Morgan Stanley: Apple gains market share worldwide

“Q4 IDC results point to robust 5G demand, Apple share gains from Huawei, record notebook shipments” — Analyst Katy Huberty

From a note to clients that landed on my desktop early Friday:

Q4 results show Apple share gains on the back of Huawei weakness. In the December quarter, Huawei’s global unit share declined 6.5 points Y/Y, and it lost share in all regions. Huawei lost the greatest market share in China (13.4 points), which led to share gain opportunities for other vendors. Apple was the largest beneficiary from Huawei weakness in China, gaining 5 points of share Y/Y, followed by Xiaomi (+4.4 points), OPPO (+2.9 points), Vivo (+1.4 points), and Samsung (+0.3 points) (Exhibit 3). While Huawei switchers are most likely to gravitate to another Android based offering, Apple’s strong market share gains in regions where Huawei lost the largest share, such as China and EMEA, suggests Apple is likely gaining switchers from Huawei. Overall, Apple increased unit share in all regions and gained 3.4 points globally (Exhibit 4). The largest gain was in North America, where market share was up 8 points Y/Y, reflecting the strength of the iPhone 12 product cycle in the US…

In PCs, record notebook shipments drove strongest demand in over 2 decades. … Apple was the largest PC unit share gainer in 2020, gaining 80 bps Y/Y, however, its unit share of 7.7% remains low compared to Lenovo at 23.8%, HPQ at 22.2%, and Dell at 16.2% (Exhibit 8). While the gap narrows on a revenue share basis, Apple still ranks 4th behind these vendors. This reflects commentary from management that Apple still has room to penetrate the PC market, which they hope to achieve through their M1 lineup, and we are encouraged by these early share gains. HPQ was the largest share loser (down 1 points Y/Y), but still maintained the 2nd highest unit share at 22.2%, and Dell lost 70 bps of share Y/Y.

Maintains Overweight rating and $164 price target. 

My take: Compare and contrast to Goldman Sachs’ Rod Hall (Sell, $83).

Cue the exhibits:

Apple worldwide market share

Apple worldwide market share

Apple worldwide market share

15 Comments

  1. DMW said:
    What’s being understated by the reported 5% gain in China is that the 12/12Pro were only available for 10 weeks of the quarter and the 12mini/12max about 6 or 7 weeks and some models in short supply.

    So the true gain in say the month of December must have been much higher, perhaps north of 10%.

    That momentum must augur very well for the current quarter in China. I haven’t seen anyone else note that Chinese New Year this year fell on Feb 12, about 19 days later than last year. That means the strong momentum carried into the quarter with an extra “19 days of gift buying” than 2020.

    By the way, I am Darren from Australia. Nice to meet you all.

    4
    February 19, 2021
    • Bart Yee said:
      Welcome to the blog and PED group Darren!

      1
      February 19, 2021
  2. Romeo A Esparrago Jr said:
    Fast & Furious Mx chips will win this slow & steady race.

    5
    February 19, 2021
  3. Gregg Thurman said:
    Using the rule of 72, if Macs continue to gain share at a 7.7% rate, Mac unit market share will double in about 9 years. Think of how that will impact the most important metrics (revenue and profits) during that period.

    Now I’m not saying Mac share is going to grow at that’s rate every year, but I do think that the superiority of the Mxx processor will drive significant share growth. The rate may decline, but actual units shipped will accelerate, especially after Mac share achieves 10%, a level I believe is important to mind share.

    3
    February 19, 2021
    • Alan Levy said:
      Wait, isn’t 7.7 its current share so you can’t apply the Rule of 72 to just the Mac’s percentage of the total market? I don’t see how share of market compounds over time….

      2
      February 19, 2021
      • Gregg Thurman said:
        Great catch Alan. I used the wrong number, posted above, as basis for my post.

        0
        February 20, 2021
  4. In January 2005 I lugged a pricey G5 tower back to my photo studio, to replace a once cheap HP now full of costly software, graphics and memory upgrades. The first task I gave my new tower was a daily post-shoot PS batch to rename, resize, tag, watermark and upload 660 Nikon DSLR raw photos to a client’s secure site through a fraction of a T1 I leased. The G5 completed that task in 30 minutes. The HP required an hour or more for the same task, with frequent errors. I put 75% of my retirement funds in AAPL within a week. There were no iPhones, iPads or even iCars rumors. There was PEDs TIME column though…
    Postscript: The G5 served until 2017.

    1
    February 19, 2021
    • David Emery said:
      Those G5 were a bitch to carry! Given the nice smooth ergonomic handles on the (plastic) G4 case, I don’t know why Apple couldn’t have done better on the metal G5.

      1
      February 19, 2021
      • Yup, and I often took it with me for longer assignments, albeit with a smaller display.
        To be clear, my hardware bet continues to pay off handsomely, but in a different manner than I expected. It’s clear I saw Apple becoming dominant in PC and Server markets. Instead Apple became the world leader in smartphones, tablets, smartwatches and audio wearables. Oh well, I still have a jolly time on the way to the ATM. Those shares are now part of my photo biz SEP, paying me a fixed monthly amount.

        1
        February 19, 2021
  5. Ralph McDarmont said:
    Rod Hall is a lunatic. Fire him! He is outrageously wrong just to win attention and clicks. People want to see train wrecks too. It is human nature to stare at bizarre and unsettling things. We are built to sort things out. But Rod Hall is quite a test.

    0
    February 19, 2021
  6. Jerry Doyle said:
    “…. however, its unit share of 7.7% remains low compared to Lenovo at 23.8%, HPQ at 22.2%, and Dell at 16.2% (Exhibit 8). While the gap narrows on a revenue share basis, Apple still ranks 4th behind these vendors.”

    That above denotation calls to mind the cliché, “glass half full-empty” perspective. Rod Hall sees the glass half empty. We see the glass half full. If I were the CEO of Lenovo at 23.8 or HPQ at 22.2 or Dell at 16.2, then I am on the defensive and fighting to hold marketshare all while knowing there is little opportunity for me to gain marketshare. If I am Tim Cook I am on the offensive and fighting to gain available marketshare all while knowing there is opportunity for me to grow additional revenue. Candidly, I rather know that I am at 7.7 with a runway to lift-off for continued growth as oppose to my being at the end of the runway unable to lift-off for further growth.

    2
    February 19, 2021
  7. Greg Lippert said:
    Speaking of Mac I cannot wait for the M1 iMac. Itching to replace my 2015 machine. Hurry Apple, my Apple Card is standing by.

    I don’t think I’m alone….

    2
    February 19, 2021
    • Bob Goldstein said:
      I have been waiting to replace my 2013 iMac

      1
      February 19, 2021

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