Apple (AAPL,$137.13) is making progress with its goal to vertically integrate the production of MacBooks. Earlier this month, the tech giant announced an update to its MacBook Air product line that will also include a new proprietary "M2" chip.
Back in 2020, Apple began insourcing the production of microprocessor chips for its MacBook computers. The in-house production of these M1 chips helped the company's computer sales pick up momentum. In its fiscal 2021, Apple's Mac business grew by 23% to over $35 billion in sales; and Mac sales rose more than 14% in its recent quarter, the fastest increase of any other hardware category.
However, as Apple gains PC market share, Microsoft (MSFT, $252.99) might face challenges in its Windows business. 7.5% of Microsoft's total revenue comes from licenses sold to commercial customers such as Dell, HP, Lenovo and many others. In 2021, Microsoft Windows dominated worldwide PC shipments with an 81.8% market share, with Apple only holding 7.9%; yet, predictions suggest that the tables might turn and Apple share will go up to 10.7% in 2026 as Windows share slips to 80.5%.
Why it matters
Despite supply chain issues, sales of Apple's MacBooks have been steadily rising for the last couple of years, which has also been beneficial to Microsoft (MSFT), whose revenues have gotten a jump from selling Windows licenses to new MacBook owners. However, Microsoft may need to watch out as people return to work and Apple makes a strong headway among consumers; their choices may begin to influence the corporate environment.
