Apple's retail outlets will be critical in selling Mac mini's to Windows users, according to Needham & Co.

In a research note released to clients analyst Charles Wolf postulates that with Apple "frequently described as a religion", the Apple Stores, "have become the places of worship, succeeding brilliantly in spreading the gospel". And the introduction of the Mac mini will help the stores in the task of, "attracting Windows users to the Mac platform and growing the Mac’s market share", he writes.

Gentle gains

IDC figures released yesterday showed Apple to be the fifth place US PC vendor, with worldwide unit shipments growing well in excess of the industry average in 2004, and a 0.1 per cent rise in global marketshare, to 3.3 per cent. Apple saw 25 per cent growth in the quarter, in contrast to an industry average of 13.7 per cent.

Since launch in May 2001 Apple Stores now deliver revenues of $2.2 billion per year - 16 per cent of Apple's worldwide sales, and 40 per cent of Apple's US retail sales.

The company had 101 stores open at the end of December, and plans to open 25 more this year, Wolf said, pointing out that sales per square foot are "more than five times higher" than typical mall-based stores

Mac-attach rates need to climb

However, despite the fact that 13 per cent of Windows users will buy an iPod when they visit a store, just 1 per cent of visitors bought a Mac.

"Sticker shock has been a major barrier to iPod-toting Windows users who’ve contemplated switching to a Mac. The Mac mini, priced at $500, 60 per cent below the third-generation entry-level iMac, promises to change this."

He continued: "The Mac mini has effectively eliminated price as a barrier to switching, although other costs remain, such as the purchase of Mac OS X software applications."
Mac mini, iLife and Apple Store promise

Wolf believes that Apple's ace card is iLife, which the company will be able to demonstrate running on Mac minis inside its stores, which he describes as "the ideal venue for selling the machine".

Wolf expects Apple will come close to selling a Mac to one in ten iPod-owning Windows users, simply by using those stores to show Mac minis and iLife to them.