Analyst survey delivers proof of iPod 'halo' effect
Apple stock is on the rise once again, as analysts raise their target prices and provide support of an iPod 'halo' effect.
Shares of Apple Computer jumped as much as 16 percent on Monday, to their highest level in more than 4 years, after one Wall Street analyst nearly doubled his price target on the stock.
"Piper Jaffray analyst Gene Munster raised his 12-month price target to $100 from $52, citing a survey conducted by his firm showing that Apple's popular iPod digital music players are helping boost sales of its signature Macintosh computers."
In a research note to clients, Munster said that a survey of 200 iPod users in the United States found that 6 percent were formerly PC users who had bought a Mac after buying an iPod. Another 7 percent of the iPod users surveyed said they planned to buy a Mac in the future.
Munster also said that he believes high levels of customer satisfaction with the digital music player will lead to an increase in Apple sales.
"We believe that the remarkable satisfaction with the iPod creates a word-of-mouth wildfire that generates new customer interest in Apple products," he said.
Apple shares jumped $6.61, or 12 percent, to $61.78 in mid-morning trade on the Nasdaq stock market after rising as high as $64 earlier in the session.
Shares of Apple Computer jumped as much as 16 percent on Monday, to their highest level in more than 4 years, after one Wall Street analyst nearly doubled his price target on the stock.
"Piper Jaffray analyst Gene Munster raised his 12-month price target to $100 from $52, citing a survey conducted by his firm showing that Apple's popular iPod digital music players are helping boost sales of its signature Macintosh computers."
In a research note to clients, Munster said that a survey of 200 iPod users in the United States found that 6 percent were formerly PC users who had bought a Mac after buying an iPod. Another 7 percent of the iPod users surveyed said they planned to buy a Mac in the future.
Munster also said that he believes high levels of customer satisfaction with the digital music player will lead to an increase in Apple sales.
"We believe that the remarkable satisfaction with the iPod creates a word-of-mouth wildfire that generates new customer interest in Apple products," he said.
Apple shares jumped $6.61, or 12 percent, to $61.78 in mid-morning trade on the Nasdaq stock market after rising as high as $64 earlier in the session.
Comments
Kickaha did you sell at $50 you might just get a bit more for that Ducati
Seriously, I decided to hold on and see what happened. $50 was my sell point for 'no more good news, same old same old". Well, we've had very good news, and things they are a'changin'. News on the HD-DVD and broadcast formats wrt MPEG-4 and QuickTime's core technologies is *VERY* good. Should create some good markets for Apple in the next two years.
Also note that that $100 target is for a year from now, not next week. Consider that iPod sales are *still* increasing. The analyst took the 13% switcher rate and cut it in half for safety... but still, a 6.5% rate on the estimated 6 million iPods sold this Xmas season results in 390,000 *new* Mac users. That's a nice boost for that quarter, yes?
Also, iTMS is still the leader of the pack for online music, despite every major competitor now having their cards on the table. For a while it was "Oh, Real is going to knock them off", then it was "Ooooh, Sony will stick it to them", and finally "MS will crush them for sure". Um... right. Hasn't happened, doesn't look like it's going to anytime soon. The initial salvo is over, and iTMS is sitting pretty. This plus the creation content end means that Apple has both tech and creds to push for the next big thing in entertainment creation and delivery. I won't presume to know what that is, or what it will look like, but Apple has all the pieces. They've quickly turned into precisely what so many have pleaded with them to be for so long: a software company. Just not the software most people envisioned.
They've leapfrogged MS in the control of basic technologies. MS controlled the OS, and won the PC wars. Apple is poised to control (or at least have best of breed experience for) the very formats that media content is created, delivered, and viewed in. Thank you, QuickTime, iPod, and iTMS.
Originally posted by Kickaha
The analyst took the 13% switcher rate and cut it in half for safety...
The only thing I'm squeamish about, is that a survey of 200 users isn't a hell of a lot. Regardless, the gauntlet has fallen. There better be evidence of a halo effect in Apple's financials in the near future, or the stock will get hammered.
It's not INSTANT, but over the course of the next few years, it's certainly going to be real.
Someone who thinks computer=Microsoft and then loves iTunes and iPod will take Apple a little more seriously as an option to consider next time they buy a computer. Maybe now, but more likely in a year, or two, or three. Maybe the computer after next. But the seed is planted--at a time when people are increasingly fed up with Windows.
You see lots of posts from people saying they got a Mac because they liked their iPod. The halo effect is real, it's just the scale of it that remains unknown.
One good thing--it's not JUST an awareness effect. It's also a branding/coolness effect--something very powerful in these times of consumerism.
Originally posted by the cool gut
The only thing I'm squeamish about, is that a survey of 200 users isn't a hell of a lot. Regardless, the gauntlet has fallen. There better be evidence of a halo effect in Apple's financials in the near future, or the stock will get hammered.
I wholeheartedly agree. It's a bit small of a survey to be making such large claims on, but bigger claims have been made with smaller sample sizes and worse methodology...
And yet that market share number just stays flat, if not drops. I want to see that actual number increase, not just a predictor of the number.
I have gone from a tried and true PC user to an emissary for Apple products, all because of the iPod. The HALO effect is real, regardless of the size of the poll.
My ipod gift has resulted in the trashing of 25 PCs in favor of Macs.
Go Apple. Superior hardware. Superior software. Superior company. Period.
I will NEVER go back to MS.
I think/hope the tide is turning but I can't wait for more proof like Ihvide's story.
I recently got a G5 with Cinema display that works perfectly and is an absolute dream to use. But more to the point, visitors that watch me using it are amazed too, and when I say 'Apple' it's like they are suddenly aware of the name (because of iPod) when before it would have gone in one ear, out the other. I thought there was brand awareness before but it's much more now.
Then a year ago my girlfriend bought me an iPod for my birthday, and I bought a G5 a couple of months ago. I probably wouldn't have bought it if I'd never owned the iPod. So there is some kind of 'halo' effect, but with PCs being replaced every 3-4 years it's not going to happen overnight. But Apple are getting mindshare (and generally very positive at that) and you need that to drive sales beyond your normal customers. People I know who would never have bought anything by Apple are now talking about them as a company to at least take seriously. Even with geeks who used to look down on Macs as something that only 'arty' types would buy because they couldn't work out how to use 'real' computers. Now they're jealous of things just working, having a powerful Unix base, great design, and things being generally very high quality.
It's possible that long time Mac fans don't see this slow transformation on Apple's reputation and image because they're too close to the company and what it does.
Now it all depends on whether Apple can capitalise on the success they're having and translate good reputation into further sales.
Originally posted by bergz
Sorry, but, Halo Effect?
That reminds me of an old skool racing game for the PC back in the late 80s. A Formel1 variant where you could build your own tracks with loops and everything.
One of the strategies was to get enough momentum to leap from the top of one "ramp" to another and land on the downward side thus gaining a lot of speed. I once did one of those. My screen turned completely white and the engine went to full rpm. Surely it had to be a fault in the coding and I was simply stuck. I waited a minute or so and turned to something else. When I looked back at my screen I had damaged my car which was strange since I had expected I had to restart the computer.
One of the features was a third person view replay (only one person perspective while playing) where you could see your car from the side or looking down on it. Out of curiosity to how the computer had calculated my damage now that it clearly had been stuck I ran the replay. I discovered that I had hit the top of the ramp in a very steep angle and the car had flipped the nose upwards. But that had not been the reason for the malfunction. For instead of just flipping it had continued upwards really really fast and the white I had seen had been nothing but the sky. A rough judgment said it had continued for 10-15 kilometers in a straight line up before it slowed down, the car flipped nose down and reentered the ramp at an extreme speed exactly where it had left the earth.
The file with the replay had a golden time amongst the players of the game here in Denmark. Many tried to copy the act, very few succeded
I purchased an iPod not 4 weeks ago, and then turned around and ordered a 20" iMac G5 last week because of the iPod. At least it pushed me over the edge.
Eric
"For this my son was dead, and is alive again; he was lost, and is found."
I think the halo effect will slowly but surely begin to work. I'd imagine that Apple will sell over a million units in this current quarter.
Originally posted by BRussell
We need to see some actual growth in Mac market share. There have been so many of these little blips over the years - surveys say PC users love OS X! The switcher ads are a big hit! The iMac (rev. 1 2 and 3) is a huge hit, attracting PC users in droves! The G5 means Apple's performance disadvantage is over! The retail stores get millions of PC users looking at Macs!
And yet that market share number just stays flat, if not drops. I want to see that actual number increase, not just a predictor of the number.
Exactly! And why hasn't that market share increased? Because Apple brass hasn't had the balls to make it happen with lower priced desktops.
Not dirt cheap econo-box prices. Just aggressive competitive pricing.
Just imagine if Macs were to be actually priced equal to PC's with comparable specs. Coupled with the success of iPods, iTMS, and OSX, marketshare could actually move a tick up. But alas, it's Apple we're talking about.
Just imagine if Macs were to be actually priced equal to PC's with comparable specs
If by "specs" you mean just speed of CPU, buses, hdd, etc, then yes, Apple could throw out "comparable" machines at low prices. But if you take into account case design, not too many PCs are comparable at all. Think about preloaded software also.
I know these are obvious points. I know Apple could start selling a cheaply made plasticky G5 for $1,200. But they won't - and I, for one, respect them for that, market share be damned.
Originally posted by blabla
Only 200 users were asked, so the result can hardly be characterized as statistical significant. Only 1 less/more user saying he bought a mac after using the iPod would skew the reult by 0.5%.
Yes...and the the sample of 1100 (or so) people used to predict the outcome of the vote of 50 MILLION U.S. votes is statistically insignificant.
(In fact...the 200 number is actually a higher percentage than the number used for presidential election polling!)
Just looking at the number and making the assertion is simply stupid. You have to know much more about the sample, the methodolgy and the questions asked.
Hell, as a graphics pro, that's about the only thing coming out of Apple I do care about!
Cheers!
C.