Apple (AAPL) is already one of the world's most popular and recognizable brands, but that doesn't mean that the company still doesn't have a few tricks up its sleeve, according to a bullish Wells Fargo note.
Apple's Mac desktops are already popular in the creative and software developer spaces. But analyst Aaron Rakers says the Cupertino, Calif., tech giant could be at an inflection point at which the enterprise and commercial markets adopt the Mac in a big way.
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A Business Opportunity for Macs in Business
"While Apple's Mac revenue only accounts for about 10% of total revenue, we have seen Apple become increasingly vocal about the adoption of Macs in the enterprise space," Rakers said.
Wells Fargo analysts identified three different drivers for this adoption: Apple's ability to leverage the proliferation of its M1-series processors, which it developed internally; the expanding adoption of as-a-service offerings like Apple Business Essentials; and work demographics expanding support for giving employees the option to choose their devices.
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Apple's M1 Macs have already garnered attention in the consumer market due to performance and productivity improvements present in the devices. But the market is underestimating the attention the devices could see in the office.
"When this productivity increase is scaled across a large enterprise/organization with hundreds of developers, the savings could justify upgrading entire fleets of Macs, perhaps sooner than dictated by the typical three-to-four-year upgrade cycle," Raker said.
Wells Fargo estimates that the Mac installed base could be more than 140 million today, including between 55 million and 60 million commercial Macs accounting for about 40% of that total.
Employees Choose Their Devices
The trend is for employees to choose the type of devices on which they do their work, which could also lead to larger adoption of Macs in the enterprise space, according to Wells Fargo analysts.
That is in addition to the device's established popularity among the software engineering/developer and creative industries.
Wells analysts cite a Stack Overflow 2021 survey that found that 30% of respondents use Mac OS as their primary operating system, well above Apple's overall 8% to 9% PC ship market share.
So Apple has room to grow its Mac business, and that inflection point could be a catalyst for stock appreciation.
Rakers pegs Apple shares overweight with a $205 price target. At last check Apple shares were trading up 0.3% at $175.36.
