Analyst sees better iPod mix and early Intel Macs

Posted:
in Future Apple Hardware edited January 2014
UBS Investment Research on Tuesday raised its price target on shares of Apple Computer to $86, citing higher than expected video iPod sales and expectations of a rise in Mac sales due to an early release of Intel Macs.



Better iPod mix and early Intel Macs



"We are excited about the prospects for further revenue contribution from iPods due to what we perceive as a positive mix shift to video iPods, which have a higher average selling price (ASP) than either the nano or Shuffle," said analyst Ben Reitzes. "Second, we believe Intel Macs could come as early as Macworld and believe that the initial release could be a broad portfolio of products."



The analyst believes the "iPod Multiplier Effect" is taking shape with strong sales in Macs, retail and peripherals. Additionally, Reitzes said he would not be surprised if Mac sales were buoyed in the future by enhanced digital media capabilities that could catapult Apple to the forefront of the digital home.



Looking ahead to Macworld



UBS believes it is likely Apple will announce new products and content at its January 10, 2006 Macworld with the likely introduction of the first of the Intel- based Macs, which would be much earlier than the company?s June guidance.



Reitzes said the Macworld show could turn out to be a "circus" that includes a few new Macs and other introductions such as digital entertainment/media devices, content and services.



"We note that Intel will be introducing its dual-core ?Yonah? processor in January (shipping now to vendors in pre-launch)," said Reitzes. "We believe it is possible for Apple to launch 2-3 new Intel-based Macs by early next year (including even iMacs and PowerBooks)."



The analyst also made reference to recent news reports of an improved Mac mini that may be on the horizon, perhaps as a digital media device.



"We continue to believe that Apple may expand its "digital hub? offerings to attempt to become even a bigger part of the digital home with possible new product introductions as early as at Macworld in January that may include "DVR-like" functionalities."



Media hubs, Viiv, Apple-branded phones



Reitzes said Apple could eventually discuss more innovations around media hubs (and related services) that act as storage units for music, movies, photos and/or other types of home entertainment -- pointing out that Intel's soon-to-be introduced "Viiv" could allow the company to explore additional consumer entertainment opportunities within the personal computer.



"We also believe that the company may choose to enter new consumer markets such as Apple branded cell-phones over the next 2 years where the company would be able to leverage its market leading innovations and creative designs that have made the iPod such a tremendous hit with customers," the analyst said.



Raising estimates



Given the above, UBS has raised its estimates on Apple through the 2007 fiscal year (FY). For FY06, the firm raised its earnings-per-share (EPS) estimate to $2.10 from $1.85 based on revenue growth of 42-percent year-over-year to $19.8B. In FY07, UBS expects EPS to come in at $2.58 based on revenue growth of 18-percent to $23.3B.



11.4 million iPods this quarter?



For the current quarter, the firm expects Apple to report EPS of 58 cents based on revenue growth of 50-percent year-over-year to $5.2B including iPod unit growth of 149-percent year-over-year to 11.4 million units (including sales of over 3 million video iPods.)



UBS continues to rate Apple a "Buy", raising its price target from $74 to $86 a share.
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Comments

  • Reply 1 of 49
    So Apple lowers their iPod sales estimates to around 8 and these guys increase it to 11.4? What do they know that nobody else does?
  • Reply 2 of 49
    Quote:

    Originally posted by schmidm77

    So Apple lowers their iPod sales estimates to around 8 and these guys increase it to 11.4? What do they know that nobody else does?



    I think it may be a difference of all iPod models (11.4 million) and iPod nano sales (7.5-8 million). But I might be wrong. I am pretty certain that the 8M number has been only about the nano.
  • Reply 3 of 49
    toweltowel Posts: 1,479member
    Quote:

    Originally posted by schmidm77

    So Apple lowers their iPod sales estimates to around 8 and these guys increase it to 11.4? What do they know that nobody else does?



    Apple's revised estimate was for Nanos only. These guys expect 3 million vPods and 11 million altogether, so it sounds like they and Apple are in the same ballpark.
  • Reply 4 of 49
    zunxzunx Posts: 620member
  • Reply 5 of 49
    Quote:

    Originally posted by Towel

    Apple's revised estimate was for Nanos only. These guys expect 3 million vPods and 11 million altogether, so it sounds like they and Apple are in the same ballpark.



    So what about shuffles then? Wasn't there a report that they are still selling pretty well too?
  • Reply 6 of 49
    melgrossmelgross Posts: 31,656member
    It's limited by manufacturing capacity. You've been reading the problems Apple is having there. Going back to Synaptics for the scrollwheel to supplement their own design.



    Just once, it would be nice if Apple could resolve their well known, and long time penchent for grossly underestimating demand.
  • Reply 7 of 49
    Quote:

    Originally posted by melgross

    It's limited by manufacturing capacity. You've been reading the problems Apple is having there. Going back to Synaptics for the scrollwheel to supplement their own design.



    Just once, it would be nice if Apple could resolve their well known, and long time penchent for grossly underestimating demand.




    In fairness to Apple demand prediction is a bit of an art. They are actually getting better. But some things still surprise them. It is also actually better to under produce (within reason) than over produce.
  • Reply 8 of 49
    nagrommenagromme Posts: 2,834member
    "first of the Intel- based Macs, which would be much earlier than the company?s June guidance."



    Apple's "June guidance," just to be clear, was that Intel Macs would ALREADY be IN THE MARKET... BY June. Many people think Apple said Intel Mac would APPEAR in JUNE. Possible. But it's a latest date, nothing more.



    "Macworld show could turn out to be a "circus""



    I think Apple will limit MWSF to one or two big announcements, and save others for press events in the coming weeks after MWSF. This makes a bigger impact: multiple stories in the press, week after week. Which ones will be at MWSF and which ones will be later? That might just depend on practical factors like which ones will come off the assembly lines first. Conclusion: don't be too upset if you favorite dream doesn't come true on Jan. 10. It MIGHT just come true in the following month.



    "iPod Multiplier Effect"



    Hmmm... that beats "iPod Halo Effect," but I'm still lobbying for the term "iPod Gateway Effect."
  • Reply 9 of 49
    melgrossmelgross Posts: 31,656member
    Quote:

    Originally posted by Chris Cuilla

    In fairness to Apple demand prediction is a bit of an art. They are actually getting better. But some things still surprise them. It is also actually better to under produce (within reason) than over produce.



    It is, within reason. But Apple has been notorious for this. As far back as I can remember (and that goes back a while, I can tell you. ), Apple has been criticised for this.



    As a matter of fact, It 's been said many times over the years, that apple's problems with this has been so severe that it's cost them marketshare. Marketshare that they were unlikely to get back.
  • Reply 10 of 49
    boogabooga Posts: 1,077member
    At least this analyst speculates on iMacs and PowerBooks, which make sense. Other analysts and rumor sites have tried to pass off iBooks as likely first-MacIntel machines. It makes no sense to replace a sub-$80 part with a above-$200 part and make your entry-level machine faster than your pro machine-- it's silly and just not going to happen.



    Unless you use more than 4GB of RAM in your iMac, you're unlikely to miss the 64-bitedness, and the Yonah should be pretty competitive with the G5's in the current iMacs.
  • Reply 11 of 49
    melgrossmelgross Posts: 31,656member
    Quote:

    Originally posted by nagromme

    "first of the Intel- based Macs, which would be much earlier than the company?s June guidance."



    Apple's "June guidance," just to be clear, was that Intel Macs would ALREADY be IN THE MARKET... BY June. Many people think Apple said Intel Mac would APPEAR in JUNE. Possible. But it's a latest date, nothing more.



    "Macworld show could turn out to be a "circus""



    I think Apple will limit MWSF to one or two big announcements, and save others for press events in the coming weeks after MWSF. This makes a bigger impact: multiple stories in the press, week after week. Which ones will be at MWSF and which ones will be later? That might just depend on practical factors like which ones will come off the assembly lines first. Conclusion: don't be too upset if you favorite dream doesn't come true on Jan. 10. It MIGHT just come true in the following month.



    "iPod Multiplier Effect"



    Hmmm... that beats "iPod Halo Effect," but I'm still lobbying for the term "iPod Gateway Effect."




    I don't know. "By June" means only that new Macs would be out "by June". It doesn't mean anything else. It doesn't mean May, or April, or March. All it means is that by the time the Dev Conf, Apple would have machines out.



    Of course, that's going by the schedule that Jobs presented us with LAST June. Things change.



    Also, I was always suspicious of that schedule. I've had the feeling, and I've said this here before, that we were being snookered. I'm not sure that, no matter how we parse his words, that Apple always intended to get at least some stuff out the doors well in advance.



    I felt more sure of that when it came out that 10.4.3 has Rosetta emulating a G4 with Altivec rather than the G3 without it that he has said it would emulate.



    Also, that 10.4.4 equalized the two versions for the first time.



    But, wouldn't it be a hoot if they came out with nothing?



    Oops, I'd better sell my stock now, it just took another leap, and if that happens, it will plummet.
  • Reply 12 of 49
    melgrossmelgross Posts: 31,656member
    Quote:

    Originally posted by Booga

    At least this analyst speculates on iMacs and PowerBooks, which make sense. Other analysts and rumor sites have tried to pass off iBooks as likely first-MacIntel machines. It makes no sense to replace a sub-$80 part with a above-$200 part and make your entry-level machine faster than your pro machine-- it's silly and just not going to happen.



    Unless you use more than 4GB of RAM in your iMac, you're unlikely to miss the 64-bitedness, and the Yonah should be pretty competitive with the G5's in the current iMacs.




    Yeah, well, don't forget that Yonah is also 32 bit. And will iMac buyers miss the 64 bitness?
  • Reply 13 of 49
    Quote:

    Originally posted by melgross

    I'm not sure that, no matter how we parse his words, that Apple always intended to get at least some stuff out the doors well in advance.



    I think that is exactly what nagromme means. By June Xth, 2006 could mean anything up to that date, including well before.



    I think Apple probably realizes that they need to make this transition happen sooner rather than later. As they get closer to June, their sales are going to reflect people waiting for new Intel-based Macs. So the sooner the get at least some of the line moved over the less impact this will be. It will also serve notice for any developers who might be dragging their feet.
  • Reply 14 of 49
    nagrommenagromme Posts: 2,834member
    Quote:

    Originally posted by melgross

    I've had the feeling, and I've said this here before, that we were being snookered. I'm not sure that, no matter how we parse his words, that Apple always intended to get at least some stuff out the doors well in advance.



    Under promise, over deliver!



    Also, predicting a complex hardware/software launch, involving many partners, a year ahead, is not a precise science. I'm sure Apple didn't KNOW the real final unveiling date, back at WWDC. So their timeframe was bound to be stated conservatively. It was bound to be a "worst case."
  • Reply 15 of 49
    melgrossmelgross Posts: 31,656member
    Quote:

    Originally posted by nagromme

    Under promise, over deliver!



    Also, predicting a complex hardware/software launch, involving many partners, a year ahead, is not a precise science. I'm sure Apple didn't KNOW the real final unveiling date, back at WWDC. So their timeframe was bound to be stated conservatively. It was bound to be a "worst case."




    The thing is, they may have known EXACTLY what that date was going to be. They just didn't want anyone to know because of that so called Osbourn Effect.



    Get people to buy up to the last minute before the introduction.



    The only thing that bothers me, and it could be part of the deception, if indeed products will be coming out in January, that we are not seeing the normal drying up of supplies in the dealer channels being reported.
  • Reply 16 of 49
    Quote:

    Originally posted by melgross

    The thing is, they may have known EXACTLY what that date was going to be. They just didn't want anyone to know because of that so called Osbourn Effect.



    While there may be some truth to this reasoning. It is also important to note that Sometimes What Everyone Remembers Is Wrong.



    Quote:

    Originally posted by melgross

    we are not seeing the normal drying up of supplies in the dealer channels being reported.



    Could still be a little bit early for that.
  • Reply 17 of 49
    toweltowel Posts: 1,479member
    Quote:

    Originally posted by melgross

    The only thing that bothers me, and it could be part of the deception, if indeed products will be coming out in January, that we are not seeing the normal drying up of supplies in the dealer channels being reported.



    It could also be part of the plan. Given the magtnitude of this change, it wouldn't surprise me if Apple sold PPC and Intel Macs side-by-side for a while. Especially PB's, since there will surely be pro folks who need new machines but don't want to rush into bleeding-edge x86 issues.
  • Reply 18 of 49
    melgrossmelgross Posts: 31,656member
    Quote:

    Originally posted by Chris Cuilla

    While there may be some truth to this reasoning. It is also important to note that Sometimes What Everyone Remembers Is Wrong.







    Could still be a little bit early for that.




    Yes, I know. But I was there at the time, and Cringely is inncorrect as well. He wasn't there at the time. The Osbourn 2 was very competitive with the Kaypro. Or would have been, if it came out.



    The Kaypro's were praised at the time, but were nothing special as far as advances went. The problems Osbourn had went beyond the announcement of a not shipping product. But the idea is valid.



    Anyway, I did say "so called".
  • Reply 19 of 49
    boogabooga Posts: 1,077member
    Quote:

    Quote:

    Originally posted by booga

    Unless you use more than 4GB of RAM in your iMac, you're unlikely to miss the 64-bitedness, and the Yonah should be pretty competitive with the G5's in the current iMacs.



    Originally posted by melgross

    Yeah, well, don't forget that Yonah is also 32 bit. And will iMac buyers miss the 64 bitness?



    I think I made that point. No, no one will miss the 64-bittedness unless they had more than 4GB of RAM in their iMac. I suspect the number of people for whom that is true is zero. Other than that it's pretty much just bragging rights. Although on the Intel side there are several code optimizations that x86-64 (EM64T) allows, performance is performance, and Yonah has it.
  • Reply 20 of 49
    melgrossmelgross Posts: 31,656member
    Quote:

    Originally posted by Booga

    Originally posted by melgross

    Yeah, well, don't forget that Yonah is also 32 bit. And will iMac buyers miss the 64 bitness?








    I think I made that point. No, no one will miss the 64-bittedness unless they had more than 4GB of RAM in their iMac. I suspect the number of people for whom that is true is zero. Other than that it's pretty much just bragging rights. Although on the Intel side there are several code optimizations that x86-64 (EM64T) allows, performance is performance, and Yonah has it.
    [/QUOTE]



    You're right. I read it wrong.



    Somehow, I had you saying iBOOK in that last sentence.
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