Apple isn't just resurgent, it's taking over

By Jonny Evans

The Apple [AAPL] turnaround isn't just a resurgence, but a takeover. Apple today is the world's largest mobile solutions company with huge growth potential and is beating up the likes of HP and Lenovo in some markets.

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Just check the data

There's so many signs which show that the company's resurgence is a lot more than a blip. Apple is the world's most valuable company; it's competitors are the biggest household names across multiple industries, and when it comes down to computer sales, in Europe, Apple is the only PC maker to have grown at all (though only by 0.5 percent) during a miserable Q2. HP, Dell, Lenovo and Asus all showed negative growth, according to Gartner.

PC shipments in Western Europe totalled 12.7 million units in the second quarter of 2011, a decline of 18.9 percent from the same period in 2010. The analysts report weak demand in both pro and consumer markets, with overstocked inventories promising more nightmare ahead. As we all know, the iPad has destroyed mini-notebooks, where shipments decreased 53 percent. Mobile PC sales fell 20.4 percent, while desktop sales in Europe fell 15.4 percent.

"PCs are not attracting consumers' disposable income, particularly in light of alternative devices. While remaining an important device to consumers, there are few compelling technological reasons to drive PC replacements," said analyst, Isabelle Durand.

And what are people buying when it comes to a PC replacement?

An iPad.

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That post-PC thing

Display Search notes that if you add Apple's iPad sales to its notebook sales then Apple now controls 21.1 percent of the mobile computer market, higher than HP or Dell. These analysts see Apple as having shipped 13.5 million mobile computers in Q2 2011, 10.7 million of these being iPads. Apple's sales were up an eye-watering 136 percent, the kind of growth no one else anywhere seems to be experiencing...

Analyst Richard Shim notes: "The rising tablet PC shipment growth rate begins to point to notebook PC shipment cannibalisation."

Which sounds promising for all those companies also offering tablets, except it's not, because outside the world of the Phandroid comment spam posse, in the real world people who want a tablet do indeed want an iPad.

Get the iPad habit

A Robert Baird survey of 1,100 potential tablet purchasers confirms 94.5 per cent of shoppers cited the iPad as a device of interest. 10.3 percent cited any interest in an HP TouchPad and just 3.8 percent of punters want to play with RIM's PlayBook.

Now this is interesting because all the market share data for tablet markets shows Apple with around 70 percent tablet market share but this begs the question: are these estimates based on sell-through to end users, or to retail? And if to retail, at what point will returned stock be included within these marketshare comparisons?

I accept that I've previously discussed the stock return crisis which will soon impact the business results of anyone who doesn't make an iPad. Expect a lot of red in corporate results in the next series. Now there's proof that this is happening.

Millions of tablets from other firms are sitting in warehouses or store shelves across the world, and no one is taking them out the door. I know price cuts are planned, but these aren't going to work: they aren't selling because no one is interested. And this is a tragedy waiting to play out.

The ouch Pad

"According to one source who's seen internal HP reports, Best Buy has taken delivery of 270,000 TouchPads and has so far managed to sell only 25,000, or less than 10 percent of the units in its inventory," writes AllThingsD, warning that the 25,000 figure might be "charitable". Oh dear.

HP is begging Best Buy not to return these unwanted TouchPads, but the retailer wants the warehouse space back.

This is not a good sign for HP, and is clear evidence that all manufacturers in the tablet space are being soundly beaten by Cupertino. Recall the Robert Baird survey above which reveals the HP TouchPad to be the second most-recognised tablet? That recognition isn't driving sales.

All the aces

Speaking of brand recognition, China is also becoming a Cupertino playground. Apple's iPhone is plat-du-jour for the rising middle class. And, once again, the company has parlayed the iPhone's popularity for a spike in Mac sales: Apple's sales in greater China surpassed those of Lenovo for the first time in the second quarter of 2011, thanks to a sixfold increase in sales from last year.

The popularity of Apple in China has driven some amazing extremes, including a young boy offering up his organs for an iPhone and the sudden appearance of over 20 completely fake but remarkably convincing imitation Apple retail stores in the world's most populous country.

The world's healthiest economy is all over Apple, and this is going to grow, with Apple CEO Steve Jobs and China Mobile moving to agree an iPhone launch on the world's biggest mobile network. This will put an Apple into even more Chinese hands, and will inevitably drive interest in the company's other products.

Get real

I'm often condemned for seeming to take a pro-Apple view here at my 'Apple-Holic' column, but I think it is time for critics to become realistic. The data supports a position that Apple is in the ascendancy, and while historically we know empires rise and fall, I think it is far too early to report any fading of Apple's star, not least because it shines brighter by the day.

Apple has become the consumer's sweetheart, driving sales and product interest levels at at rate others can only stare enviously at. That's great, but by far the biggest deal for any investor: the company still has plenty of scope for even further growth -- the China Mobile iPhone deal being solid evidence of this.

As I said last year and still see no reason -- yet -- to utter a different opinion, it's time to wake up to an Apple planet, PC world.

Though it will also be interesting to watch the next chapter of the long-lived Apple versus Microsoft battle, when the latter firm ships its new Windows 8 OS, which in a classic moment of imitation as flattery will include an all-new feature guaranteed to end PC retailers nice profitable software sales business: an App Store.

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