Merrill Lynch: Apple building consumer electronics franchise

Posted:
in General Discussion edited January 2014
Following Apple's new product introductions at this week's Macworld Expo, Merrill Lynch analyst Steve Milunovich said he believes Apple is building a sustainable consumer electronics franchise and is showing off its strategic flexibility with its lowest price Mac ever and iPod shuffle, which boasts more capacity than expected for $99.



"We believe the Mac mini will sell well to both PC switchers and Mac lovers wanting to put iTunes, iPhoto, and iVideo into entertainment room," the analyst said. "The lower price point could entice PC owners to consider the Mac, particularly those with iPods." Milunovich believes the Mac mini's S-video output could be an overlooked feature that many a Mac lover will use to drive their TVs.



Merrill Lynch also believes Apple is poised to take the top position in the flash-based MP3 market in the next few quarters if the company ramps production, citing attractive pricing on the new flash-based iPod shuffle. "If Apple hits 5% share this quarter, that could be 300,000 units. If it takes off, the number could be much higher, possibly passing the 1 million mark."



Going forward, the firm believes the iMac and iPod need to be positioned to feed off each other. "The new Mac mini should act as a bridge to the iPod in the living room and the basis for an entertainment server." The firm said dropping price points could be the catalyst needed to get consumers to switch from Windows or at least try out the Apple offerings.



The firm also expressed a favorable reaction to this year's Macworld Expo in San Francisco, which it says was packed with both exhibitors and attendees. "We had trouble navigating the showroom floor as the Mac faithful mingled with the press and investors. The show had a festive atmosphere with attendees jumping at products from QLogic SAN switches to Mercedes iPod attachments to video professional editing systems." Merrill Lynch contrasts this to the last LinuxWorld it attended, which was 'much calmer' despite Linux's growth.



Merrill Lynch maintains its 'Buy' rating for AAPL with a price objective of $78 per share based on a 2.2X EV/Sales ratio, which is an 18% premium to Dell and Lexmark. The firm is modeling earnings of $0.47 for the December quarter on $3.35 billion in sales, stating that strong iPod sales could have pulled up retail and notebook sales, which should help the company's margins.

Comments

  • Reply 1 of 9
    m01etym01ety Posts: 278member
    "iVideo"? Analyst indeed.
  • Reply 2 of 9
    spudspud Posts: 25member
    i'm pretty sure that the mac mini does not have S-video output without an adapter.
  • Reply 3 of 9
    amorphamorph Posts: 7,112member
    And Merrill-Lynch goes off the ranch again.



    One day, maybe, it will occur to the analysts that Apple has been trying to turn personal computers into CE devices for at least 2 decades now. It's not so much that they're transforming into a CE company, but they are diversifying.
  • Reply 4 of 9
    It would be nice if it was something like this:



    http://www.studio2f.com/misc/2005/01...ss_is_more.php
  • Reply 5 of 9
    Maybe I'm a complete loon, but perhaps Apple should at least explore the possibility of adding some kind of DVR capacity to future versions of the Mac mini. Given all the consistent negative news about TiVo and Replay and the less-than-stellar provider-branded DVRs, perhaps Apple could at least try the DVR market.



    Microsoft is offering the Idiot Box for the Idiot Box, and Apple could one-up them with a tried-and-true Mac that also happens to function as a multi-tuner DVR.



    Again, maybe I'm a complete loon.
  • Reply 6 of 9
    Quote:

    Originally posted by Squirrel_Monkey

    Maybe I'm a complete loon, but perhaps Apple should at least explore the possibility of adding some kind of DVR capacity to future versions of the Mac mini. Given all the consistent negative news about TiVo and Replay and the less-than-stellar provider-branded DVRs, perhaps Apple could at least try the DVR market.



    Microsoft is offering the Idiot Box for the Idiot Box, and Apple could one-up them with a tried-and-true Mac that also happens to function as a multi-tuner DVR.



    Again, maybe I'm a complete loon.






    The link above talks about this... the add on features are coming toe the Mini. The Mini is a trojan horse.
  • Reply 7 of 9
    I think Apple is making a big mistake by not shipping a keyboard with the mini.



    I don't know how well people with no mac experience will be able to just plug their existing windows keyboard into the mini (once they buy a ps/2 to usb adapter) with no command or eject keys.
  • Reply 8 of 9
    gene cleangene clean Posts: 3,481member
    The funny thing is they don't even ship documentation with it. Nada. Just 'electronic documentation'. What is that? Another CD/DVD? Who in their right mind would want to read 50 pages in a computer?



    I always prefer the original manual in a form of a booklet than some fu*ked up electronic manual. What is this, a $5 dollar shake [insert John Travolta voice in Pulp Fiction]. People are gonna pay several hundred dollars for this and if my freaking USB external enclosure for $20 company can provide me with a nice booklet explaining what to do, I'm pretty sure Apple can.



    Dang, no mouse, no keyboard, no display, lousy ports, and no help to the novice? Wtf?
  • Reply 9 of 9
    elehcdnelehcdn Posts: 375member
    Quote:

    Originally posted by Squirrel_Monkey

    Maybe I'm a complete loon, but perhaps Apple should at least explore the possibility of adding some kind of DVR capacity to future versions of the Mac mini. Given all the consistent negative news about TiVo and Replay and the less-than-stellar provider-branded DVRs, perhaps Apple could at least try the DVR market.





    Mac mini w DVI out + ATI Wonder + eyeTV = PVR for $650 list.



    Mac mini w DVI out + eyeTV 500 = HD PVR for $850 list



    Get ATI built-in, License eyeTV & you have your CE box ....
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