Can Apple’s Mac App Store Mirror the Success of the iPhone App Store?
Apple (NASDAQ:AAPL) is expected to announce the new Mac App Store on December 13th, 2010. [1] We believe that the introduction of the Mac App Store would not only help Apple sell more apps, but more importantly help Apple sell more Mac notebooks and desktops.
App Store Becoming Important for Mobile Phone Companies
Long before Apple’s entry into the mobile phone segment, companies like Nokia (NYSE:NOK), Motorola (NYSE:MOT) and Research in Motion (NASDAQ:RIMM) were primarily competing on refining hardware features. Apple revolutionized the mobile phone industry with the iPhone’s launch in 2007 and brought forward the significance of software and applications to mobile phones.
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Apple launched its App Store in July 2008 and has enjoyed a clear first mover advantage since then. As Apple attracts more iPhone users through its superior App Store, it will encourage developers to create more applications, creating a self-sustaining cycle. Some of the popular apps for the iPhone include games like Call of Duty and Angry Birds, and social networking apps like Foursquare and Groupon.
Apple’s App Store has more than 300,000 apps for both the iPhone and iPad, [2] and we estimate that 2.2 billion apps were downloaded in 2009, a total that could increase at an exponential rate to around 60 billion by the end of the Trefis forecast period. Google Android platform comes in second with 90,000 apps while Nokia and RIMM have far fewer apps. [3]
Modify the chart below to see how changes in total iPhone and iPad app downloads affects Apple’s stock value.
[trefis_forecast ticker=”AAPL” driver=”10398″]
Can the Mac App Store Generate Upside to Apple’s Stock?
As discussed above, the App Store not only helps generate revenues through app downloads, but it also indirectly helps Apple sell more iPhones and iPads. If Apple can create a similar pull effect for the Mac using the new App Store, Apple could potentially sell many more Macs. We estimate that the notebook market share for Macs will increase from 5% in 2009 to 10% by the end of the Trefis forecast period.
Modify the chart below to see how changes in Mac’s notebook market share affects Apple’s stock value.
[trefis_forecast ticker=”AAPL” driver=”10327″]
There could be an upside of 12% to the $418 Trefis price estimate for Apple’s stock if one in every 5 notebook sold is a Mac by 2017. In other words, if the notebook market share for Macs increases to 20% by the end of the Trefis forecast period.
See our full analysis for Apple here
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