Why Apple Has Microsoft SHAKING In Its Boots

Microsoft (NASDAQ:MSFT) has been the unquestionable leader of the computer market for years, but new data suggests the ratio of PC-to-Mac sales now has Apple (NASDAQ:AAPL) in the most competitive range since 1985. According to Asymco analyst Horace Dediu, the increasing popularity of Macs and the decline of the traditional desktop, which usually run on Windows, have meant that the PC versus Mac sales ratio is now down to around 20 to 1, the lowest since its 56 to 1 peak in 2004.

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The year 2005 marked the beginning of a general decline in PC sales that has continued. Dediu blames the Microsoft drop on what he says is a saturated business market and a general dissatisfaction with Microsoft’s follow-ups to Windows XP. He also puts some of the responsibility on the emergence of laptops as desktop replacements, an area where Apple has had a differentiating product.

The analyst also talks of the halo effect that started with Apple’s first iPod success in 2005. In just one year, the 56 to 1 ratio of PC to Mac sales dropped to 44 to 1. Apple, which makes most of its revenue from sales of its mobile iOS devices, now has all-time high Mac sales of around four million per quarter. However, for truer historical comparative purposes, Dediu did not include tablet and iPad sales. He notes that if iPad sales were included, the ratio in the last two years would have moved much more dramatically in Apple’s favor, down at a 6 to 1 Windows computer versus Apple computer ratio. When iPad sales are included, Apple becomes the top individual computer brand, and responsible for nearly one-fourth of all computer sales.

Dediu predicts that Apple (NASDAQ:AAPL) is likely to achieve parity with Microsoft’s (NASDAQ:MSFT) overall sales in a year or two even if the latter’s launch of the Windows 8 operating system and the forthcoming Surface tablet become successful.

Shares of Apple (NASDAQ:AAPL) closed at $605.88 per share on Friday, while Microsoft (NASDAQ:MSFT) finished the week at $30.18 per share.

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