Mac Sales Get a Kick of Lion & Refurbs This Quarter

As the quarter comes to an end, the interest level of how many devices Apple (NASDAQ:AAPL) will sell in the quarter increases. This is what is happening with so many analysts forming their views on how Apple will fare in this quarter. According to the latest data from NPD, Apple’s Mac sales are up 22% for the first two months of the September quarter. ^[1] The street is expecting a 16% growth rate for the entire September quarter, or in other words expect 4.5 million Macs to be sold in the quarter. As shown in the above chart, we expect Apple to sell 4.5 million and 4.8 million Mac PCs in the next quarter, which means we are in line with the analyst expectations.

Our $510 price estimate for Apple stock is about 35% above market price.

Triggers for Mac sales growth this quarter

During this quarter, Apple released the latest version of its Mac operating system named OS X Lion. Despite the 250+ new features included in this version, one of the most eye catching items was that the software price was cut drastically to $30 (see Apple’s Lion OS Price Reduced to Boost Mac Sales, Undercut Windows). The result was that Apple sold over 1 million licenses on the very first day of the launch, making it the fastest selling OS release in Apple’s history. ^[2] Another trigger for this quarter were the updates to Mac Mini and MacBook Air. ^{[3] [4]}

Apple continue to maintain impressive growth

Although the broader PC market continues to struggle, Apple has continued to maintain impressive growth in the PC market. We discussed about the broader PC market struggle in our earlier note titled Mac Sales Could be Slowing but Small Impact on Apple’s Stock, where we mentioned that HP’s (NYSE:HPQ) consideration of spinning off its PC business, and Dell (NASDAQ:DELL) experiencing pressure on sales and margins signify this struggle.

Apple’s impressive growth can be seen from its market share in the notebooks segment, which has grown from 4.8% in 2010 to an expected 5.8% in 2011. Mac accounts for around 12% of our price estimate for Apple’s stock, which means Mac sales growth may not have much impact on Apple’s stock value unless it surpasses our expectation by a big margin.

See our complete analysis for Apple stock here

1. Apple’s Mac Sales Blowing Away Expectations, BusinessInsider quoting NPD Group as the source, September 12th, 2011 [↩]
2. Lion Downloads Top One Million in First Day, Apple press release, July 21st, 2011 [↩]
3. Apple Updates Mac mini, Apple press release, July 20th, 2011 [↩]
4. Apple Updates MacBook Air With Next Generation Processors, Thunderbolt I/O & Backlit Keyboard, Apple press release, July 20th, 2011 [↩]