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AmTech: Apple 'rare' company building customer trust

post #1 of 11
Thread Starter 
While some investors may be concerned with weaker retail sales reported by Apple Computer on Wednesday, analyst for American Technology Research see the slump as a temporary trade-off that is resulting from the company's strives to develop customer trust.

"We are not too bothered as we believe most of the weakness was seasonal and from our checks, Apple's sales representatives have been instructed to not push PowerPC Macs [on] customers who want to wait for Intel Versions," analyst Shaw Wu wrote in a research note to his clients early Thursday morning. "In this day and age where making numbers is important, we believe Apple is in a rare group of companies willing to sacrifice its near-term revenue opportunity for greater longer-term success by developing customer trust."

The Wall Street analyst said Apple is now well-positioned to deliver upside to its earnings with strong second half seasonality and powerful product momentum moving forward, which will include a new low-cost Intel widescreen notebook (MacBook) and changes to its iPod line.

Wu, who accurately predicted that Apple would report its second strongest quarter in its corporate history, noted that the company's results fell above guidace. However, he said the "big surprise" was the Mac maker's gross margin of 29.8 percent versus his forecast of 27.8 percent. Apple's gross margins were largely impacted by more favorable NAND flash pricing throughout the quarter.

"We find this interesting as there was speculation on where Apple would benefit or suffer from rapidly dropping NAND flash pricing given its $1.25B in long-term supply contracts," the analyst commented.

As Wu hinted in previous commentary to clients, Apple on Wednesday indeed made another attempt to reset investor expectations with conservative guidance for its June (this) quarter. "For the June quarter, Apple guided below consensus in we think another attempt to reset unrealistic consensus revenue expectations," he wrote. "We are leaving our estimates (with options expensing) unchanged at $2.00 for fiscal year 2006 and $2.45 for fiscal year 2007.

Shaw Wu and American Technology Research maintained their Buy rating on Apple shares with a price target of $101.
post #2 of 11
Why does Shaw Wu's every word make front page news on this site? It's just analysis, not news, and not very insightful analysis at that.

When was the last time you went "Ah, of course," after reading one of his reports? My reaction is more of "Where's the meat of it? Where's the insight?"
post #3 of 11
Quote:
Originally posted by ascii
Why does Shaw Wu's every word make front page news on this site? It's just analysis, not news, and not very insightful analysis at that.

Cause there's nothing to post, but something MUST be posted. Therefore he's the man to turn to when there's, well... nothing.

Maybe this site should change its name from AppleInsider to AppleReporter
post #4 of 11
Quote:
Originally posted by AppleInsider
While some investors may be concerned with weaker retail sales reported by Apple Computer earnings on Wednesday...

yeah id be worried about weak retail sales too when the company is only making 10% profit off over 4 billion
post #5 of 11
I like the bit about customer trust though. Apple are very right not to piss off people in the short term by landing them with a last of generation PPC Mac ... when this could backfire later on as these people feel burned.

Of course, the meticulous surprise product announcements only generate this problem in the first place, but we all love those right?
post #6 of 11
Quote:
Originally posted by AppleInsider
...which will include a new low-cost Intel widescreen notebook (MacBook) and changes to its iPod line.

Are you sure it's gonna be called MacBook? Perhaps more likely the iMacBook. There is nothing in "MacBook" that suggests what the target group is. MacBook pro sounds like it's for pro's. iMac sounds like it's for home users. MacBook feels more like the old term Powerbook, and not like iBook. iMacBook or MacBook [something ipod-demographic'ish] would perhaps be a better guess?
post #7 of 11
Quote:
Originally posted by palegolas
Are you sure it's gonna be called MacBook? Perhaps more likely the iMacBook. There is nothing in "MacBook" that suggests what the target group is. MacBook pro sounds like it's for pro's. iMac sounds like it's for home users. MacBook feels more like the old term Powerbook, and not like iBook. iMacBook or MacBook [something ipod-demographic'ish] would perhaps be a better guess?

iMacBook wouldn't make too much sense strictly from a naming standpoint. If there is a MacBook Pro, logic should say that there must be a MacBook [not Pro]. I think that Apple wants to make sure that there is as much continuity of nomenclature as possible.

Unless they bring out two more lines of notebooks. Hmm....
post #8 of 11
"Wu, who accurately predicted that Apple would report its second strongest quarter in company history, "

Woo hoo! Anybody could've predicted that because Apple predicted this exact thing when they gave guidance back in January. If he's going to toot his horn, then he'd be wise to do so on something more difficult.

"As Wu hinted in previous commentary to clients, Apple on Wednesday indeed made another attempt to reset investor expectations with conservative guidance for its June (this) quarter."

Woo hoo! Apple has provided conservative guidance for over 3 years (or even more - too much trouble to go back further to look). I'll predict that Apple will handily beat its guidance when they announce in July, especially if the 17" MacBook Pro and 13.3" MacBooks are released in this quarter. And if they release new iPods before the end of May, Apple had better reissue guidance.
"you will know the truth, and the truth will
set you free."
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"you will know the truth, and the truth will
set you free."
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post #9 of 11
WU!!!

"I reject your reality and substitute it with my own" - President Bush
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"I reject your reality and substitute it with my own" - President Bush
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post #10 of 11
Quote:
Originally posted by Anders
WU!!!



Wu? Wuuuu-hooooo!

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #11 of 11
Dick Cassablanca (to Logan Echolls) .. "God, I don't know how I'm gonna quit you. Shh! It's not me, it's Wu."
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