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Apple shares may reflect too much cell phone optimism

post #1 of 28
Thread Starter 
American Technology Research this week said it has removed Apple Computer from its "Focus List" out of concern that investors may have baked too much cell phone optimism into the company's current share price.

"Since we added Apple about three weeks ago in conjunction with our proprietary analysis of Apple's significant technical progress in its cell phone efforts, shares have appreciated 15 percent versus 3 percent in the NASDAQ," analyst Shaw Wu told clients on Wednesday.Â*

"While we remain long-term positive, we believe Apple shares may reflect too much near-term cell phone optimism."

In a research note, Wu said he would not be surprised to see a near-term pullback in the iPod maker's share price but said he would be an aggressive buyer at levels high-$60 to low-$70 range.Â*

The analyst also offered an update on Microsoft's digital media player strategy, saying his checks indicate the software maker is likely to employ a new proprietary DRM with its forthcoming Zune players, one which is incompatible with its PlaysForSure DRM used by its OEM partners such as Creative, SanDisk, Sony, Samsung, iRiver, and Archos.

"It appears that Microsoft is willing to risk supporting two competing standards in an effort to replicate Apple's successful vertically integrated iPod+ iTunes model," he said. "However, we believe the unexpected side effect will be further fragmentation in the Windows Media market, creating more confusion to consumers."

Wu said he remains "underwhelmed" with the much-hyped Zune, which he calls a "repackaged Toshiba Gigabeat" player.

Despite the removal of Apple shares from the AmTech Focus List, Wu maintains a "Buy" rating on Apple stock with a price target of $91.
post #2 of 28
Quote:
Originally Posted by AppleInsider

"Since we added Apple about three weeks ago in conjunction with our proprietary analysis of Apple's significant technical progress in its cell phone efforts, shares have appreciated 15 percent versus 3 percent in the NASDAQ," analyst Shaw Wu told clients on Wednesday.*

That's because since that time Apple has introduced a new line of iPods, iTunes 7.0, a movie distribution service and a preview of the forthcoming iTv set-top box. Reports have also surfaced about a stronger than expected back to school September Mac quarter.

Wu is a MORON!
post #3 of 28
Quote:
Originally Posted by AppleInsider

American Technology Research this week said it has removed Apple Computer from its "Focus List" out of concern that investors may have baked too much cell phone optimism into the company's current share price.

Crap. Wu is the head chef that's been adding the cellphone ingredient, now he blames investors for listening to him.

hehe, that's too funny.
post #4 of 28
Quote:
Originally Posted by solsun

Wu is a MORON!

Right on, man. You should totally apply for his job because you're obviously a much better analyst than him. You could include your posts on AppleInsider on your resume to show your incredible market savvy.
post #5 of 28
Wu sets a $91 target and then thinks that $77 is too optomistic...and says you should buy at high 60's -low 70's..the last time I checked my math 77 was more than 15% below 91...a pretty high return in this market.
post #6 of 28
The company has no debt, eight billion in cash, and even without the cellphone it has a higher growth rate than its P/E ratio.

I think that a cellphone will push it over 100 easy - the current pricing is too low even without the cellphone factored in.
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post #7 of 28
Shaw, you bitch! Heel, Wu! Heel!

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post #8 of 28
He's trying to drive the price down for someone to buy more before the monster Christmas Quarter.
Previous posters are right. He predicts 90 or so and then it creeps that way and he says 75 is too high?! WTF??

There is big news brewing, big-time Mac sales. And the price is going way up the rest of the year. Shaw is trying to help some people catch the bus.

And don't forget Adobe will have an update in 2007. Mac orders will pour in once those products release.
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post #9 of 28
I think the problem is that fans have let their expectations get out of hand.

I wonder how much trouble will brew when the phone isn't what the buyers had hoped for? You already have the flip vs. non-flip factions, then there are the camera/ no camera factions. They can't please everyone, and I suspect that a lot more people will be upset than usual. The media player has to be settable limiters such that it doesn't eat away too much at the phone battery life. Personally, I don't understand why Apple had allowed Moto to release the ROKR, USB 1.1 synching and the big brick shape doesn't help.
post #10 of 28
Wu is bizarre/an idiot! Sets target price of $91 with buy rating, yet says their over-priced at $77
Either he's just trying to cover all bets, or he's trying to make some cash by pushing it down before saying 'oh, it's not overvalued afterall'

To me there's enourmous upside potential for Apple
- not just with the exising products & derivatives...
- MacPro 2x Quad core
- Xservers - Quad-Cores + Single Socket & Quad Socket servers
- Conroe based Mac (Dual & Quad Core)
- C2D MBPs etc
- additional MBPs (12"?) & MBs


...but if you think about the IDF as a showcase of what Apple could easily do using Intel reference designs, some good product targetting & some good marketing, then there's even more...
ClassMac (especially with Apple's Educational credentials)
UMPC Mac placed somewhere between an iPod & MB in terms of price

Not too mention, iTV (ViiV), Video iPods, and the iPhone.

Alot of the intel ideas are just screaming out for someone like apple to take them & make them really work as a complete package.

The server business alone must have the potential to be a $5Billon/pa business for Apple (i.e. same as Dell)

So, I say 'buy' with a target price of $120!
post #11 of 28
Quote:
Originally Posted by nothowie

Wu sets a $91 target and then thinks that $77 is too optomistic...and says you should buy at high 60's -low 70's..the last time I checked my math 77 was more than 15% below 91...a pretty high return in this market.

That's not what he's saying.

$91 dollars is a long term valustion. He's saying, as are others, that the recent jumps are not warranted.

He may, or may not be right, but at least understand what's being said.
post #12 of 28
Quote:
Originally Posted by samurai1999

Wu is bizarre/an idiot! Sets target price of $91 with buy rating, yet says their over-priced at $77
Either he's just trying to cover all bets, or he's trying to make some cash by pushing it down before saying 'oh, it's not overvalued afterall'

To me there's enourmous upside potential for Apple
- not just with the exising products & derivatives...
- MacPro 2x Quad core
- Xservers - Quad-Cores + Single Socket & Quad Socket servers
- Conroe based Mac (Dual & Quad Core)
- C2D MBPs etc
- additional MBPs (12"?) & MBs


...but if you think about the IDF as a showcase of what Apple could easily do using Intel reference designs, some good product targetting & some good marketing, then there's even more...
ClassMac (especially with Apple's Educational credentials)
UMPC Mac placed somewhere between an iPod & MB in terms of price

Not too mention, iTV (ViiV), Video iPods, and the iPhone.

Alot of the intel ideas are just screaming out for someone like apple to take them & make them really work as a complete package.

The server business alone must have the potential to be a $5Billon/pa business for Apple (i.e. same as Dell)

So, I say 'buy' with a target price of $120!

And, you have how many shares?
post #13 of 28
I own 1300 shares. If I had more money to borrow I would buy more. I made 29K last year from it. This stock will double in one year and here is why.

I just bought my wife's office a new MacBook Pro yesterday. When I talked to the salesman he state they were selling them like hotcakes. I had to wait in line to buy the system. Last time this was happening it was just before the stock went over 90 and split.

The main reason Apple is doing well is the iPod. On the plane and on the subway and in school yards and at the gym everyone has iPods. Now people are buying Apple computers because of Intel inside. With Parallels one can run Windows and Mac at the same time. This reason alone and all the other great things from Apple will increase Apple market share.


The next big thing will be the iTV. A year or two from now it will rock the way iTunes and iPods rock now. When Walmart feel threatened Watch OUT. The grow potential is great in this area for Apple.

iPhone will take time to mature due to contract obligations of most celluar customers. It will keep Apple in the news but not really add much to the bottom line.

Wu is an idiot who talks out of both sides of his mouth. He is trying to lower the stock and it worked a little today.
post #14 of 28
Quote:
Originally Posted by melgross

And, you have how many shares?

I have 50 shares, bought at $66.60.

And yes, I sold my ATI at $16.60 to buy Apple, so I need a break!

post #15 of 28
Quote:
Originally Posted by g5man

I own 1300 shares. If I had more money to borrow I would buy more. I made 29K last year from it. This stock will double in one year and here is why.

I just bought my wife's office a new MacBook Pro yesterday. When I talked to the salesman he state they were selling them like hotcakes. I had to wait in line to buy the system. Last time this was happening it was just before the stock went over 90 and split.

The main reason Apple is doing well is the iPod. On the plane and on the subway and in school yards and at the gym everyone has iPods. Now people are buying Apple computers because of Intel inside. With Parallels one can run Windows and Mac at the same time. This reason alone and all the other great things from Apple will increase Apple market share.


The next big thing will be the iTV. A year or two from now it will rock the way iTunes and iPods rock now. When Walmart feel threatened Watch OUT. The grow potential is great in this area for Apple.

iPhone will take time to mature due to contract obligations of most celluar customers. It will keep Apple in the news but not really add much to the bottom line.

Wu is an idiot who talks out of both sides of his mouth. He is trying to lower the stock and it worked a little today.

Good post and I agree. There is much more up Steve's sleeve and this holiday season will be pretty interesting with the new iPods. I smile every time the price goes up and smile every time it goes down. The fortunate few get to buy more stock!
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post #16 of 28
this is a little off topic, but...


Does anyone have any insight on how Apple is going to balance the success of an iPhone without crippling the iPod and iPod nanos sales?

The way i see it crippling sales of the nano is inevitable and that they are willing to allow it in exchange for the more profitable iPhones. I think that they will make sure that the iPhone always has a smaller screen and significantly less hard drive space than the iPod video.
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post #17 of 28
Quote:
Originally Posted by wealjays

this is a little off topic, but...


Does anyone have any insight on how Apple is going to balance the success of an iPhone without crippling the iPod and iPod nanos sales?

The way i see it crippling sales of the nano is inevitable and that they are willing to allow it in exchange for the more profitable iPhones. I think that they will make sure that the iPhone always has a smaller screen and significantly less hard drive space than the iPod video.

Worry about one product cannibalizing another has been the downfall of many companies - hopefully they make the iPhone the absolute best that it can be, regardless of the effect on other products. If they hobble it in any way, it opens up space for competitors.
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post #18 of 28
Quote:
Originally Posted by e1618978

Worry about one product cannibalizing another has been the downfall of many companies - hopefully they make the iPhone the absolute best that it can be, regardless of the effect on other products. If they hobble it in any way, it opens up space for competitors.


I dont think that makes sense. Some people only want iPod and if Apple doesn't produce an iPhone then they won't buy a music phone at all. People will go on like they do now with a razr or other thin/small phone in one pocket and an iPod in the other. But if they can consolidate it by buying an iPhone then they will be thrilled, I am not sure if the shareholders will be though.
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post #19 of 28
Quote:
Originally Posted by wealjays

I dont think that makes sense. Some people only want iPod and if Apple doesn't produce an iPhone then they won't buy a music phone at all. People will go on like they do now with a razr or other thin/small phone in one pocket and an iPod in the other. But if they can consolidate it by buying an iPhone then they will be thrilled, I am not sure if the shareholders will be though.

You are forgetting the people that don't want to deal with having separate devices. I would expect the number of those people to gradually be increasing. Not producing a phone would be conceding the market. Apple's basically conceded the music sales market in Japan as it is, most people there buy music for their phone.

Besides, I thought shareholders were asking for an Apple phone.
post #20 of 28
they are, but in the long run I think that they are wrong.

they don't realize that this may severely cripple iPod sales.

unless Apple makes more profit off the iPhone it would seem unwise to transition their user base.

it will be a long time before people stop buying dedicated mp3 players especially if they are hooked on Apple design and if their is no Apple designed mp3 phone then they won't get an mp3 phone at all.
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post #21 of 28
Quote:
Originally Posted by wealjays

they are, but in the long run I think that they are wrong.

In the long run, the market for a dedicated device may simply go away, leaving Apple with no alternative if they still want to sell products. iPod sales have already begun a slow decline as it is.

Quote:
they don't realize that this may severely cripple iPod sales.

unless Apple makes more profit off the iPhone it would seem unwise to transition their user base.

it will be a long time before people stop buying dedicated mp3 players especially if they are hooked on Apple design and if their is no Apple designed mp3 phone then they won't get an mp3 phone at all.

Short term, I doubt it will cripple sales of the dedicated units. I don't think Apple can afford to take a trailing edge position in this because that means losing long term relevance in the market. Apple must be willing to advance their product to what the market is asking. There is a mantra that generally holds true - they must obsolete their product before someone else does.
post #22 of 28
does anyone have any indication on if the margins on the iphone will be more or less than the current video ipods?

i imagine that they will be significantly less.
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post #23 of 28
Quote:
Originally Posted by g5man

I own 1300 shares. If I had more money to borrow I would buy more. I made 29K last year from it. This stock will double in one year and here is why.

I just bought my wife's office a new MacBook Pro yesterday. When I talked to the salesman he state they were selling them like hotcakes. I had to wait in line to buy the system. Last time this was happening it was just before the stock went over 90 and split.

The main reason Apple is doing well is the iPod. On the plane and on the subway and in school yards and at the gym everyone has iPods. Now people are buying Apple computers because of Intel inside. With Parallels one can run Windows and Mac at the same time. This reason alone and all the other great things from Apple will increase Apple market share.


The next big thing will be the iTV. A year or two from now it will rock the way iTunes and iPods rock now. When Walmart feel threatened Watch OUT. The grow potential is great in this area for Apple.

iPhone will take time to mature due to contract obligations of most celluar customers. It will keep Apple in the news but not really add much to the bottom line.

Wu is an idiot who talks out of both sides of his mouth. He is trying to lower the stock and it worked a little today.

I have a lot more than that, and despite the silliness expressed on the boards over what these people say, they usually do make sense.

Several of them predicted the rise in Apple's stock several years ago, and people here were making the same comments.

I see the stock rising more as well, and likely, eventually, the stock will rise to $120. But that is more speculation that is warranted from what we DO know.

These analysts have to work from what they find out from sources than none here can hope to match. It's their job to state what they know. That's what they do.

If the day traders then run with that and run the stock up, that's too bad. But that happens all of the time. What he's doing here, is telling investors that the recent run-up has gotten ahead of what the company has out, and shown. The run has come on speculation that, at this time, is unwarranted.

He does think the stock will rise to $99 in the future, perhaps in the next few months. But, first we have to see the actual figures for this quarter. Then we have to see if any of these hoped for new productswhich Apple has said nothing at all about, will appear in time for the holiday season. Then we will have to see the results for that.

People here tend to jump the gun upon the slightest speculation, and assume that these are actual products when they are not.

Need I remind anyone here that we have been expecting the "true" video iPod since last January, and the iPhone since sometime early this year?

Neither product appeared, nor did the set-top box that many here predicted at the time.

That, and the market's performance overall, was why the stock dipped to almost $50.

Every time the speculation machinery was in form, the stock would take a sharp rise, only to fall back most of the way.

He's just warning investors that it may happen again if Apple does not come out with those often speculated upon products, when people are expecting them.

Nothing wrong about that. It's what he should be doing.
post #24 of 28
Quote:
Originally Posted by wealjays

does anyone have any indication on if the margins on the iphone will be more or less than the current video ipods?

i imagine that they will be significantly less.

I would think that it would be about the same.
post #25 of 28
Quote:
Originally Posted by melgross

I see the stock rising more as well, and likely, eventually, the stock will rise to $120. But that is more speculation that is warranted from what we DO know.

I agree, my $120 comment was just a bit of tongue-in-cheek flippancy.

My more serious point was that I think Apple has enourmous potential at this point, and just needs to execute on the obvious things, without a whole lot of risk or innovation, to grow enourmously. And I think Steve Jobs & Co are more than capable of excuting on the obvious things.

There was another investment analyst quoted on here who said that he believed Apple had passed an 'inflection point', and I think I agree with him.
8) 8) 8)
post #26 of 28
Quote:
Originally Posted by samurai1999

I agree, my $120 comment was just a bit of tongue-in-cheek flippancy.

My more serious point was that I think Apple has enourmous potential at this point, and just needs to execute on the obvious things, without a whole lot of risk or innovation, to grow enourmously. And I think Steve Jobs & Co are more than capable of excuting on the obvious things.

There was another investment analyst quoted on here who said that he believed Apple had passed an 'inflection point', and I think I agree with him.
8) 8) 8)

We also have to see how the Zune does. While we all think that it isn't much, if it looks as though it will do even moderately well, Apple's stock would drop.
post #27 of 28
Out of the gates (no pun intended) the Zune may attract the early adopter crowd, then fall off dramatically. Whatever the case, expect the media blitz to be intense and the iPod bashing should be also.

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post #28 of 28
Quote:
Originally Posted by SpamSandwich

Out of the gates (no pun intended) the Zune may attract the early adopter crowd, then fall off dramatically. Whatever the case, expect the media blitz to be intense and the iPod bashing should be also.

MS will be spending far more than Apple will on ads. That will have some impact. You can be sure that they will show the features in their best light. There are people who feel about MS the way most here feel about Apple, hard as that may be to believe. They will rush out and buy this.
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