Apple Inc. earnings will be delivered on July 21, and Wall Street is looking forward to an incredible report, albeit one with some problems in tow. Intel Corporation , which delivered its earnings numbers on Wednesday after the market closed, may have Apple to thank for its better than expected results.
Intel not only beat earnings expectations for the three months at hand, the firm also guided strongly upward for the rest of the year. The Data Center Group stayed strong and was one of high points of the report. PC Sales also came in higher than had been expected. Trip Chowdhry of Global Equities Research reckons he knows why that is.
Intel relies on Apple sales
Mr. Chowdhry, who is well known for his bullish outlook on Apple, reckons that “if you look at the numbers, this clearly indicates that many people on the Street were totally clueless on Intel.” He names the new MacBook as one of the hottest selling PCs in recent months and comes to the firm conclusions: “The beat on the PC is not Windows-based PCs but the Apple Mac.”
Mr. Chowdhry thinks that he can read the direct performance of related firms from the Intel results. “the cloud business from Amazon and Microsoft will be very good and it also shows that the Mac business from Apple is also going to be very strong. This is a key takeaway from the Intel numbers and guidance,” he says.
The Mac business is one of the last things on the minds of traders heading into an earnings report. Though Apple has kept sales of its PCs growing in recent years, it has not managed to grow quite as fast as the iPhone segment. The smart phone, and the firm’s newer products like the Apple Watch, are likely to keep all eyes away from the Mac segment.
Apple deals Intel a strong hand
As the wider PC market slows down and the Mac keeps selling, Apple is growing and growing as a portion of PC sales. The firm had 7.8 percent of the market in the second quarter of 2015 after selling 5.1m units. Through the same three months of 2014 the firm held 5.9 percent of the market on sales of 4.4m.
Those numbers come from a recent IDC survey on the state of the PC market in the second quarter of the year. A similar Gartner survey revealed the same trend.
Apple is far away from being Intel’s most important customer, but one in twelve PCs sold in the second quarter were made by the firm. It’s also the only large PC maker that is actually growing the market. That doesn’t mean that Mr. Chowdhry was right, however.
In order to impact Intel revenue Apple would have to sell a whole lot of Macs. Apple’s Mac segment probably did well during the three months of Q2, but it’s unlikely that the firm can claim responsibility for Intel’s beat on earnings. The firm can take credit for offering a substantial amount of help along the way.