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Apple's Intel Mac mini sales surprise analysts

post #1 of 7
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Apple Computer's new line of Intel-based Macs remain strong sellers this month, with "solid" demand for not only the company's iMac and MacBook Pro offerings but also the Mac mini, according to a new research note from UBS Investment Research.

"We continue to be pleasantly surprised by our checks which indicate that there has been solid reception of the new Intel-based Mac minis," analyst Ben Reitzes and his team of associate analysts told clients on Monday. "The new Mac Minis appear to be off to a stronger than expected start as our checks continue to indicate units are being purchased both as media centers and low-cost entry-level Mac options."

The strong Mac mini sales are not limited to just Apple's retail stores, the analyst noted. He said visits to CompUSA retail stores also turned up evidence of "relatively solid demand" for the petite computers.

"While concerns regarding Mac sales were high going into Apples fiscal second quarter (ended March) due to the Intel transition, Apple sold about 1.1 million Macs in [in that time] (compared to our estimate for 979,000) representing about 4 percent growth year-over-year and a sequential decline of only 11 percent," Reitzes wrote. "With demand for Intel-based systems realizing a full quarter of shipments in fiscal third quarter, we believe momentum in Mac sales should continue."

Some of the new Mac models the analyst believes will continue to drive momentum are Apple's recently released 17-inch MacBook Pro professional notebook and the soon-to-be-unveiled 13-inch MacBook consumer portables.

"We believe that new MacBooks could be very popular for the back-to-school season and expect these units to be on display when Apple opens its latest flagship store at the GM Builiding in Midtown Manhattan this month," Reitzes wrote. "Our research indicates the opening could take place with some new products or promotions on or around May 19th with Steve Jobs in attendance."

For Apple's current, third quarter ending June, the analyst is estimating year-over-year Mac unit growth of about 5 percent (or 12 percent sequentially) to 1.2 million units. By the end of the fiscal year in September, he sees 9 percent overall growth to 5 million units.

Meanwhile, Reitzes said monthly store visits and recent surveys indicate iPod demand remains healthy, but with similar seasonality to Apple's first fiscal quarter of the year. In his research note, he said checks indicated that all stores (both Apple and non-Apple locations) were fully stocked with all iPod models, with store representatives continuing to indicate that iPods remain the top digital music player of choice for consumers.

"However, our checks indicate that the overall MP3 market may still be decelerating a bit from year-end, as store representatives indicated that demand for all MP3 players remain more subdued, with plenty of inventory from a number of vendors," the analyst wrote. "We believe our checks back recent weaker than expected sales for iPods in Apples recently reported fiscal second quarter. Despite the possibility of a slowing MP3 market, we continue to believe sales of video iPods are relatively solid, with many store managers indicating that sales of video iPods may be even stronger than that of nanos."

According to Reitzes, Apple next quarter will introduce new iPods that will help the company maintain its success in the digital music player space and help drive momentum through the end of the year. He predicts the video iPod will move from 30GB/60GB to 40GB/80GB by the fall with a larger screen. In regards to the nano, he sees Apple introducing 6GB and 8GB configurations by the end of 2006, with lower NAND flash prices providing an opportunity for more attractive price points.

"In the meantime, we wouldnt be surprised to see Apple cut prices for iPods (especially nanos) near-term to help stimulate demand into new product launches during the weaker summer months," the analyst told clients. "In terms of features, we expect nanos to get a re-design with better clickwheels, more durable faces and perhaps built-in FM radios for some models (radios could also be available for the higher-end HDD-based iPods)."

For Apple's current, third quarter, Reitzes is estimating iPod unit shipments of 8.4 million, reflecting year-over-year growth of 36 percent (or a decrease of 2 percent sequentially). Factoring in lower average selling prices as a result of a full quarter of shuffle price reductions and the 1GB nano reductions, the analyst forecasts revenue growth to come in at 46 percent year-over-year to $1.6 billion.

"For fiscal year 2006, we forecast unit iPod unit sales of 40.9 million (+82 percent growth) reflecting solid
demand from new products and strong holiday sales," he wrote. "We continue to believe that Apple is working on a new HDD-based video device that looks like a video iPod with a much larger color screen, but are not certain whether it will be ready in time for the holiday season."

UBS Investement Research maintains a Buy rating on shares of Apple Computer with a price target of $95.
post #2 of 7
Not surprising.

3D gamers won't like it, but in every other regard it's a huge step up from the last version.

Consider that a single Intel Core offers performance in the same general ballpark as a single G5 chip: in essence we now have the equivalent of a single or dual G5s in a Mac Mini. Throw in Front Row remote, standard wireless, more ports, optical audio, and the other little improvements, and the $100 increase ain't bad.

And as Intel's prices come down, I expect we'll see Minis below $500 again.
post #3 of 7
I think the next logical step is for Apple to sell iTunes to people without computers... over cable to the home entertainment center, transferred via AirTunes.

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply
post #4 of 7
The Mini has hit a real nice sweet spot at the moment. I'm recommending it as the ideal crossover machine for my Windows-afflicted friends and family.

It also now makes good sense as a commercial installation machine for digital signage and HD playback. There is no real PC competition in the size/features/cost equation. Boot Camp has removed a lot of psychological resistance.
post #5 of 7
So what happened to the article that was just posted and then pulled about more evidence for MacBooks soon?

Did someone debunk it already? Or just a change of heart?
post #6 of 7
Quote:
Originally posted by minderbinder
So what happened to the article that was just posted and then pulled about more evidence for MacBooks soon?

Did someone debunk it already? Or just a change of heart?

It was rolled into the 17-inch MBP update. Looks like it was a false alarm.
post #7 of 7
Quote:
Originally posted by vinney57
The Mini has hit a real nice sweet spot at the moment. I'm recommending it as the ideal crossover machine for my Windows-afflicted friends and family.

It also now makes good sense as a commercial installation machine for digital signage and HD playback. There is no real PC competition in the size/features/cost equation. Boot Camp has removed a lot of psychological resistance.

Yup. The reincarnated Mac Mini is pocket rocket that I'd just love to have for my own if I wasn't already "saving up" for a MacBook.

The original Mac Mini was cute and all, certainly a step in the right direction regards cheap headless Macs, but I haven't considered buying a G4 since 2003. Core Duo meanwhile and now we're talking.

The tales of cpu's being diverted from Mini production to MacBook Pros make more sense now as an answer to the vast demand for the 15" MBP. The Mini wasn't unpopular, it just wasn't the best laptop on the market. Now there's plenty of Intel supply this is no longer apparently a problem.
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