AmTech ups Apple estimates; Reitzes out at UBS in at Lehman

***AppleInsider*** · 03-20-2008, 04:36 PM

American Technology Research on Monday increased its estimates for Apple's soon-to-end second fiscal quarter of 2008 on better than expected Mac growth. Meanwhile, an analyst long covering Apple for UBS has been lured away by Lehman Brothers, where he'll be tasked with a similar role.

AmTech ups Apple estimates

In a research note to AmTech clients on Thursday, analyst Shaw Wu said that Apple's Mac business has thus far shown signs that it may be recession proof. In particular, sales of the new MacBook Air sub-notebook are said to have seen a resurgence after tapering off for a few weeks following initial pre-orders.

"We believe MacBook Air could represent 20 percent and as high as 25 percent of Apple's portables business," Wu wrote. "We believe there may some cannibalization with MacBook Pro and MacBook, but overall, it looks like MacBook Air has been able to expand Apple's Mac opportunity.

Although Wu had been modeling Mac unit growth to rise 38 percent year-over-year for the company's second fiscal quarter ending March, he said his latest round of checks suggest growth could come in closer to 42 percent.

iPods, however, appear to be tracking relatively flat or down in terms of yearly growth, with the analyst estimating that Apple will wind up hitting the upper-end the 9.5-10 million unit range.

"It appears that the iPod shuffle price cut is having a positive impact on units," he noted.

Meanwhile, Wu's checks within the supply chain suggest that key components such as NAND flash memory, DRAM and hard disk drives are all pricing favorably compared to last quarter, which should help drive Apple's gross margin closer to 33.5 percent, considerably above management's guidance of 32 percent.

As a result, the AmTech analyst raised his estimates for the March quarter to $1.10 in per share earnings on revenues of $7 billion, up from $1.02 on $6.9 billion, driven by sales of 2.15 million Macs, 10 million iPods, and 1.5 million iPhones.

"While near-term trends look difficult with a looming recession and a slow-down in consumer spending, we continue to believe Apple is well-positioned to weather the storm better than most with its strong fundamentals," he wrote.

Reitzes joins Lehman

In related news, Lehman Brothers said Thursday that Ben Reitzes has joined its U.S. Equity Research Department to cover the IT Hardware sector and serve as Co-Sector Head of U.S. Technology, where he'll preside over coverage of Apple.

Reitzes' arrival at the firm comes after thirteen years at UBS and PaineWebber, most recently as the senior analyst covering the IT Hardware and Imaging Technology sectors as well as the Global Coordinator of the PC sector for UBS.

Amongst his highlights while covering Apple for UBS were early but ultimately accurate predictions that the company was developing an ultra-portable notebook employing flash memory, and that the iPhone was just the start of a mega multi-touch platform aimed at spawning a vast array of new devices.

At Lehman, Reitzes will have primary oversight of the IT Hardware, Software and Imaging Technology sectors with joint oversight of the Electronics Manufacturing Systems sector.

[ View this article at AppleInsider.com ]

ncee · 03-20-2008, 05:00 PM

Yeah, what he say's

Apple will have a great year …

Apple will announce some great new products / up-dated items …

Apple stock will shoot up-wards again …

It's been awhile since we had a "Feel Good" piece about Apple … thank you,

Skip

SpamSandwich · 03-20-2008, 05:06 PM

The whole stinkin' stock market could use some "feel good" right about now...

minderbinder · 03-20-2008, 05:14 PM

Apple is back up to 133 today. Not too bad considering all the doom and gloom some have been predicting.

GQB · 03-20-2008, 05:25 PM

Whoo hoo!!!
(or is it 'Wu who?")

drjjones · 03-20-2008, 05:39 PM

Quote:

Originally Posted by GQB

Whoo hoo!!!
(or is it 'Wu who?")

That's better than boo hoo

echosonic · 03-20-2008, 06:37 PM

Oh my. Did somebody say "recession proof?"

say it again.

"recession proof".

I think I'm getting aroused.

Constable Odo · 03-20-2008, 09:03 PM

It's really strange the the MacBookAir is selling so well considering it's been panned as being an inadequate machine due to lacking so many standard notebook features. I really thought it would be a limited niche computer for the few that needed a really light machine to carry around. I do know that when I went to the Apple Cube store in Manhattan, the MBA desks had the most people around them. Users seemed to like the multi-touch mousepad.

Well, good for Apple and for me as a shareholder. You never know what's gonna turn out to be a winner.

solipsism · 03-21-2008, 01:25 AM

Quote:

Originally Posted by Constable Odo

It's really strange the the MacBookAir is selling so well considering it's been panned as being an inadequate machine due to lacking so many standard notebook features. I really thought it would be a limited niche computer for the few that needed a really light machine to carry around. I do know that when I went to the Apple Cube store in Manhattan, the MBA desks had the most people around them. Users seemed to like the multi-touch mousepad.

Well, good for Apple and for me as a shareholder. You never know what's gonna turn out to be a winner.

I thought it would be popular for an ultralight notebook, but not as much as being touted in the article. I just can't see the MBA being 20-25% of the entire notebook line. I think 10% would be a significant success for this type of machine.

hledgard · 03-21-2008, 09:43 AM

I can't see 20-25% either.

I really like the Air, but still think laptop users would much rather get the MacBook, more powerful and cheaper.

**JeffDM** · 03-21-2008, 10:42 AM

Quote:

Originally Posted by hledgard

I can't see 20-25% either.

I really like the Air, but still think laptop users would much rather get the MacBook, more powerful and cheaper.

I think most buyers would be just concerned about cheaper. MacBook is many times more powerful than is really needed in a consumer machine. For consumer use, the first constraint I see on the Air is the storage capacity, well before speed, connectivity and RAM. Even then, my parents have a computer with one USB jack, much smaller drive, much slower, a quarter the RAM and it still does the job well enough.

solipsism · 03-21-2008, 11:10 AM

Quote:

Originally Posted by JeffDM

I think most buyers would be just concerned about cheaper. MacBook is many times more powerful than is really needed in a consumer machine. For consumer use, the first constraint I see on the Air is the storage capacity, well before speed, connectivity and RAM. Even then, my parents have a computer with one USB jack, much smaller drive, much slower, a quarter the RAM and it still does the job well enough.

I would have gotten a MBA if the battery life exceeded the MB, but it's about half what I get from a single MB battery. Hopefully, those stats will change significantly in the next release.

PS: My parents are still running a desktop with 366Mhz P3 with WinXP, a 30GB HDD, and 256MB RAM. I don't even think it has USB 2.0.

anantksundaram · 03-21-2008, 06:05 PM

Quote:

Originally Posted by Constable Odo

It's really strange the the MacBookAir is selling so well .... You never know what's gonna turn out to be a winner.

Speak for yourself.

Adjei · 03-22-2008, 09:35 PM

So the MBA which was supposed to be a failure is selling well, seems Apple knows something the complainers don't.

solipsism · 03-22-2008, 09:38 PM

Quote:

Originally Posted by Adjei

So the MBA which was supposed to be a failure is selling well, seems Apple knows something the complainers don't.

It's just a hunch, but Apple might be doing a little more demographic testing of their products than the naysayers on this forum.

03-20-2008, 04:36 PM	#1
*AppleInsider* Kasper's Automated Slave Join Date: Nov 1997 Posts: 6,151	AmTech ups Apple estimates; Reitzes out at UBS in at Lehman American Technology Research on Monday increased its estimates for Apple's soon-to-end second fiscal quarter of 2008 on better than expected Mac growth. Meanwhile, an analyst long covering Apple for UBS has been lured away by Lehman Brothers, where he'll be tasked with a similar role. AmTech ups Apple estimates In a research note to AmTech clients on Thursday, analyst Shaw Wu said that Apple's Mac business has thus far shown signs that it may be recession proof. In particular, sales of the new MacBook Air sub-notebook are said to have seen a resurgence after tapering off for a few weeks following initial pre-orders. "We believe MacBook Air could represent 20 percent and as high as 25 percent of Apple's portables business," Wu wrote. "We believe there may some cannibalization with MacBook Pro and MacBook, but overall, it looks like MacBook Air has been able to expand Apple's Mac opportunity. Although Wu had been modeling Mac unit growth to rise 38 percent year-over-year for the company's second fiscal quarter ending March, he said his latest round of checks suggest growth could come in closer to 42 percent. iPods, however, appear to be tracking relatively flat or down in terms of yearly growth, with the analyst estimating that Apple will wind up hitting the upper-end the 9.5-10 million unit range. "It appears that the iPod shuffle price cut is having a positive impact on units," he noted. Meanwhile, Wu's checks within the supply chain suggest that key components such as NAND flash memory, DRAM and hard disk drives are all pricing favorably compared to last quarter, which should help drive Apple's gross margin closer to 33.5 percent, considerably above management's guidance of 32 percent. As a result, the AmTech analyst raised his estimates for the March quarter to $1.10 in per share earnings on revenues of $7 billion, up from $1.02 on $6.9 billion, driven by sales of 2.15 million Macs, 10 million iPods, and 1.5 million iPhones. "While near-term trends look difficult with a looming recession and a slow-down in consumer spending, we continue to believe Apple is well-positioned to weather the storm better than most with its strong fundamentals," he wrote. Reitzes joins Lehman In related news, Lehman Brothers said Thursday that Ben Reitzes has joined its U.S. Equity Research Department to cover the IT Hardware sector and serve as Co-Sector Head of U.S. Technology, where he'll preside over coverage of Apple. Reitzes' arrival at the firm comes after thirteen years at UBS and PaineWebber, most recently as the senior analyst covering the IT Hardware and Imaging Technology sectors as well as the Global Coordinator of the PC sector for UBS. Amongst his highlights while covering Apple for UBS were early but ultimately accurate predictions that the company was developing an ultra-portable notebook employing flash memory, and that the iPhone was just the start of a mega multi-touch platform aimed at spawning a vast array of new devices. At Lehman, Reitzes will have primary oversight of the IT Hardware, Software and Imaging Technology sectors with joint oversight of the Electronics Manufacturing Systems sector. [ View this article at AppleInsider.com ]

03-20-2008, 05:06 PM	#3
SpamSandwich Registered User Join Date: May 2005 Posts: 8,453	The whole stinkin' stock market could use some "feel good" right about now... "The natural progress of things is for liberty to yield, and government to gain ground." —Thomas Jefferson Proud AAPL stock owner.

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03-20-2008, 05:00 PM	#2
ncee Registered User Join Date: Sep 2005 Location: New England Posts: 480	Yeah, what he say's Apple will have a great year … Apple will announce some great new products / up-dated items … Apple stock will shoot up-wards again … It's been awhile since we had a "Feel Good" piece about Apple … thank you, Skip

03-20-2008, 05:14 PM	#4
minderbinder Registered User Join Date: Jan 2006 Posts: 1,395	Apple is back up to 133 today. Not too bad considering all the doom and gloom some have been predicting.

03-20-2008, 05:25 PM	#5
GQB Registered User Join Date: Mar 2007 Posts: 728	Whoo hoo!!! (or is it 'Wu who?")

03-20-2008, 06:37 PM	#7
echosonic Registered User Join Date: Oct 2007 Location: Los Angeles, Kahleefornyah Posts: 226	Oh my. Did somebody say "recession proof?" say it again. "recession proof". I think I'm getting aroused.

03-20-2008, 09:03 PM	#8
Constable Odo Registered User Join Date: Sep 2007 Posts: 160	It's really strange the the MacBookAir is selling so well considering it's been panned as being an inadequate machine due to lacking so many standard notebook features. I really thought it would be a limited niche computer for the few that needed a really light machine to carry around. I do know that when I went to the Apple Cube store in Manhattan, the MBA desks had the most people around them. Users seemed to like the multi-touch mousepad. Well, good for Apple and for me as a shareholder. You never know what's gonna turn out to be a winner.

03-21-2008, 09:43 AM	#10
hledgard Registered User Join Date: Dec 2001 Location: Ohio Posts: 194	I can't see 20-25% either. I really like the Air, but still think laptop users would much rather get the MacBook, more powerful and cheaper.

03-22-2008, 09:35 PM	#14
Adjei Registered User Join Date: Jul 2007 Posts: 733	So the MBA which was supposed to be a failure is selling well, seems Apple knows something the complainers don't.

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