PiperJaffray: iPod shuffle, Mac mini sales well ahead of expectations
Financial research firm PiperJaffray today expressed confidence in the iPod's so-called "halo-effect," following the release of new Mac sales figures. The firm also believes both iPod shuffle and Mac mini shipments greatly exceeded expectations.
"We believe the halo effect is the primary driver of upside to Mac units," said analyst Gene Munster in a research note released to clients on Thursday. His firm expects the halo effect to accelerate in 2005 as the total installed base of iPods increases from 10.3 million at the end of 2004 to an estimated 35 million by the close of 2005.
For the March quarter, PiperJaffray noted Apple shipped over 1.07 million Mac units, which beat overall Wall Street expectations of 970,000 units and the firm's individual estimate of 930,000 units.
PiperJaffray estimates the number of iPod users to reach 35 million by the end of calendar 2005, up from 10 million at the end of 2004.
"iPod unit sales were 5.3 million for the quarter, we had been modeling for 3.8 million total units," Munster wrote in the research note. Alluding to the iPod "halo effect," the analyst said an increasing iPod install base will provide Apple with "a greater scope of awareness" for various products. "It appears that this phenomenon has begun to take effect," he said.
For its outlook, Piper Jaffray believes 28 cents earnings-per-share guidance for the June quarter is conservative for two reasons. First, "Apple is gaining share with both Mac and iPod and we expect these market-share gains will continue." Second, "Apple has given conservative guidance in the last three quarters." Apple's March quarter guidance was 20 cents per share, well below the reported earnings of 34 cents.
Regarding Apple's recently-released iPod shuffle and Mac mini products, PiperJaffray said it estimates that the number of units sold greatly exceeded early projections. "We estimate total shuffle units for the March quarter were approximately 1.8m, compared to our 1.0m estimate," the firm said. An NPD metric for the month of February estimates the iPod shuffle captured a staggering 43 percent of the market share for flash-based music players, up from 0 percent in December. "We estimate total Mac mini units sold in the March quarter were 138k vs. our estimate of 50k. We believe the Mac mini is benefiting from iPod carry-over."
PiperJaffray said Apple's domination in digital music is a critical piece to the story, but the iPod should not be considered the only potential growth avenue for the company. "Indirectly, we expect iPod to continue to be a foundation for growth in other parts of Apple's business," Munster said.
Focusing on the halo effect, PiperJaffray believes iPod carry-over will impact numbers in Apple's fiscal 2005 and 2006. For the next six fiscal quarters, the firm said its Mac estimate reflect the assumption that iPod buyers who are PC owners will increasingly move to the Mac platform. "Our confidence in iPod -to- Mac carryover is based on our survey of 200 iPod users," Munster said.
PiperJaffray reiterated an Outperform rating on Apple stock, raising its price target from $50 to $52.
"We believe the halo effect is the primary driver of upside to Mac units," said analyst Gene Munster in a research note released to clients on Thursday. His firm expects the halo effect to accelerate in 2005 as the total installed base of iPods increases from 10.3 million at the end of 2004 to an estimated 35 million by the close of 2005.
For the March quarter, PiperJaffray noted Apple shipped over 1.07 million Mac units, which beat overall Wall Street expectations of 970,000 units and the firm's individual estimate of 930,000 units.
PiperJaffray estimates the number of iPod users to reach 35 million by the end of calendar 2005, up from 10 million at the end of 2004.
"iPod unit sales were 5.3 million for the quarter, we had been modeling for 3.8 million total units," Munster wrote in the research note. Alluding to the iPod "halo effect," the analyst said an increasing iPod install base will provide Apple with "a greater scope of awareness" for various products. "It appears that this phenomenon has begun to take effect," he said.
For its outlook, Piper Jaffray believes 28 cents earnings-per-share guidance for the June quarter is conservative for two reasons. First, "Apple is gaining share with both Mac and iPod and we expect these market-share gains will continue." Second, "Apple has given conservative guidance in the last three quarters." Apple's March quarter guidance was 20 cents per share, well below the reported earnings of 34 cents.
Regarding Apple's recently-released iPod shuffle and Mac mini products, PiperJaffray said it estimates that the number of units sold greatly exceeded early projections. "We estimate total shuffle units for the March quarter were approximately 1.8m, compared to our 1.0m estimate," the firm said. An NPD metric for the month of February estimates the iPod shuffle captured a staggering 43 percent of the market share for flash-based music players, up from 0 percent in December. "We estimate total Mac mini units sold in the March quarter were 138k vs. our estimate of 50k. We believe the Mac mini is benefiting from iPod carry-over."
PiperJaffray said Apple's domination in digital music is a critical piece to the story, but the iPod should not be considered the only potential growth avenue for the company. "Indirectly, we expect iPod to continue to be a foundation for growth in other parts of Apple's business," Munster said.
Focusing on the halo effect, PiperJaffray believes iPod carry-over will impact numbers in Apple's fiscal 2005 and 2006. For the next six fiscal quarters, the firm said its Mac estimate reflect the assumption that iPod buyers who are PC owners will increasingly move to the Mac platform. "Our confidence in iPod -to- Mac carryover is based on our survey of 200 iPod users," Munster said.
PiperJaffray reiterated an Outperform rating on Apple stock, raising its price target from $50 to $52.
Comments
2 iPod Shuffles
1 iPod mini
1 Mac mini
The proof is in the pudding for me. The Mac mini is an extremely important piece of hardware; it's the Cube done right. It's really a shame they didn't get it right the first time.
Originally posted by Wrong Robot
Too bad these numbers haven't been a boon on the stock yet. It sank nearly 4 points today
They could have sold double and the stock would still tank today.
The markets are depressed on unwarranted fears that the present economy might be unsustainable. The cost of oil has been dropping yet the price at the pumps keeps going up.
This is the time to buy an SUV with all the fear laden idiots buying used hybrids at costs > than new hybrids which are on back order.
Markets get a fear sense and it tanks. Long-term investors love this type of fear--it's always short-term--and mop up the markets with profits soon after the fear subsides.
If you got lemons make lemonade.
-Aqua Mac-