Showtime event 'just the start' of Apple CE push
Apple Computer's special event this Tuesday is just the start of a steady stream of consumer electronics announcements the company plans to make over the next 6 to 9 months, according to analysts at Goldman Sachs.
In a series of recent research notes, a trio of analysts lead by David Bailey said they foresee additional upside opportunities on top of their already-above-consensus earnings estimates for the Cupertino, Calif.-based iPod maker.
Amongst Apple's three-pronged strategy -- Mac, iPod, and new consumer electronics areas-- Bailey said the Mac side is the most under-appreciated, as the company's aggressive pricing on Intel-based offerings would accelerate an upgrade cycle within its installed base and attract new users at a faster pace.
In the more immediate future, the analyst said Apple's upcoming "Showtime" event should recharge the iPod before the crucial holiday shopping season.
"After an 11-month hiatus when almost all of Apple's announcements centered around new Intel-based Macs, we expect Apple to begin to revamp its iPod line-up at its September 12 special event with new higher-capacity flash-based models (replacing the nano and shuffle) and potentially a refresh of the video iPod as well," he wrote.
"In light of potential shortages of Sony's PlayStation 3 and an unproven Zune music/video player from Microsoft, the new iPods should bring current owners back into the market and attract new customers, making iPod once again one of the top gifts this holiday season."
Bailey said Apple's expected iTunes movie service should create a new near-term driver for iPod demand but also raises longer-term possibilities of the company tying its offerings more tightly with home theaters. "The adoption of Apple's movie downloads in the living room is probably gated by the size of the downloads, particularly if Apple begins to offer movies with a higher resolution than what it offers with its TV show downloads today," he wrote.
Still, the analyst believes the most anticipated new product from Apple is a cell phone which he expects to be introduced in the June quarter of next year "although recent checks with the Asia supply chain suggest that Apple is trying to pull the launch into the first quarter."
"Carrying less buzz than iPhone but potentially adding another revenue stream to complement iPods and Macs is Apple's introduction of a digital hub," Bailey said. "The company has created a platform for a digital hub with its Front Row software but would need to add a device to connect iTunes to home theaters to further penetrate this segment."
Similar to Apple's June quarter, the analyst expects strong consumer and education notebook sales to drive above-market unit and revenue growth in the September quarter, at least offsetting any shortfall in iPods on the top line and driving gross margin above the company's 28.4 percent target. More importantly, he said, the company's new iMacs, which start at $999 compared to $1299 in the past, show early evidence that it is willing to price more aggressively to drive incremental share gains. "We think this not-yet-fully-appreciated story is still to come," he added.
Bailey, who recently placed Apple on Goldman's "Americas Conviction Buy List," rates shares of the company a "Buy" with a price target of $85.
"Our new earnings-per-share forecast of $2.26 and $2.78 for calendar 2006 and 2007, respectively (compared to $2.21 and $2.60 previously), higher expected growth, and the corresponding positive impact on cash flow yield underpin our $85 price target versus our prior price target of $77," he wrote.
In a series of recent research notes, a trio of analysts lead by David Bailey said they foresee additional upside opportunities on top of their already-above-consensus earnings estimates for the Cupertino, Calif.-based iPod maker.
Amongst Apple's three-pronged strategy -- Mac, iPod, and new consumer electronics areas-- Bailey said the Mac side is the most under-appreciated, as the company's aggressive pricing on Intel-based offerings would accelerate an upgrade cycle within its installed base and attract new users at a faster pace.
In the more immediate future, the analyst said Apple's upcoming "Showtime" event should recharge the iPod before the crucial holiday shopping season.
"After an 11-month hiatus when almost all of Apple's announcements centered around new Intel-based Macs, we expect Apple to begin to revamp its iPod line-up at its September 12 special event with new higher-capacity flash-based models (replacing the nano and shuffle) and potentially a refresh of the video iPod as well," he wrote.
"In light of potential shortages of Sony's PlayStation 3 and an unproven Zune music/video player from Microsoft, the new iPods should bring current owners back into the market and attract new customers, making iPod once again one of the top gifts this holiday season."
Bailey said Apple's expected iTunes movie service should create a new near-term driver for iPod demand but also raises longer-term possibilities of the company tying its offerings more tightly with home theaters. "The adoption of Apple's movie downloads in the living room is probably gated by the size of the downloads, particularly if Apple begins to offer movies with a higher resolution than what it offers with its TV show downloads today," he wrote.
Still, the analyst believes the most anticipated new product from Apple is a cell phone which he expects to be introduced in the June quarter of next year "although recent checks with the Asia supply chain suggest that Apple is trying to pull the launch into the first quarter."
"Carrying less buzz than iPhone but potentially adding another revenue stream to complement iPods and Macs is Apple's introduction of a digital hub," Bailey said. "The company has created a platform for a digital hub with its Front Row software but would need to add a device to connect iTunes to home theaters to further penetrate this segment."
Similar to Apple's June quarter, the analyst expects strong consumer and education notebook sales to drive above-market unit and revenue growth in the September quarter, at least offsetting any shortfall in iPods on the top line and driving gross margin above the company's 28.4 percent target. More importantly, he said, the company's new iMacs, which start at $999 compared to $1299 in the past, show early evidence that it is willing to price more aggressively to drive incremental share gains. "We think this not-yet-fully-appreciated story is still to come," he added.
Bailey, who recently placed Apple on Goldman's "Americas Conviction Buy List," rates shares of the company a "Buy" with a price target of $85.
"Our new earnings-per-share forecast of $2.26 and $2.78 for calendar 2006 and 2007, respectively (compared to $2.21 and $2.60 previously), higher expected growth, and the corresponding positive impact on cash flow yield underpin our $85 price target versus our prior price target of $77," he wrote.
Comments
1. Cell phones/possibly VOIP phones
2. Video on demand / Television
3. They've already made minor inroads into stereo equipment
4. What else...?
4. What else...?
MacToilet/iPoop
Seat heating with Core duo. iPod Phones included with iTunes streaming from you know where. Available in traditional white (watch for staining) and black matte for an extra few $$!.
Video on Demand - let's get this right: buying a video and downloading it from the Internet is NOT Video on Demand! Traditionally, Video on Demand has been the domain of Intranets due to the sizes of files involved and the STREAMING nature of the product. What Apple MAY offer is a download service for video... and that's all.
Stereo equipment? Ah, no, not really. They made the iPod Hi-Fi, but that's not really 'stereo' is it? It's a single speaker with multiple cones - stereo is two speakers (with or without multiple cones) placed a distance apart (normally twice the distance that they are from the rear walls) to achieve 'stereo' separation. Can't really do that with a iPod Hi-Fi.
So, you got 1. half right - and even that is only a guess by 'informed' sources - informed may be, but a guess none the less.
What is Apple going to release? Who knows! One thing you can be absolutely sure of though is that some people are going to be really, really upset that Apple didn't release product XYZ that they've been waiting soooooo long for.
Like the previous post about the person almost demanding a new MBP! How funny is that! They were only released earlier this year, they've already been updated and yet some people STILL aren't happy! I'd have to ask: what, exactly, are you going to do with all that computational power? Are you actually waiting for the 64 bit processors to be implemented because you use scientific software or mathematical software that would really benefit? Or are you just wanting faster, faster, faster for the sake of it? If you're really going to use it then I can understand your wanting an update - but somehow I doubt that the current MBP is really too slow for your needs.
Feel free to flame me, I'm a big boy and I've been flamed by the best!
Well, if rumors prove correct, they are venturing into:
1. Cell phones/possibly VOIP phones
2. Video on demand / Television
3. They've already made minor inroads into stereo equipment
4. What else...?
Who are you to criticize someone for wanting whats new, better and available(somewhat)?
Don't know about that - VoIP? Where on Earth did you get that idea??? Why would Apple produce a VoIP phone? That makes zero sense given iChat IS a VoIP phone/video conf product!
[SNIP!]
Feel free to flame me, I'm a big boy and I've been flamed by the best!
And the computer with iTunes was a perfect MP3 player and organizer. This sounds allot like the people that said that there was no reason for Apple to enter the MP3 player area because it was owned by entrenched companies that had defined that market.
Never under estimate the disruptive force of an elegant solution. I for one would like to see a real elegant solution here. Let's face it, this is the move of the future and as you point out would leverage what Apple has already in place. It would be great to be able to lick up the phone and not know or care that I was talking through the internet or through my land line. Bits is bits and as more peices fall in place this is better. Yes I do use Skype, but again I have to log in before using it, so I don't use it like an elegant solution. I would like a wireless phone, maybe that doubles as a cell phone that will make calls using the internet when I'm in my house or in a WiFi hotspot, and call using cell protocols when I am away from any hotspots. Don't know if this is an area that Apple will address, but here is to wishing that they do. Again this is a phone that does not need a computer and yet has enough computer in it that it can make Internet calls whenit is in a hotspot, or call like a cell when it is not.
Don't know about that - VoIP? Where on Earth did you get that idea??? Why would Apple produce a VoIP phone? That makes zero sense given iChat IS a VoIP phone/video conf product!
No flaming required but I think a remote iChatAV client on my multi-funtional iPod replacement would be great.
The problem with the all-in-one, do-everything computer is that it's all-in-one and my family can't do everything at once with it (& I can't afford multiple machines). Wouldn't it be great to 'peel' off the app windows from your iMac screen & drop them onto a little gizmo that changes it's appearance to accommodate them?
Is all this posting just playing for time before the 'big event'? - McD
I didn't criticize you, I simply said that the current MBP - that would be the one that IS available, that you CAN currently buy - is a perfectly good machine to do everything that everyone could want - with the possible exception of heavy duty scientific requirements. I don't call that criticizing you, I call that a fact.
I don't blame you for wanting the latest - everyone wants the latest product they can afford to buy, it's only logical. What I can quite understand however is why you want something that doesn't exist, that may not exist any time soon and that you don't know the price of. To put it in plain terms - if you have a need now for a MBP and what you want to do will be addressed adequately by the current unit, then why wait? You could wait forever with that attitude as there's always, ALWAYS going to be something better coming out soon. When do you stop waiting? You're setting yourself up to be disappointed and that's not a good thing to get into.
You ask who I am to criticize you when I didn't criticize anyone. I ask who you are to demand that a company produce a brand new product with all the associated tooling costs TO YOUR TIME FRAME?!
There's really little point making noise about Apple not doing what you want when what you want is clearly petty. And yes, that was a criticism.
I DEMAND a new MBP because with the 64 bit turnover so close why not wait for it right? Why not have the best you can get? I do alot intensive design work. Will merom make a huge difference? Probably not! But hey its doing something right! Im more so just excited for new products. Some people "get off" on having the latest and greatest!
Who are you to criticize someone for wanting whats new, better and available(somewhat)?
Good point - and something I hadn't considered since I'm single. I can understand how frustrating that situation is for you.
I agree, it would be a great idea to have that sort of application portability - and if any software/hardware company is going to do it (or, indeed can do it) it's going to be Apple.
I'm pretty certain that they are working on an all-in-one hand-held device and I'm also pretty certain that a high percentage of my monthly wage will once again be heading to Cupertino once they release it! However, I made the choice to buy a 30GB iPod last week as it does exactly what's advertised, it meets my needs, it's a great device (and the output to my third party headphones is better than with my Nano 2GB... must be something in the amping circuits) and I could afford to buy it.
If (more likely, when) Apple release this update or all-in-one device I'll probably end up buying that one too!
No flaming required but I think a remote iChatAV client on my multi-funtional iPod replacement would be great.
The problem with the all-in-one, do-everything computer is that it's all-in-one and my family can't do everything at once with it (& I can't afford multiple machines). Wouldn't it be great to 'peel' off the app windows from your iMac screen & drop them onto a little gizmo that changes it's appearance to accommodate them?
Is all this posting just playing for time before the 'big event'? - McD
Yes, granted it would be a great device - but that wasn't my point in that particular post. My point was that we haven't even seen a sniff of a VoIP phone - a VoIP MOBILE phone that is... which it would have to be if it's to be part of the iPhone (a self confessed mobile handset - at least according to the pundits).
In addition, it's a great idea, but currently it wouldn't fly. What's the fastest data transfer speed with QoS available from wireless operators? I'm in Australia (which is a data backwater) and the fastest would be the CDMA based EVDO at 1 - 1.5 Mbps. That's fine for VoIP if QoS was implemented on the network. But that's only available in metro areas. Again, that's fine if you live in a metro area or if you work in a metro area.
I simply don't think that wireless data has either the speed, the QoS implementation or the geographic penetration (in the vast majority of countries) to make a VoIP mobile viable. Don't get me wrong, I'd like to see Apple push this particular boundary, but I don't think it's going to happen at this point - it's too far outside their focus at present. Let's not forget that they aren't even a virtual mobile network operator yet!
Add to this the issues with authentication to hotspots, roaming and handover from one proprietary hotspot protocol to another (say Cisco to Nortel or from a Cisco single base to a Nortel Swarm network) and you have things that are almost insurmountable. Not to mention how you would be billed if you're using multiple providers hotspots. No, it's just too hard for too little return. Especially when you consider the main focus of Apple.
And just by the way, Apple wouldn't be the first to have a crack at a VoIP/GSM mobile hybrid - that was done by the South Koreans about 3 years ago... they discovered that the rest of the world just wasn't technically ready for it.
And the computer with iTunes was a perfect MP3 player and organizer. This sounds allot like the people that said that there was no reason for Apple to enter the MP3 player area because it was owned by entrenched companies that had defined that market.
Never under estimate the disruptive force of an elegant solution. I for one would like to see a real elegant solution here. Let's face it, this is the move of the future and as you point out would leverage what Apple has already in place. It would be great to be able to lick up the phone and not know or care that I was talking through the internet or through my land line. Bits is bits and as more peices fall in place this is better. Yes I do use Skype, but again I have to log in before using it, so I don't use it like an elegant solution. I would like a wireless phone, maybe that doubles as a cell phone that will make calls using the internet when I'm in my house or in a WiFi hotspot, and call using cell protocols when I am away from any hotspots. Don't know if this is an area that Apple will address, but here is to wishing that they do. Again this is a phone that does not need a computer and yet has enough computer in it that it can make Internet calls whenit is in a hotspot, or call like a cell when it is not.
ie: 64 bit and leopard.
Sidenote: I appreciate that you can actually argue points instead of attacking the person, like most people on forums! 8)
I don't know, Video on Demand will probably clog the Internet tubes.
A few more times, and it'll get old.
Don't know about that - VoIP? Where on Earth did you get that idea??? Why would Apple produce a VoIP phone? That makes zero sense given iChat IS a VoIP phone/video conf product!
Um,... when's the last time you walked around your house with your iChat phone?
Feel free to flame me, I'm a big boy and I've been flamed by the best!
Taunting others on this board will get you nowhere, junior.
I know exactly what it's like to wait and wait for a new revision or new product. In fact, if you were waiting on a whole new product to be released I'd say that waiting makes sense. But given that it's really only a processor revision (and, yes, this is a fairly big deal - but only to those that are going to use 64 bit to be honest) and given that every day you're without the hardware you need to do what you do you are potentially loosing money, it really does look like the best thing to do is just purchase what is there now.
There's also the revision A thing to be worried about - I don't know about you but I wouldn't buy a revision A product from anyone; there's just too many potential issues.
I'm lucky in that I get to purchase my computer hardware through a business and therefore it's a tax deduction - so yearly updates aren't just nice, they're mandatory! So I don't really mind buying current hardware when the time rolls around.
I know that 64-bit sounds like the ducks guts, but really, we've had 64-bit in PC land for years and it's never really been exploited... maybe Apple will exploit it with Leopard - who knows? Anyway, one thing you can be sure of: Apple will always bring out something new just when you either can't afford it or have just bought the old model! That's life!
As far as arguing points instead of attacking people goes; I've never seen the point in getting all hot under the collar about what someone says but rather to discuss what they say in a way that's hopefully creative and helpful to everyone. And I don't like to be rude to people just because my opinion differs from theirs... just because it's my opinion doesn't make it right!
Have a great day.
But, Yes i do hear you on the fact that the current product is adequate for what most need to do. Which is why no matter the outcome of tomorrow I will be ordering within a week. But why not wait for something that will be a must for compatitibility down the road.
ie: 64 bit and leopard.
Sidenote: I appreciate that you can actually argue points instead of attacking the person, like most people on forums! 8)
That makes zero sense given iChat IS a VoIP phone/video conf product!
You can call a number with iChat? People with phones can call you on iChat?