uploads///PC Shipments

Microsoft Needs to Watch Apple in the PC Market


Dec. 4 2020, Updated 10:43 a.m. ET

Apple was the only player to record positive double-digit growth in the PC market in 2Q15

In Part 8 of this series, we discussed the triple-digit 4Q15 revenue growth related to Microsoft’s (MSFT) Surface tablets. This revenue growth, coupled with Xbox and search advertising revenues, managed to offset the decline in the D&C (Devices and Consumer) segment’s overall revenue, which got hit by flailing PC demand.

Since Gartner and IDC (International Data Corporation) released the 2Q15 PC shipment figures in July 2015, a wave of despair has washed over the technology space. Advanced Micro Devices (AMD) slashed its 2Q15 revenue expectations by about 8% due to weak PC demand. Micron Technology (MU) also blamed “weakness in the PC sector” for its poor fiscal 3Q15 results. Microsoft’s D&C segment also reported a 13% decline for the same reason.

But this despair didn’t touch Apple.

According to IDC, Apple (AAPL) was the only PC player among the top five that outperformed its peers in 2Q15, with global growth of 16.1%.

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Apple is gaining strength at the expense of Microsoft’s Windows OS

The above chart shows that for the last 12 quarters, Microsoft Windows PC shipments have decreased. In contrast, Apple is continuing its upward trend. In its most recent quarter, 3Q15, Apple reported the sale of 4.8 million Mac units, a 9% YoY increase. Given that the dominance of Microsoft’s Windows operating system in the PC market continues to decline, it appears that Apple is gaining market share at the expense of Microsoft’s Windows.

Apple continues to expand via product refreshes and the launch of new products

Apple’s growth could be explained by the fact that it continues to launch new products and promote them aggressively. In 2Q15, Apple refreshed the MacBook Pro and the MacBook Air, and introduced the MacBook. MacBook Air and MacBook Pro now include Intel’s (INTC) Broadwell processor. Its 13-inch and 15-inch MacBook Pros now include Force Touch trackpads. In March 2015, Apple introduced the new fanless MacBook.

It does appear that Apple’s strategy is working better than Microsoft’s strategy for Windows.

If you’re bullish on Apple stock, you could consider investing in the Technology Select Sector SPDR Fund (XLK). It has 16.1% exposure to Apple.


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