise that Apple's consumer PC sales for the past 90 days held steady in both desktops (up one point to 8%) and laptops (down one point to 12%). The most important finding though, was the stellar year-to-year comparable on Apple laptop sales, which were up 33%.

But it's when we asked respondents about their planned computer purchases for the next 90 days that the marketplace transformation became apparent.

Going forward, an astonishing 28% of respondents who said they plan to purchase a laptop in the next 90 days said they're getting an Apple Mac -- a nine-point increase since our previous survey in March. Another 22% said they'll buy an Apple desktop -- a four-point increase since March.

The chart below shows just how dramatic a transformation in market share this represents for Apple.

What is the most likely explanation for such large-scale projected gains going forward?

First and foremost, all of the advance publicity surrounding the release of the Apple iPhone is concurrently having a "halo effect" on Apple computer sales. But another likely contributor is the release of Apple's highly anticipated Leopard operating system for Macs.

Bottom Line: For those wondering what a "halo effect" looks like, take another look at the above Apple chart.

What the Dell?

We uncovered more surprising news when the survey revealed that Dell experienced a large market share increase among consumers during the past 90 days -- the first positive results in a ChangeWave PC purchasing survey for Dell since June 2006.

Thirty-seven percent of Alliance respondents said they bought a Dell desktop in the past 90 days, up eight points. Laptop purchases also ticked up two points to 28%.

Before declaring victory for Dell, consider that the firm's picture for the next 90 days is not as rosy, although it is somewhat better in terms of desktops than previously. In Dell's case, that may be all it needs to impress the Street.

Planned desktop purchases for Dell (36%) gained one point -- a positive sign, although it's still 10 points below last June. On the down side, Dell laptop planned purchases fell five points to 28% -- a new all-time low.

The bottom line here is that after 18 months of decline, Dell suddenly showed signs of momentum among consumers. That, in and of itself, is a notable development. However, be forewarned that this is still overshadowed by Dell's market-share woes on the corporate IT side.

ChangeWave's most recent corporate IT spending survey results (click here to read our report) showed Dell hitting new all-time lows in the third quarter, with a one-point decline in projected planned purchases for desktops (34%) and laptops (33%).

Importantly, in terms of relative sales, Dell's corporate IT market dwarfs its consumer market, so we need to be very cautious in assessing the overall impact of the above consumer results. Nonetheless, the consumer uptick is a positive sign for Dell. We'll continue to watch this one closely.

A Mixed Bag for HP

Hewlett-Packard's (HP) desktop market share appears to have faltered in the past 90 days. Just 25% of respondents surveyed who purchased a desktop in the past 90 days said they bought an HP -- down five points from March. However, laptop purchases rose two points to 27%.

Planned HP desktop purchases for the next 90 days also appear to be trending lower, with just 23% of respondents saying they'll buy one -- a five-point slowdown since our previous survey in March. On a positive note, planned laptop purchases are up one point from previously to 28%.

Thus, ChangeWave's latest survey contained mixed results for Hewlett-Packard. It's moving forward in terms of laptop market share, yet stepping back in terms of desktops.

Gateway Loses Momentum

We also found mixed results for Gateway (GTW), as its consumer desktop share fell sharply during the past 90 days -- down six points to 3% -- possibly due to the Dell bounceback. However, Gateway laptops experienced a healthy three-point uptick to 8%.

Looking forward, planned purchases for Gateway desktops and laptops fell four points each, to 10% and 4% respectively. Overall, the survey results point to a weakening in Gateway market share and a decline in momentum going forward.

Bottom Line

Major winds of change are billowing on the consumer PC market and no one knows exactly what the landscape will look like in the future. One thing appears clear, though: Apple has huge momentum going forward.

With the 10,000-plus early adopters of the ChangeWave Alliance, you can be sure we'll continue to follow this story very closely.

The Alliance is a network of 10,000-plus highly qualified business, technology and medical professionals in leading companies of select industries. The Alliance is surveyed weekly on a wide range of business and investment research and intelligence topics.