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CSFB upgrades Apple, says company now catering to 100% of PC market

post #1 of 11
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Credit Suisse First Boston this morning upgraded Apple from "neutral" to "outperform" on the belief that the company's next major boost will come from its success in the PC market, having just completed its second consecutive quarter of share gain.

In a report released to clients today, the research and investment firm said it expects the iPod to continue to deliver strong growth, but its position as the leader in both flash and drive-based digital music players will eventually be limited by the growth of the music player market.

However, analyst Robert Semple noted that in the PC market Apples 2% share has significant upside opportunity regardless of market growth. "Until the Jan 11th release of Mac mini, we estimate Apple only addressed 22% of the desktop PC market excluding its niche-focused eMac," the analyst said. "Today, Apples portfolio reaches almost 100% of the market."

While the iPod has enjoyed 486% growth over the past twelve months, generating gross margin of approximately 20%, Semple believes Apple's iTunes and iPod accessories businesses, despite generating lower revenue figures than the iPod hardware, will also help to drive Apple's future profits. He believes this dynamic will offset lower gross margins associated with Apple's shift to consumer products including iMac, Mac mini, and iPod.

Semple also expects Mac OS X 10.4 Tiger will be Apple's most popular OS X iteration to date. "Apple has broken records with each of its two previous updates (Jaguar and Panther), with Panther recording revenue of $60+ million in its first quarter, which we expect Tiger to easily surpass," the analyst wrote in his report.

CSFB upgraded Apple to "Outperform" and raised its price target from $40 to $45. The firm also raised its fiscal year (FY) '05 and FY06 earnings-per-share (EPS) estimates to $1.36 and $1.61, respectively, from $1.32 and $1.52.

"Apple is currently trading at 22x our FY06 EPS estimate, its lowest multiple on forward earnings estimates since its earnings miss in June 2002," the firm said. "Alternatively, after eliminating net cash per share of $8.23, Apple is trading at 19x our FY06 NOPAT estimate of $1.47 with a 6.2% free cash flow yield." The firms new $45 target assumes a 25x multiple on its FY06 net operating profit after tax estimate.

"Dare we say it...Apple is cheap," Semple said.
post #2 of 11
Right. The high end gamers especially.

EDIT: How about gamers period?
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post #3 of 11
Quote:
Originally posted by Not Unlike Myself
Right. The high end gamers especially.

EDIT: How about gamers period?

As you've probably read quite a few times, Apple is aggressively working on OpenGL on Mac OS X. It is reportedly much faster on Tiger than on Panther.

As for processor speed. They can't make IBM go any faster than they are. If they could there would be a 4.5ghz CPU in Apple computes now (based on when we expected 3ghz computers.
post #4 of 11
Quote:
Originally posted by Not Unlike Myself
Right. The high end gamers especially.

EDIT: How about gamers period?

http://www.macgamer.com/
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45 2a3 300b 211 845 833
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post #5 of 11
For both of you this is where I post the click of Steve Balmer screaming 'developers developers developers'...

It's not about a few ports or even the occasional scoop. It's about broad based appeal. It's about expansion packs. It's about getting games when the *OTHER* gamers get them. It's about support for your gamepads. It's about GRAPHICS CARDS.

And most of all.. it's about COST. (something you can't contest) Where is the build/priced to own Mac for gaming? Oh wait...

Do you want me to drag out the laundry list of games without equal on the PC? \
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post #6 of 11
Quote:
Originally posted by Not Unlike Myself
For both of you this is where I post the click of Steve Balmer screaming 'developers developers developers'...

This is something that may never get old...

http://www.ntk.net/media/developers.mpg
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post #7 of 11
"Gamers" are a big chunk of the computer market. People who game, among many other things, on their computer.

HIGH-end gamers, and people who want only games at the expense of all other purposes, and people who build their own PCs are a MUCH smaller set.

And even a few high-end gamers may enjoy the Mac's lack of viruses, and all the associated time-wasting.

It all depends on what trade-offs each person is willing to make. I wouldn't trade any PC or console for UT 2004 on my PowerBook

I can certainly see the fun of building your own PC--that has always appealed to me if it weren't for the intolerable (to me) defects of Windows and Linux But part of OS X's quality is BECAUSE the hardware side is less chaotic. So I don't expect--or want--that to change.
post #8 of 11
It gets tiring listening to you gamers. I suspect that with the introduction of the new XBox 360 and PS3 that more people will be abandoning their PC games for these.

There aren't many games that can't already be played on a console. The new generation will be more sophisticated. I wouldn't be surprised if more people play games on their consoles than play on computers even now.
post #9 of 11
Quote:
Originally posted by Not Unlike Myself

Do you want me to drag out the laundry list of games without equal on the PC? \

Just for the record, would you ? Or at least the top ten ?

Apart from Max Payne I don't play games on my Macs, but I am interested to know what I might be missing. Are there any games of interest to those of us aged 15 and above who don't own Wintel PCs ?




Macs: Then: IIc. IIsi. IIfx. Color Classic. LCII. Beige G3 266. Now: G4 450. TiPB 550
Coming: G5 2.+ and 20" iMac on next iteration.
Tunes: 4G 20gb iPod: 512mb iPod shuffle
Macs. Then: IIc. IIsi. IIfx. Color Classic. LCII. LCIII. Beige G3 266. G4 450. Now: i7 iMac. 24-inch iMac 2.8GHz. MBP 2GHz. G5 2GHz. iPad 32GB wifi
Tunes: 32GB iPhone 4G. 32GB iPhone 3GS. 32GB...
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Macs. Then: IIc. IIsi. IIfx. Color Classic. LCII. LCIII. Beige G3 266. G4 450. Now: i7 iMac. 24-inch iMac 2.8GHz. MBP 2GHz. G5 2GHz. iPad 32GB wifi
Tunes: 32GB iPhone 4G. 32GB iPhone 3GS. 32GB...
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post #10 of 11
Quote:
Originally posted by jackthemac
Just for the record, would you ? Or at least the top ten ?

Apart from Max Payne I don't play games on my Macs, but I am interested to know what I might be missing. Are there any games of interest to those of us aged 15 and above who don't own Wintel PCs ?

Macs: Then: IIc. IIsi. IIfx. Color Classic. LCII. Beige G3 266. Now: G4 450. TiPB 550
Coming: G5 2.+ and 20" iMac on next iteration.
Tunes: 4G 20gb iPod: 512mb iPod shuffle

(Sarcasm... sorry.... I didn't explain it well)

What I *meant* was that there were no 'slam dunks' for the Mac. (which you obviously see since you couldn't name any)

The PC side is full of dozens of titles which either never made it to the mac, or which by the time they arrived their sequel was ready for the PC.

Lots of ground is still available of this no infamous 100% coverage.
I never get tired of being right all the time... but I do get tired of having to prove it to you again and again.
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I never get tired of being right all the time... but I do get tired of having to prove it to you again and again.
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post #11 of 11
Quote:
Originally posted by Not Unlike Myself
(Sarcasm... sorry.... I didn't explain it well)

What I *meant* was that there were no 'slam dunks' for the Mac. (which you obviously see since you couldn't name any)

The PC side is full of dozens of titles which either never made it to the mac, or which by the time they arrived their sequel was ready for the PC.

Lots of ground is still available of this no infamous 100% coverage.


Ah-Ahh. My irony quotient is somewhat depleted by this time of night...
Macs. Then: IIc. IIsi. IIfx. Color Classic. LCII. LCIII. Beige G3 266. G4 450. Now: i7 iMac. 24-inch iMac 2.8GHz. MBP 2GHz. G5 2GHz. iPad 32GB wifi
Tunes: 32GB iPhone 4G. 32GB iPhone 3GS. 32GB...
Reply
Macs. Then: IIc. IIsi. IIfx. Color Classic. LCII. LCIII. Beige G3 266. G4 450. Now: i7 iMac. 24-inch iMac 2.8GHz. MBP 2GHz. G5 2GHz. iPad 32GB wifi
Tunes: 32GB iPhone 4G. 32GB iPhone 3GS. 32GB...
Reply
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