iPod Hi-Fi and low-end iPods selling well, says analyst
Apple Computer's new iPod Hi-Fi audio system as well as its lower-end iPod digital music players are selling well enough for one analyst to increase his estimates for the company's current fiscal quarter, which ends in March.
"Recently, there has been renewed speculation regarding iPod production and demand," Shaw Wu, an analyst for American Technology Research wrote in a research note to clients on Friday. "We wanted to offer insight from our proprietary checks with industry and channel sources, but also some perspective on high consensus estimates that remain well above Apple's guidance."
The analyst says demand for iPods is coming in ahead of his firm's previous expectations, with iPod shuffles and 1GB nanos generating incremental demand, particularly in non-Apple channels. Additionally, Wu said checks indicate that the new iPod Hi-Fi audio system is seeing strong initial sales and fifth-generation video iPods also continue to sell well above seasonal trends, down only modestly from the December holiday quarter.
"As a result, we are raising both our March quarter estimates and iPod unit forecast (though we remain below consensus)," the analyst wrote. He now predicts Apple will generate $4.43 billion in revenue on 43 cents earnings-per-share (EPS) and sell 8.8 million iPods. These figures are up from $4.3 billion, 38 cents and 7.7 million iPods.
Wu notes that his new estimates are well above Apple's guidance of $4.3 billion and 38 cents, but below consensus estimates of $4.6 billion, 44 cents and 9.5 million iPods.
"At this point, our main concern with Apple is note its fundamentals but rather the disconnect between Apple stock ratings and consensus estimates; this has helped create artificially high estimates, leaving little room for upside surprises, if not hope for a downside surprise," the analyst wrote. "Despite all the negative commentary on Apple (literally over the past two and a half years) and Apple's attempts to reset expectations, consensus estimates remain well above Apple's guidance (which ironically should spur more bullish commentary)."
Nevertheless, AmTech research sees the risk-reward on Apple shares attractive now trading at 25 times the firm's 2007 calendar year EPS of $2.60.
"We remain firm believers that the move to digital entertainment is a multi-year trend and that Apple is the best-positioned company to capitalize with its unique and defendable iPod + iTunes and Mac franchises," the firm said.
"Recently, there has been renewed speculation regarding iPod production and demand," Shaw Wu, an analyst for American Technology Research wrote in a research note to clients on Friday. "We wanted to offer insight from our proprietary checks with industry and channel sources, but also some perspective on high consensus estimates that remain well above Apple's guidance."
The analyst says demand for iPods is coming in ahead of his firm's previous expectations, with iPod shuffles and 1GB nanos generating incremental demand, particularly in non-Apple channels. Additionally, Wu said checks indicate that the new iPod Hi-Fi audio system is seeing strong initial sales and fifth-generation video iPods also continue to sell well above seasonal trends, down only modestly from the December holiday quarter.
"As a result, we are raising both our March quarter estimates and iPod unit forecast (though we remain below consensus)," the analyst wrote. He now predicts Apple will generate $4.43 billion in revenue on 43 cents earnings-per-share (EPS) and sell 8.8 million iPods. These figures are up from $4.3 billion, 38 cents and 7.7 million iPods.
Wu notes that his new estimates are well above Apple's guidance of $4.3 billion and 38 cents, but below consensus estimates of $4.6 billion, 44 cents and 9.5 million iPods.
"At this point, our main concern with Apple is note its fundamentals but rather the disconnect between Apple stock ratings and consensus estimates; this has helped create artificially high estimates, leaving little room for upside surprises, if not hope for a downside surprise," the analyst wrote. "Despite all the negative commentary on Apple (literally over the past two and a half years) and Apple's attempts to reset expectations, consensus estimates remain well above Apple's guidance (which ironically should spur more bullish commentary)."
Nevertheless, AmTech research sees the risk-reward on Apple shares attractive now trading at 25 times the firm's 2007 calendar year EPS of $2.60.
"We remain firm believers that the move to digital entertainment is a multi-year trend and that Apple is the best-positioned company to capitalize with its unique and defendable iPod + iTunes and Mac franchises," the firm said.
Comments
What does blow my mind is how steady iPod sales remain. I honestly expected the bubble to burst on the iPod, but I have consistently been pleasantly surprised at how sales have remained steady or continued to grow. Way to go, Apple!
As for the iPod Hi-Fi, I think those sales will level off shortly after all the iPod fanatics have gotten their fill.
It's the best and easiest piece of tech. to use in the world. It's intuitive, simple and still manages to be sexy and cool!
Apple is in a position to be now, very, very popular in the computer market, and rightly so, but in all sorts of other markets aswell. !n 5 years Apple will be the new Sony. It's already the best computer maker in the world, and streets ahead of everyone else.
That's 4X for my shares now, soon to be 5X. (April 1st)
Originally posted by farshad
How long did Sony sell the walkman? I suspect the Ipod will sell well for at least that long.
It really depends on how long Apple can keep refreshing it to maintain a desirable product. Supposedly Sony dropped the ball in that regard, the competition eventually caught up with them in many ways. The electronics market seems to be changing a lot quicker now than it was when the Walkman was released.
Originally posted by JeffDM
It really depends on how long Apple can keep refreshing it to maintain a desirable product. Supposedly Sony dropped the ball in that regard, the competition eventually caught up with them in many ways. The electronics market seems to be changing a lot quicker now than it was when the Walkman was released.
Differentiation of price points (iPod, nano, shuffle, whatever's next) and brand extension (HiFi) could keep Apple going for many fruitful quarters to come.
Originally posted by Porchland
Differentiation of price points (iPod, nano, shuffle, whatever's next) and brand extension (HiFi) could keep Apple going for many fruitful quarters to come.
I want my Ipod HiFi soon, no, i need one.
As long as Apple is able to create some
certain need...
That's where Apple holds all the cards, and they know it.
I'm still amazed that there are articles appearing about the next "iPod killer" that can't seem to grasp the obvious fact that the iPod is just the front end of a continuously evolving system, and until someone can better that system there is simply no way to win, no matter how nice the interface, how slender the form factor or how long the battery life.
As a side note, I had to smile when this morning when about four articles in row on MacSurfer alternated between "analysts raise target price on continuing iPod sales growth" and "analysts downgrade Apple performance on decreasing iPod sales".
Gotta love the analysts.
The whole Amazon thing is interesting though...
The iPod started out as an open system ( MP3 ) and is slowly moving its way towards being closed.
I think the iPod has many years left in it, and its downfall will be found in its failure to remain open. If Apple are smart they will acknowledge that the iPod requires a diverse eco system to remain top dog and keep it open. I believe that Apple will see short term opportunities to encroach on the iPod system and slowly close it down ( witness accessory licensing, and Apple made accessories ). I hope that Apple have set themselves a goal of getting out of the iPod hardware business, and plan to live off of the licensing fees they can get out of a robust, self sustaining iPod economy,
Originally posted by addabox
I'm still amazed that there are articles appearing about the next "iPod killer" that can't seem to grasp the obvious fact that the iPod is just the front end of a continuously evolving system, and until someone can better that system there is simply no way to win, no matter how nice the interface, how slender the form factor or how long the battery life.
Microsoft is the only other company that has a ready to go ecosystem if it could ever organize it well, and that is my main "fear" for Apple.
Originally posted by mmmpie
The Walkman started out as an open system ( audio cassette ) and eventually migrated to a closed system ( ATRAC mini disc ) and died.
The iPod started out as an open system ( MP3 ) and is slowly moving its way towards being closed.
I think the iPod has many years left in it, and its downfall will be found in its failure to remain open. If Apple are smart they will acknowledge that the iPod requires a diverse eco system to remain top dog and keep it open. I believe that Apple will see short term opportunities to encroach on the iPod system and slowly close it down ( witness accessory licensing, and Apple made accessories ). I hope that Apple have set themselves a goal of getting out of the iPod hardware business, and plan to live off of the licensing fees they can get out of a robust, self sustaining iPod economy,
And regarding the ecosystem, I hope they open the software ecosystem to the same extent as the hardware is now. Meaning, I hope that the iPod interface becomes such the standard (like MS keeps attempting with its proprietary stuff) that it will treat it like an OS that it will allow others to create apps for. Same with Front Row. I want every media company in the world to be able to put their programs in the Movies, Music, etc. part of Front Row. By default that is how the DVD selection works. DVD's aren't "Apple only."
You just pop in your iPod, no need to turn on your computer.
My main problem with this product, and the only reason I didn't get one to replace my sony sterio in my kitchen, is that there is no RADIO!!!
If they get enough feedback from people who want a built in RADIO option I hope the add that feature in 2G!
p.s. also total control over everything with remote, no need to touch iPod for any reason at all. On a more positive note, my friend has the hi-fi and they sound really great!!
Originally posted by Ireland
I agree about the hi-fi been limited, but forget about streaming music etc.
You just pop in your iPod, no need to turn on your computer.
My main problem with this product, and the only reason I didn't get one to replace my sony sterio in my kitchen, is that there is no RADIO!!!
If they get enough feedback from people who want a built in RADIO option I hope the add that feature in 2G!
p.s. also total control over everything with remote, no need to touch iPod for any reason at all. On a more positive note, my friend has the hi-fi and they sound really great!!
Well, you could get one of the new iPod wired remotes that add radio functionality, I assume that would play back through the iPod Hi Fi just like a playlist.
Wonder if there's any way to get the HiFi remote to control the radio , though?
Originally posted by addabox
Well, you could get one of the new iPod wired remotes that add radio functionality, I assume that would play back through the iPod Hi Fi just like a playlist.
Wonder if there's any way to get the HiFi remote to control the radio , though?
The Radio remote uses the dock connector, so no cigar