Barclays Capital‘s Ben Reitzes this afternoon that Apple‘s (AAPL) continued success with tablet computers and its “MacBook Air” model of laptops pose a threat to disk-drive makers and PC makers as flash-based storage displaces disk-based storage.
Reitzes, who has an Overweight rating on Apple stock and a $750 price target, expects Apple may make new remarks about its use of flash drives in its products at its Worldwide Developer Conference on June 11th. He opines that “MacBook Pros equipped with NAND storage and MacBook Airs with more NAND storage options” could “ramp
quarterly demand for Macs by up to 1 million incremental units on a run rate basis — taking over a point of share from HDD-based PCs.”
Reitzes thinks the effect upon PC and drive makers is already evident in things such as� Dell‘s (DELL) disappointing fiscal Q1 report and weak Q2 outlook on May 22nd:
It can be argued that iPads and iPhones are being used for more PC tasks, elongating PC buying cycles and replacing some PCs altogether [...] As a result, NAND in the iPad and iPhone is also adversely impacting HDD demand for PCs. On the positive side, we believe that mobility trends are driving data growth trends, which help sales of enterprise based HDDs (even though flash is also rapidly growing in the enterprise too). As a result, Apple is arguably fuelling an interesting trend that is transitioning exabytes away from PCs and toward data centers – a capacity shift that could impact drive makers for years to come. It is not just HDD makers that are going to feel an impact from trends that Apple started. Last week (5/22), Dell acknowledged that PC demand was being impacted by strong sales of Tablets and Smartphones (both users of NAND flash). Moving forward we believe that more traditional PC players will start to acknowledge the impact of this cannibalization. Apple has a considerable lead on the yet to be released Windows 8 (including Windows 8 tablets) including an installed base of hundreds of millions of loyal users. Furthermore, we expect Apple to continue to drive the adoption of tablets with a possible 7″ tablet product later this year.
Apple shares today closed up $6.90, or 1.2%, at $579.17.
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