Charlie Wolf: How the Mac roared back

Needham & Co.'s senior analyst explains how Apple outgrew the PC market seven fold

Needham's Charlie Wolf was as surprised as anyone when Apple (AAPL) reported that it had sold a record 3.05 million Macintosh computers in its fiscal fourth quarter -- a 16.4% increase compared with just 2.3% growth in the PC market.

The estimate Wolf had filed -- 2.63 million units for the quarter -- was one of Wall Street's lowest. (See here.)

So he took a close look at how Apple did it, and on Tuesday in a detailed report to clients he offered his answer: the home market.

"The twin drivers of the Mac's rebound," he writes in his executive summary, "were the home market's continued share gains in the PC market and the Mac's share gains in the home market itself. Shipments in the worldwide home market increased 18.1% compared to an 11.5% decline in all other PC segments, while Mac shipments in the home market increased 28.8%. In the Western European home market, shipments rose an impressive 58.9%.

Wolf's findings are driven home by a series of charts and graphs. The first, reproduced above, shows that the home market, which represented 64% of all Mac shipments, was the only segment of the PC market to show any growth in the September quarter.

The second, below, shows that the Mac outgrew the home market itself (28.8% vs. 18.1%), while holding its own in the business market (-12.4% vs. – 13.7%).

Another spreadsheet shows that the Mac grew faster than the PC market in all regions of the world -- most impressively in Western Europe, where the Mac outgrew the market by 38 percentage points.

In the remainder of his long report, Wolf makes the case that there's an iPhone "halo effect" that's even stronger than the original iPod halo, especially in Europe. And he applauds Apple's management for ignoring the advice of the many pundits who warned that it would lose share if it didn't abandon its premium pricing structure.

Apple stuck to its guns, and it paid off. Its dollar share of the home market is growing even faster than its unit share. Today, Apple gets one out every ten dollars spent on home computers worldwide. (See below.) In the U.S., its dollar share is more than one in five.

[Follow Philip Elmer-DeWitt on Twitter @philiped]