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Apple’s (NASDAQ:AAPL) prospects have been under microscopic scrutiny recently because of the stock’s unexpected fall. UBS Securities analyst Steve Milunovich set out to fix some more misapprehensions about the iPhone maker on Wednesday, calling the company’s mobile operating system, iOS, the new Microsoft (NASDAQ:MSFT) Windows. Traditional personal computing has been dominant for years, but Milunovich thinks Apple’s pressure on the sector is working extremely well for a trend turnaround.
What makes Milunovich think Apple can dominate the personal computing space?
“Apple is gaining as the ratio of total notebooks to iPads plus MacBooks peaked at over 30 times in 2006 and is now just 1.6 times,” the analyst wrote in his research note. “Not only could iPad maintain half the tablet market, but MacBooks might steal a significant number of Windows PC users.”
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According to Milunovich, the increasing diversity in the tablet market is good for the iPad because “user confusion favors Apple given its leading brand, relatively simple product line, and retail store support.”
CHEAT SHEET Analysis: Trends Support the Industry in which the Apple Operates
According to Milunovich, who has a Buy rating on Apple shares and a $780 price target, Apple is primed to turn the industry on its head.
“Windows tablets are late to the game — notebook vendors endured two years of cannibalization by iOS and Google (NASDAQ:GOOG) Android tablets,” he wrote. “We hear that in enterprises that are giving employees a choice of PC, more than expected are shifting to Mac. In the consumer market, we expect to Apple to gain share as the younger generation has grown up on Apples at school. Pretty soon it could be that the ‘rebels’ will be the Windows users rather than the Mac users.”
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How Will This Affect Apple’s Stock?
Considering the volatility of the stock in the last two months, every positive assessment is key for Apple at the moment. While investors have been uneasy, analysts have not lost sight of the fact that the company has a lot of short-term potential, especially in the current holiday sales quarter. With Milunovich expressing positivity about the company’s longer-term prospects as well, the stock is likely to receive a boost.
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