BofA ups Apple target on outlook for fiscal 2008

[AppleInsider]

Prior to the weekend, Bank of America Securities increased its price target on shares of Apple Computer to $93 from $84, citing expectations of strong growth in the company's notebook segment during the 2008 fiscal year.

In a research note to clients on Thursday, analyst Keith Bachman estimated the Cupertino, Calif.-based Mac maker would see notebook unit growth of 20 percent in fiscal 2008, but more modest gains for desktops and iPod digital music players.

"We projected only modest growth in iPod, 12 percent unit growth since we believe that market saturation issues will continue to work against Apple combined with Apple's weight to the US market," the analyst wrote. "We believe that CPU growth will be the key driver for Apple's revenues and we project 20 percent notebook unit growth and 3 percent desktop growth."

Bachman expects that one of the key drivers for Apple will come in an improved version of its Boot Camp software, which will make it easier for users to run Windows in parallel under its upcoming Leopard operating system. The analyst believes such a move would make it more compelling for users to switch from Windows to to the Mac and improved global penetration.

"Apple sales are primarily US, Western Europe and Japan, while most of the unit growth is outside of these markets," he wrote.

In easing into his predictions for the 2008 fiscal year, Bachman said initiated his Apple-branded cell phone model with expectations that the company could sell 3.9 million handsets in fiscal 2007 and 6.7 million in FY08. His analysis assume that Apple could captured a 5 - 8 percent share of two wireless carriers in in fiscal 2007 and expand on that relationship to an additional two carriers in fiscal 2008.

"Since we have yet to see the product, our forecast on handsets has the most volatility, both up and down," Bachman told clients. "Our concern is that Street expectations are well ahead of Apple’s ability to deliver against these expectations." He sees the first handsets from Apple retailing for about $350 a piece, with a gradual decline to $300 by fiscal 2008. He expects Apple to pocket a quarter of the phones' retail cost as its gross margin.

Meanwhile, the analyst's first pass at 2008 Apple estimates also includes a new item dubbed "Other Media" which he expects will generate $140 million in 2007 and $240 million in 2008 from sales of products like iTV and potentially an Apple branded TV.

Overall, Bachman estimates Apple will generate sales of $26.9 billion and per-share earnings of $3.25 in fiscal 2008.

[ View this article at AppleInsider.com ]

[orange whip]

but it's already been to 93.....

[Clive At Five]

Originally Posted by orange whip

but it's already been to 93.....

Yeah........ but it's better than $84

Besides, "Target Price" is the level at which the firm believes that the stock value will level out. It will likely bump around higher than that but will settle on $93 according to BofA.

-Clive

[aross99]

Interesting that they are projecting penetration into two phone carriers initially, and then two more later on. Makes me wonder if there is a chance for a CDMA version in addition to GSM?

The initial two carriers would probably be Cingular and T-Mobile with a GSM handset. After that, maybe they will go after Verizon and Sprint with a CDMA version?

Very interesting...

[Ireland]

I know an Apple branded TV is coming, it's that simple I just know it. All the pieces are in place, it will happen. To those who think I'm wrong, I'm sorry to break it to you, but you're the ones that are wrong. If you think Apple wont come out with a TV in the next two years, you mustn't be aware where Apple is going with all this media.

1. iTV
2. iPhone with ringtones sold on iTunes.
3. Apple TV service.
4. Apple licences iTV technologies to the top TV makers.
5. Apple quits making iTV and makes thier own TV with iTV built-in.

1 by 1 the stars align.

[vinney57]

These analysts are so clever... such insight.

[vinney57]

I think you are wrong

[backtomac]

Their expectations fro an iPhone seem low to me. Maybe I'm wrong. If they only sell 4 million phones in next year that will seem like a failure.

[monkeyastronaut]

Originally Posted by Ireland

I know an Apple branded TV is coming, it's that simple I just know it. All the pieces are in place, it will happen. To those who think I'm wrong, I'm sorry to break it to you, but you're the ones that are wrong.

hmm i dont see it. tvs aren't that hard to figure out. i could think of a few other things cupertino would deliver before selling an apple branded tv. a subnotebook/tablet, a pda/mini tablet, a camera. and even these seem unlikely in the short term (< 3 years) except for maybe the subnotebook.

it's just my feeling, i could be wrong.

[Ireland]

Originally Posted by monkeyastronaut

hmm i dont see it. tvs aren't that hard to figure out. i could think of a few other things cupertino would deliver before selling an apple branded tv. a subnotebook/tablet, a pda/mini tablet, a camera. and even these seem unlikely in the short term (< 3 years) except for maybe the subnotebook.

it's just my feeling, i could be wrong.

There's a good chance we'll see that subnotebook/tablet at Macworld. Even if they didn't start the designing of a TV, they've still got two years to prove me right.

[Ireland]

Originally Posted by vinney57

I think you are wrong

I think I'm right, and I feel very strongly about this TV thing. I can see coming a mile away, like a big articulated truck. To me it just seems sooo obvious it's a given.

[willrob]

But Apple has clearly stated they will not make a TV.

[SoopaDrive]

I agree, TVs are not in Apple's future.

[Ireland]

Originally Posted by willrob

But Apple has clearly stated they will not make a TV.

Just liked they clearly stated they'd never make a mobile phone, just like they clearly stated they'd never add video to the iPod, just like the say one thing and then go off and pull the other leg, like they have been doing for years.

They have patents for universal remotes, they have patents for surround sound systems, they've patent for wireless speakers, but no.. they'd never lose it altogether and build a TV, no way, that's just crazy talk. Next thing you know they'll be making Hifi systems for the iPod - a computer company... among other things.

[Clive At Five]

Originally Posted by Ireland

I know an Apple branded TV is coming, it's that simple I just know it. All the pieces are in place, it will happen. To those who think I'm wrong, I'm sorry to break it to you, but you're the ones that are wrong. If you think Apple wont come out with a TV in the next two years, you mustn't be aware where Apple is going with all this media.

Uh.... I'm'a have to say 'no' on this one.

Yes, I agree that Apple is attempting to conquor the livingroom, but redesigning the TV is not the way to do it. The TV is mastered technology. Sure there are ever-changing formats and increasing quality and what-not, but really, there isn't anything new that Apple could bring to the table, nor is there anything unintuitive that Apple could "tame."

Cell phones are a different story. No one likes their cell-phone... it's an arena that Apple can enter and change. Same thing with the music-player industry 5 years ago.

"iTV" (hereafter referred to as "TelePort") is a new technology, yes, but it's so small that it makes TV integration nearly irrelevant. Why pay to integrate it when's half the size of a MacMini? You could literally hide the thing behind the TV if you don't like the looks of it.

If you're looking for a complete digital media system, you will soon (1-3 years) be able to find HD-DVD or Blu-Ray players with a similar footprint as TelePort, or perhaps Apple will even encorporate that into future generations of it. As for DVD, the aforementioned players will likely support DVD reading as well. And need I even mention VHS? If you need a VHS player, you've got bigger issues than controling a cluttered TV-Media center.

So with a TV, tell me again what Apple can do better than everyone else? OR Tell me what's wrong with a 6" x 6" x 1.5" box for streaming digital media (and possibly playing optical content) from your computer? If you can give me a resonable answer to either of these questions, I will consider an Apple-branded TV with a little more seriousness. Until then, I'll stick with my TV, small DVD player, and future TelePort... and I'll be totally happy with it.

-Clive

[Johnny Mozzarella]

Originally Posted by willrob

But Apple has clearly stated they will not make a TV.

Apple's CFO said Apple is not interested in sub $500 computer market...
A few weeks later they introduced the Mac mini for $499

Apple's CEO says consumers aren't interested in watching video on small portable screens...
Apple introduces iPod that allows consumers to watch video on a small portable screen

The fact is that Apple HAS NOT said they will not make a TV.
The reality is that it is well know that Steve Jobs personally hates TVs.
But as a business man with major interests in both Disney and Apple, he wants to transform TV from being the Boob-Tube into the Goo-Tube.

Apple ignited the personal computer revolution in the 1970s with the Apple II, reinvented the personal computer in the 1980s with the Macintosh, sat on it's ass in the 1990s and revolutionized the music and TV industries through seamless digital distribution in the 2000s.

[Ireland]

Originally Posted by Clive At Five

So with a TV, tell me again what Apple can do better than everyone else? OR Tell me what's wrong with a 6" x 6" x 1.5" box for streaming digital media (and possibly playing optical content) from your computer? If you can give me a resonable answer to either of these questions, I will consider an Apple-branded TV with a little more seriousness. Until then, I'll stick with my TV, small DVD player, and future TelePort... and I'll be totally happy with it.

-Clive

You'll stick with how many devices? You'll stick with how many remotes? You'll stick with what kind of interfaces?

[Ireland]

One TV, one remote, one easy-to-use cool interface, Apple styling, Apple engineering, seemless integration with Apple's iPhones, iPod with video, wireless Apple remotes......Apple TV service. Simplification, integration and ease-of-use. The true "all-in-one" package, it's that simple.

Yo Billy, what kind of a set-up have you at home? I have a Sony Bravia TV, I have a Sky digital set-top-box, I have a Panasonic VCR player, and a bunch of cool remotes. I also have a Dell demension desktop with a cool looking tower, big sure, but cool. And a Sony PS3. Why what do you have in your house Bobby?

Well Billy, I have an Apple TV, a PS3, an iMac, and a little remote.

I'm sorry to hear that Bobby, I mean, I've got a lot more than you do.

Don't worry about it Billy, I'll survive ()

[SpamSandwich]

Uh... gee. They are really going out on a limb on this one.

[Clive At Five]

Originally Posted by Ireland

You'll stick with how many devices? You'll stick with how many remotes? You'll stick with what kind of interfaces?

Devices: Three, two of which, I'll never physically touch once they are set up (TV and TelePort) which leaves one which I might have to press the "Open Tray" button on whenever I want to watch a movie, but that's not much of a burden. Still, the same will be true if your integrated TV has a physical media reader... unless it's a slot-loader. Neverless, it's one button and, thus, irrelevant to argue the complexity of it. Yours has the advantage of aesthetic simplicity but my system has the distinct advantage of customizability. I would be able to choose hardware that meets my demands and desires. You will not.

Remotes: Just about every piece of IR-sensing equipment will respond to a universal remote. Apple would be fooling themselves by thinking they wouldn't need universal Remote Support in TelePort, especially in the early stages. People will want to control all their devices with one remote, including TelePort.

Scenario 1: TelePort has Universal Remote Support. You use your Apple remote to control your TelePort and your TV and other remotes for DVD/stereo, (meaning YOU'RE the one who ends up with extra remotes) OR you do the same as me and get a universal remote to control TV, TelePort, DVD player, Stereo, etc.

Scenario 2: Teleport has no Universal Remote Support. You use your Apple remote to control your TelePort and your TV and other remotes for DVD/stereo, (again implying that you have multiple remotes). I, however, have a remote for my TelePort, and a universal remote for the rest. Again we come out equal.

Interface: Switching between devices? There's a little button called "Input" which I can use to switch devices from the comfort of my easychair. It's no hassle. Plus, there's no interface to worry about when playing DVDs or watching TV. It's just on or off.

The point is that for every argument as to why an Apple TV would work, there is an equally viable argument as to why it doesn't need to. In philosophy, there's a thing called "Occam's Razor" which states that out of two arguments explaining identical things wins, the simplest wins.

The TV is simple, the DVD player is simple, and presumably TelePort is simple. With RCA connectivity, linking the three couldn't be easier. Add a universal remote and the system is streamlined. Sure, an Apple-branded system would have all-in-one elegance and ease of use, but it's arguable that it will actually be easier to use, or more intuitive than exsisting solutions. Plus, it's almost guaranteed that it will not be a complete solution. Whereas a TV/stereo shared speaker setup can include DVD, VHS, Tapes, Records, 8-Tracks, CDs and some even UBS keychain media (for those with eclectic music/video collections), an Apple-branded solution most likely won't and, thus, would require add-ons, just like a normal system. That means you'd end up with, basically, an equally-complicated system.

An Apple TV is a very small market for the few who want (and ONLY want) a TV, a TelePort, and *MAYBE* a DVD/HD-DVD/Blu-Ray reader. As common as those three items are (or will be), I think you will be hard-pressed to find a household that will want that exact setup.

-Clive

[melgross]

Originally Posted by aross99

Interesting that they are projecting penetration into two phone carriers initially, and then two more later on. Makes me wonder if there is a chance for a CDMA version in addition to GSM?

The initial two carriers would probably be Cingular and T-Mobile with a GSM handset. After that, maybe they will go after Verizon and Sprint with a CDMA version?

Very interesting...

According to reports, Apple making both versions, with about two thirds scheduled to be GSM.

[melgross]

Originally Posted by willrob

But Apple has clearly stated they will not make a TV.

Apple has a history, with Jobs, of stating that they won't do a lot of things, and then turning around and doing them.

The Mini was one, the video iPod was another. Less spectacular, is the FM tuning accessory, after Jobs said that almost none of Apple's customers were asking for FM.

If Apple decides that there is enough call for one, they will make one. They have to figure out a way to add value. Hp has a set with the router sitting on the back panel. It does what the iTv and a Tv will do. It's a bit clumsy though. With the iTv, it would seem as though Apple is forgoing that idea.

But, Apple would sell Tv's if they have their styling, high quality, and their logo.

[melgross]

Originally Posted by Clive At Five

Uh.... I'm'a have to say 'no' on this one.

Yes, I agree that Apple is attempting to conquor the livingroom, but redesigning the TV is not the way to do it. The TV is mastered technology. Sure there are ever-changing formats and increasing quality and what-not, but really, there isn't anything new that Apple could bring to the table, nor is there anything unintuitive that Apple could "tame."

Cell phones are a different story. No one likes their cell-phone... it's an arena that Apple can enter and change. Same thing with the music-player industry 5 years ago.

"iTV" (hereafter referred to as "TelePort") is a new technology, yes, but it's so small that it makes TV integration nearly irrelevant. Why pay to integrate it when's half the size of a MacMini? You could literally hide the thing behind the TV if you don't like the looks of it.

If you're looking for a complete digital media system, you will soon (1-3 years) be able to find HD-DVD or Blu-Ray players with a similar footprint as TelePort, or perhaps Apple will even encorporate that into future generations of it. As for DVD, the aforementioned players will likely support DVD reading as well. And need I even mention VHS? If you need a VHS player, you've got bigger issues than controling a cluttered TV-Media center.

So with a TV, tell me again what Apple can do better than everyone else? OR Tell me what's wrong with a 6" x 6" x 1.5" box for streaming digital media (and possibly playing optical content) from your computer? If you can give me a resonable answer to either of these questions, I will consider an Apple-branded TV with a little more seriousness. Until then, I'll stick with my TV, small DVD player, and future TelePort... and I'll be totally happy with it.

-Clive

It's amazing just how shortsighted some of you guys here are.

[Clive At Five]

Originally Posted by melgross

It's amazing just how shortsighted some of you guys here are.

You can't just say that and not state an argument!

I'm not a nay-sayer on much, but on this topic, I have my doubts... and I gave sufficient reasons as to why I do. I'm not short-sighted. I just don't think there's a whole lot that Apple can bring to the table besides their "set-top" box. It's so tiny as it is... why do you need it integrated into a television that may or may not suit your needs?

Instead of calling me short-sided, how about you stick up for your beliefs?

-Clive

[backtomac]

There's gonna be a fight!

[Ireland]

Pass the carrots.

[Ireland]

Originally Posted by melgross

Apple would sell Tv's if they have their styling, high quality, and their logo.

Not to mention built-in iTV/Teleport and a small hard drive to boot. They would sell a heap of them, and they know that.

Bang in a side-load slot-load Blu-Ray player (when they come down a bit), and you've got one hell of a powerful, slick set-up.

You can also bet that being Apple the display would be extra-thin... hell they could even go a step furthur and make it SED.

"Toshiba's final versions of SEDs will ship with a contrast ratio of 100,000:1. Exceptional 1ms response time. Brightness of 450 nits, & 180 degree viewing angle."

or they could use Clive's advice and build toasters instead

[melgross]

Originally Posted by Clive At Five

You can't just say that and not state an argument!

I'm not a nay-sayer on much, but on this topic, I have my doubts... and I gave sufficient reasons as to why I do. I'm not short-sighted. I just don't think there's a whole lot that Apple can bring to the table besides their "set-top" box. It's so tiny as it is... why do you need it integrated into a television that may or may not suit your needs?

Instead of calling me short-sided, how about you stick up for your beliefs?

-Clive

I have. Several times. Read the posts back and you'll see.

Too many people don't bother to read all of the posts before making statements.

[melgross]

Originally Posted by Ireland

Not to mention built-in iTV/Teleport and a small hard drive to boot. They would sell a heap of them, and they know that.

Bang in a side-load slot-load Blu-Ray player (when they come down a bit), and you've got one hell of a powerful, slick set-up.

You can also bet that being Apple the display would be extra-thin... hell they could even go a step furthur and make it SED.

"Toshiba's final versions of SEDs will ship with a contrast ratio of 100,000:1. Exceptional 1ms response time. Brightness of 450 nits, & 180 degree viewing angle."

or they could use Clive's advice and build toasters instead

I agree. Apple just has to do it better, and make it look nicer.

Another thing I've brought up in several threads, is that people want to buy turnkey systems these days.

An entire system from one manufacturer, integrated in looks and functionality.

We're seeing that even in the high end of the audio/video market. Friends who manufacturer expensive products are branching out into areas they never bothered with before, because their customers are asking them for the entire package.

I can easily see Apple doing the same thing. It's a way to pull in a LOT more cash from a customer. The customer gets the advantage of the integrated style, and the assurance that everything will work properly together, instead of having to be personally responsible for it themselves.

Apple could be waiting for better display technology. There are several types expected in a year or two. But, I'm not sure they would wait two years, maybe not even one.

[Johnny Mozzarella]

Originally Posted by melgross

I agree. Apple just has to do it better, and make it look nicer.

Another thing I've brought up in several threads, is that people want to buy turnkey systems these days.

An entire system from one manufacturer, integrated in looks and functionality.

We're seeing that even in the high end of the audio/video market. Friends who manufacturer expensive products are branching out into areas they never bothered with before, because their customers are asking them for the entire package.

I can easily see Apple doing the same thing. It's a way to pull in a LOT more cash from a customer. The customer gets the advantage of the integrated style, and the assurance that everything will work properly together, instead of having to be personally responsible for it themselves.

Apple could be waiting for better display technology. There are several types expected in a year or two. But, I'm not sure they would wait two years, maybe not even one.

I agree with melgross, the rest of the industry doesn't get it.
There is a huge untapped market of people who want a home theater experience.
Unfortunately when you walk into Best Buy and start trying to figure out all the options and how it fits together, most people will give up and just buy something they CAN hook up.

If Apple made a home theater in a box that was simple and anyone could set up it would sell like iPods(hot-cakes have been deprecated).

[Zandros]

Originally Posted by Ireland

I know an Apple branded TV is coming, it's that simple I just know it.

1 by 1 the stars align.

Is this where we say "hello, Rolo"?

[GregAlexander]

I'm of 2 minds about the "Apple TV" (or "Apple Amp" for that matter). Apple has the pieces to make a TV reasonably easily. But I'd rather see them work with any TV (and Amp) out there.

An iTV and a universal remote would seem to be the easiest entry points for Apple. The iTV is Apple's doorway to selling content of course. The universal remote is a chance to make the many hodge-podge systems work easily... if Apple can do it. Iin my experience, most universal remotes make assumptions about the devices, and end up with missing buttons, or buttons that do nothing. Apple needs to go one better, the only thing I can think of is either a touch screen remote, or a remote with buttons that can change their labels (as Apple patented recently) - either option would need to have a REALLY nice programming/setup environment on the computer.

Originally Posted by Ireland

3. Apple TV service.

What are you thinking here? I assume you mean a payTV substitute? .... Even within that, do you mean more purchasing from iTMS? Rental videos via iTMS? A streaming PayTV service? A subscription service that lets you download ("record") any show shown on PayTV in the last day?

I think a service that LOOKS like the TiVO but downloads the shows when you select them instead of recording them (thus removing problems with slower connections) - would be great. Add in
1) video rental
2) video puchasing
3) watch/record local digital FTA channels
4) streaming channels at best available quality (from CNN to YouTube, I guess)
And you'd have one hell of a product
Especially in countries where cable has few competitors and lower market penetration.

[Ireland]

Originally Posted by GregAlexander

What are you thinking here? I assume you mean a payTV substitute? .... Even within that, do you mean more purchasing from iTMS? Rental videos via iTMS? A streaming PayTV service? A subscription service that lets you download ("record") any show shown on PayTV in the last day?

I'm thinking something rather simple to start with. You must own an iTV. Then you get video podcasts and you get GooTube stuff all for free, which is great. Then for TV shows, here they could do a very simple but clever thing. They could do two or three packages: Pack 1, you get a chance to subscribe to 5 shows (full series), and you get another say 20 shows to choose from as you wish every week or so, (you must watch more than half the show for it to count, they'll think of a clever way of doing this, so you can't fool them). Pack 2, you get 10 full series subscriptions, and again another 20 as you wish every week. Pack 3, you can watch and subscribe to what you wish. Once you pay for Pack three you can do whay you want.

I don't know what TV costs in the states, but suffice to say if you pay 1 Unit for Pack 1, you pay 1.5Units for pack two, and 2 Units for pack 3, you can upgrade or downgrade to any of the packs you like, anytime.

[jasenj1]

I think they'll do an LED projector.

- Jasen.

[Ireland]

Originally Posted by jasenj1

I think they'll do an LED projector.

- Jasen.

No, TV.

They already do speakers (for iPod), they're doing iTV. They make computers with LCD's. They want us to connect out computer to our TV's through wireless (probably 802.11n) using a product they're making. They're starting to offer movies for download. Next logical step, Apple makes TV's.

Here's how I think they'll start into TV's:
They'll make them in black (only).
They'll give them minimal, sleek styling.
They're going to have decent sound (Appe knows this is important with HD downloads coming in the future etc, todays broadband is too slow IMO).
They'll make two or three sizes: 32" & 36".... or 32", 36" & 42" (Hardware 1.0)

[melgross]

Originally Posted by Ireland

No, TV.

They already do speakers (for iPod), they're doing iTV. They make computers with LCD's. They want us to connect out computer to our TV's through wireless (probably 802.11n) using a product they're making. They're starting to offer movies for download. Next logical step, Apple makes TV's.

Here's how I think they'll start into TV's:
They'll make them in black (only).
They'll give them minimal, sleek styling.
They're going to have decent sound (Appe knows this is important with HD downloads coming in the future etc, todays broadband is too slow IMO).
They'll make two or three sizes: 32" & 36".... or 32", 36" & 42" (Hardware 1.0)

I have to agree. Good 1080p front projectors are still over $10,000.

And, while there two LED rear projector DLP models, they are fairly small right now, and expensive for their size.

[Ireland]

Originally Posted by melgross

I have to agree. Good 1080p front projectors are still over $10,000.

And, while there two LED rear projector DLP models, they are fairly small right now, and expensive for their size.

It wouldn't matter if they cost $500, the mainstream would never adopt projectors at this point in time. If they release them before 2008 they will definitely be LCD. If they release them later, they may be SED or some other revelotionary technology. One thing is certain they'll be different, iTV built-in, Apple styling, and Apple quality would be enough to give them the edge IMO.