Needham ups estimates, expects "actual" video iPod in '06
New Apple product introductions should accelerate in 2006 as Apple transitions to an all-Intel Mac lineup, continues to build out the iPod platform, and launches its long-anticipated invasion of the digital living room, says Needham & Company.
In a note sent to clients this morning, the investment banking and asset management firm raised its fiscal 2006 earnings per share estimate for the iPod maker from $1.95 to $2.05 and its 2007 estimate from $2.40 to $2.50.Â*
The firm believes Wednesday's earnings announcement was anticlimactic because Steve Jobs had already reported the key metrics of AppleÂ?s December quarter at Macworld on January 10.
"The company reported non-GAAP earnings (before stock-based compensation) of $0.68," wrote analyst Charles Wolf.Â*"However, the stock swooned in after-hours trading apparently because of a 'pause' in Mac shipments near the end of the quarter, and guidance for the second quarter that was perceived as subdued."
However, with iPod and music related sales representing a growing fraction of AppleÂ?s total revenues (59% in the first quarter of 2006 compared to 41% a year ago), Wolf believes seasonal fluctuations in revenues and earnings will inevitably increase.
"The good news is that Apple began its transition to the Intel processor platform almost six months ahead of schedule with the Macworld introductions of the Intel iMac and MacBook," the analyst wrote.Â*"We anticipate that the iBook will migrate to Intel this spring followed by the PowerMac sometime in the summer."Â*
Wolf believes Apple's move to the Intel platform has the potential to "materially increase Mac sales" once the transition is completed.Â*In addition to new Intel Macs, he expects the company will introduce the "actualÂ? video iPod in the first half of the year. The analyst also notes that MicrosoftÂ?s Windows Media Center software has failed to establish "even a beachhead in the living room" because of its complexity. "Apple represents a far better bet to succeed in its effort," he wrote.
Finally, Wolf said recent comments by Steve Jobs and other actions suggest that an iPhone featuring an iTunes music player might be in the planning stages, but is not likely to surface this year.
"Apple remains by far the most exciting story in our universe.Â*Unfortunately, the companyÂ?s share price has risen faster than our fair price, which now stands at $71," Wolf wrote in summary. "However, new revenue streams yet to be announced could trigger an upgrade at some point in 2006."
Needham & Co. maintains a "hold" rating on Apple shares.
In a note sent to clients this morning, the investment banking and asset management firm raised its fiscal 2006 earnings per share estimate for the iPod maker from $1.95 to $2.05 and its 2007 estimate from $2.40 to $2.50.Â*
The firm believes Wednesday's earnings announcement was anticlimactic because Steve Jobs had already reported the key metrics of AppleÂ?s December quarter at Macworld on January 10.
"The company reported non-GAAP earnings (before stock-based compensation) of $0.68," wrote analyst Charles Wolf.Â*"However, the stock swooned in after-hours trading apparently because of a 'pause' in Mac shipments near the end of the quarter, and guidance for the second quarter that was perceived as subdued."
However, with iPod and music related sales representing a growing fraction of AppleÂ?s total revenues (59% in the first quarter of 2006 compared to 41% a year ago), Wolf believes seasonal fluctuations in revenues and earnings will inevitably increase.
"The good news is that Apple began its transition to the Intel processor platform almost six months ahead of schedule with the Macworld introductions of the Intel iMac and MacBook," the analyst wrote.Â*"We anticipate that the iBook will migrate to Intel this spring followed by the PowerMac sometime in the summer."Â*
Wolf believes Apple's move to the Intel platform has the potential to "materially increase Mac sales" once the transition is completed.Â*In addition to new Intel Macs, he expects the company will introduce the "actualÂ? video iPod in the first half of the year. The analyst also notes that MicrosoftÂ?s Windows Media Center software has failed to establish "even a beachhead in the living room" because of its complexity. "Apple represents a far better bet to succeed in its effort," he wrote.
Finally, Wolf said recent comments by Steve Jobs and other actions suggest that an iPhone featuring an iTunes music player might be in the planning stages, but is not likely to surface this year.
"Apple remains by far the most exciting story in our universe.Â*Unfortunately, the companyÂ?s share price has risen faster than our fair price, which now stands at $71," Wolf wrote in summary. "However, new revenue streams yet to be announced could trigger an upgrade at some point in 2006."
Needham & Co. maintains a "hold" rating on Apple shares.
Comments
Originally posted by AppleInsider
company will introduce the "actual? video iPod in the first half of the year.
[ View this article at AppleInsider.com ]
Now what exactly do they mean by 'actual video ipod.' From what i've seen, the current iPods play video quite well.
...a larger screen?
...a dedicated video device?
Very curious...
And PowerMacs this summer! That would be incredibly wonderful! I can't wait to get my hands on one!
Originally posted by ThinkExpensive
Now what exactly do they mean by 'actual video ipod.' From what i've seen, the current iPods play video quite well.
Most of the portable devices intended specifically for playing video have much larger screens so they are easier to watch for long durations when on the go. 5G iPod has video, but it is merely a secondary function.
Originally posted by AppleInsider
"our fair price, which now stands at $71,"
Needham & Co. maintains a "hold" rating on Apple shares
So, Needham & Co. have a target price of $71 for Apple's share price, which is 10% lower than the current price, yet they advise people to hold the stock? How does that work?
Originally posted by SpamSandwich
Good Morning America reported that Disney and Pixar are in talks that could make Jobs the majority owner of Disney.
AFAIK Jobs have 51% of Pixar. How on earth would that work?
I think everybody is looking at Apple through the Hubble these days.
With what chips? Are they predicting Conroe/Woodcrest are going to land ahead of schedule and faster than a Quad G5? That'll be impressive if Intel/Apple manage it.
Originally posted by SpamSandwich
Good Morning America reported that Disney and Pixar are in talks that could make Jobs the majority owner of Disney.
Unlikely. Largest single private shareholder perhaps. 51% of Pixar goes some way to buying a big chunk of Disney.
Congratulations on your recent promotion. Please consider the following a modest proposal and terminate these Disney employees as soon as possible:
John Stossel
Diane Sawyer
The entire cast and crew of "According to Jim"
The executives responsible for green-lighting "According to Jim"
Jimmy Kimmel
Also, please also consider hiring the following people to fill these positions, respectively:
Stephen Colbert
John Stewart
The entire cast and crew of "Arrested Development"
Joss Whedon, Chris Carter & the entire cast and crew of The Screen Savers
Bill Maher
Just as the audio ipod lets you bring your entire music library with you,
the video ipod should let you bring your entire dvd library with you...
Originally posted by sCreeD
Dear Steve Jobs,
Congratulations on your recent promotion. Please consider the following a modest proposal and terminate these Disney employees as soon as possible:
John Stossel
Diane Sawyer
The entire cast and crew of "According to Jim"
The executives responsible for green-lighting "According to Jim"
Jimmy Kimmel
Also, please also consider hiring the following people to fill these positions, respectively:
Stephen Colbert
John Stewart
The entire cast and crew of "Arrested Development"
Joss Whedon, Chris Carter & the entire cast and crew of The Screen Savers
Bill Maher
Dude, John Stossel is the only high-profile Libertarian (other than Howard Stern) left. If he got axed, there would be no more intelligent people on television.
Originally posted by Mr. H
So, Needham & Co. have a target price of $71 for Apple's share price, which is 10% lower than the current price, yet they advise people to hold the stock? How does that work?
Fair value for a stock is what the stock is considered to be worth given its performance based on industry values, and such.
Stocks for some companies such as Apple and MS are priced higher than that because of future expectations of growh and profitability greater than the industry norm.
Originally posted by Anders
AFAIK Jobs have 51% of Pixar. How on earth would that work?
I think everybody is looking at Apple through the Hubble these days.
It's a mistake. It should have been; The largest stockholder in Disney.
Originally posted by sCreeD
Dear Steve Jobs,
Congratulations on your recent promotion. Please consider the following a modest proposal and terminate these Disney employees as soon as possible:
John Stossel
....
Also, please also consider hiring the following people to fill these positions, respectively:
John Stewart
...
So, did your world collapse when John Stewart had John Stossel on as a guest?
So... John Stossel is intelligent & being a Libertarian is a good thing?
Huh. That's some craaaaazy Universe you come from.
And with that, I'll refrain from further politics in this thread.
Originally posted by JeffDM
So, did your world collapse when John Stewart had John Stossel on as a guest?
I missed that one. Do you know where there might be a viewable video for this?
(Not to belabor the point, but did you know these people are Libertarians? ... Dave Barry, Art Bell, Neal Boortz, Drew Carey, Clint Eastwood, Dennis Miller, P. J. O'Rourke, Trey Parker, Penn and Teller, Kurt Russell, Dwight Yoakam...)
Originally posted by SpamSandwich
I missed that one. Do you know where there might be a viewable video for this?
It was The Colbert Report
One of the better ones:
"Why do THEY have to be the only government? Thats monopoly. I would be able to make a better government"
"I can´t see why I can´t fly my plane at 30000 feet in the same vector as your plane. Won´t the invincible hand somehow figure that one out?"
Originally posted by SpamSandwich
Good Morning America reported that Disney and Pixar are in talks that could make Jobs the majority owner of Disney.
Only if Disney will be all "chocolate".