Analyst: iPod halo effect should continue

Apple Computer jumped into fourth place among PC vendors as it climbed to 4.5 percent market share in the United States, according to a report from market research form IDC. Noting the importance of the iPod in Apple’s overall strategy, IDC said that the so-called “halo effect” should continue if Apple continues to innovate.

“They have been very vocal about their iPod and although I’ve been very skeptical about the whole halo effect, it clearly seems to be gaining traction,” IDC analyst David Daoud, told MacCentral. “There has to be some sort of correlation between their iPod business and the overall brand recognition of Apple.”

Daoud also said that Apple’s retail strategy appears to working for them as they try to reach out to new customers. With retail locations in the U.S., Canada, the U.K. and Japan, Apple is in a much better position to control the sales and messaging of its products.

Although there is no solid evidence to back up the belief that the iPod has had any effect on the sales of Macintosh CPUs, IDC believes there is a renewed interest in Apple as a company.

“The marketing campaign to promote the iPod has certainly helped renew interest in Apple‣s PC business,” said Daoud. “You can do a statistical analysis to come to this conclusion, but there is really nothing tangible to prove it. Clearly their product strategy has worked—they are showing double-digit growth on the desktops.”

The double-digit growth on the desktops includes Apple’s entire product line like the Power Mac, iMac, eMac and the Mac mini. While many credit the low-priced Mac mini with Apple’s resurgence in the desktop market, IDC isn’t so sure.

“Initially when you look at the market and what’s being talked about, you get the impression that the Mac mini is the one driving it,” said Daoud. “But when you do a pure average sell price analysis, you get US$1,229—that’s certainly not a mini.”

IDC believes that desktop sales are being driven more by the iMac and Power Mac systems. Daoud was also taken aback with the performance of Apple’s notebooks when compared to the growth of the desktop systems.

“I’m a bit surprised to see that their desktop performance is better than the notebooks,” said Daoud. “Sequentially, desktops are growing at twice the rate that the notebooks are.”

Daoud believes that when all of the market share numbers are finalized, education will be the factor that has boosted Apple’s numbers the most. With a buying season that just ended and the back to school season just beginning, IDC believes Apple’s sales in the market will be strong.

“I think when the numbers are finalized we will see Apple has very strong growth in the education market,” said Daoud. “There is a possibility that they [Apple] have done some very large deals with school systems to sell them computers.”

With iPod and Macintosh sales on the rise, Apple has reported record revenues for two straight quarters, but is that sustainable? IDC says it is, as long as Apple does what it does best - innovate.

“It is sustainable if innovation is part of the strategy” said Daoud. “If you come up with new products and new features you are certainly going to be ahead of the game. Apple has certainly had the experience in doing that – that company comes up with very cool products.”

This story, "Analyst: iPod halo effect should continue" was originally published by PCWorld.

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