Apple gains as PC sales blow past Goldman Sachs’ estimates

From a note to clients by analyst Rod Hall that landed on my desktop Tuesday:

Q4 PC units grew 26% Y/Y due to improving supply in the midst of a continued strong WFH [work from home] environment. HP lost share due to supply constraints, while Apple grew slightly faster than the market driven in part by its new M1 Macs. Looking ahead, we expect this general PC strength to persist into H1 but weaken in H2 driven by reopening as well as tougher comps.

    • Q4 units blow-out. Total units at 89.7m (+26% Y/Y) beat our estimate by 21%, with Consumer PCs (+27% Y/Y) beating our estimate by 18% and Commercial units (+25% Y/Y) beating our estimate by 24%. We believe the beat was driven mainly by continued higher spending due to remote working and remote learning as well as improving supply. We note that PC vendors have called out increased government funding globally during the pandemic to purchase PCs and tablets for schools to enable remote learning…
    • HP loses share, Apple gains. HP revenue rose 6% Y/Y, lower than market growth of 26% Y/Y to end up with market share of 18%, down 3pp Y/Y. Dell revenue rose 26% Y/Y to maintain its share of 17%, while Lenovo revenue rose 24% Y/Y, holding its share at 23%. Apple rose 35% Y/Y to end up with a share of 15% (emphasis mine), up 1pp Y/Y though we note that M1 Macs were likely in short supply in the quarter.

My take: When your estimates get beaten by 21%, 18% and 24%, respectively, you’re probably doing something wrong.

9 Comments

  1. Gregg Thurman said:
    My take: When your estimates get beaten by 21%, 18% and 24%, respectively, you’re probably doing something wrong.

    GS channel checks are in name only.

    I’d be auditing expense accounts if I were GS management.

    3
    March 23, 2021
  2. David Emery said:
    One hopes the estimates are cleaned of the ‘waste’ before they’re submitted to GS management.

    2
    March 23, 2021
  3. Jerry Doyle said:
    “…. Looking ahead, we expect this general PC strength to persist into H1 but weaken in H2 driven by reopening as well as tougher comps.” Wrong, brother Rod. The M1 and consumer conversion over to the Macs will persist throughout the H2.

    “…. Apple rose 35% Y/Y to end up with a share of 15%….”. Looks as if all of Apple’s increased market share came from HP. What on earth has happened to HP the last two decades??? Used to once be a great company.

    My take: The Apple Mac brand continues to gain strength among the consumer and commercial markets as the machine of choice. The new age of WFA will continue to drive this conversion.

    3
    March 23, 2021
    • David Emery said:
      If I remember right, HP got into personal computers by buying Compaq (where Tim Cook started out, again if I remember correctly.) That was a very different culture than “core HP’ that produced electronic measuring systems, etc.

      4
      March 23, 2021
  4. Fred Stein said:
    The triumph of incrementalism, Moore’s law, Tim Cook’s vision:

    He saw the value of, and invested heavily in, the chips. Apple had nearly died when their Motorola/PowerPC systems could not keep up. Now, 20 years later, Apple’s chips help Apple take share in all categories PCs, Tablets, SmartPhones, and wearables.

    7
    March 23, 2021
  5. Michael Goldfeder said:
    In Rod’s defense his estimates didn’t take into account the “Great Stanford MacBook Heist”, and countless others engaged in similar thievery across the globe.

    3
    March 23, 2021
  6. Fred Stein said:
    @Rod: Time to change your PT?

    2
    March 23, 2021

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