Analyst braces clients of "underwhelming" Apple event
American Technology Research analyst Shaw Wu put out a call to clients on Friday, saying they should be prepared for a slight letdown at Apple's event next Tuesday unless chief executive Steve Jobs pulls a rabbit from his black turtleneck.
"While there is always room for surprise, it seems this event may be somewhat underwhelming versus previous expectations and events," he wrote. "Over the past several days, Apple shares have pulled back as expectations have likely come down."
More specifically, Wu said his check into the company's supply chain have turned up no evidence to suggest a major hardware revelation will take place at the event, which "may be viewed as disappointing" given that some investors previously had high hopes for major Mac-related announcements.
Instead, he sees a "modestly redesigned 4th generation iPod nano and slimmer 2nd generation iPod touch with lower price points and higher storage capacities," but isn't expecting radical changes to the iPod portfolio given the great success and extensive refinement the media players have already undergone.
The analyst maintains that the company's MacBook Pro and MacBook are due for refreshes with more radical redesigns, but aren't likely to be unveiled at Tuesday's event as the focus appears to be on its non-Mac businesses.
"In addition, we are picking up that MacBook Air could see a minor refresh and potential price cut to increase its value proposition as build plans have slowed from earlier robust levels as customers have opted for MacBook or MacBook Pro instead," he wrote.
Some potential "wild card" announcements that could boost sentiment surrounding the event could include "an advanced AppleTV with DVR and TV tuner capabilities" or "new touch form factors (iPod-Mac hybrid) with larger screens," he added.
The AmTech analyst maintained his Buy rating and $220 price target on shares of the Cupertino-based electronics maker, vouching his belief that the company remains the best play in the digital home market and that penetration levels of its Mac and iPhone business segments remain opportunistically low.
"The disturbance in the macroeconomic environment is within lower-income demographics and financial institutions with exposure and impact to overall liquidity," he wrote. "This could certainly spread, but we believe Apple's business will remain strong in the near- to medium-term. Enough high-end consumers are still buying tech, though commodities inflation could pressure future margins."
"While there is always room for surprise, it seems this event may be somewhat underwhelming versus previous expectations and events," he wrote. "Over the past several days, Apple shares have pulled back as expectations have likely come down."
More specifically, Wu said his check into the company's supply chain have turned up no evidence to suggest a major hardware revelation will take place at the event, which "may be viewed as disappointing" given that some investors previously had high hopes for major Mac-related announcements.
Instead, he sees a "modestly redesigned 4th generation iPod nano and slimmer 2nd generation iPod touch with lower price points and higher storage capacities," but isn't expecting radical changes to the iPod portfolio given the great success and extensive refinement the media players have already undergone.
The analyst maintains that the company's MacBook Pro and MacBook are due for refreshes with more radical redesigns, but aren't likely to be unveiled at Tuesday's event as the focus appears to be on its non-Mac businesses.
"In addition, we are picking up that MacBook Air could see a minor refresh and potential price cut to increase its value proposition as build plans have slowed from earlier robust levels as customers have opted for MacBook or MacBook Pro instead," he wrote.
Some potential "wild card" announcements that could boost sentiment surrounding the event could include "an advanced AppleTV with DVR and TV tuner capabilities" or "new touch form factors (iPod-Mac hybrid) with larger screens," he added.
The AmTech analyst maintained his Buy rating and $220 price target on shares of the Cupertino-based electronics maker, vouching his belief that the company remains the best play in the digital home market and that penetration levels of its Mac and iPhone business segments remain opportunistically low.
"The disturbance in the macroeconomic environment is within lower-income demographics and financial institutions with exposure and impact to overall liquidity," he wrote. "This could certainly spread, but we believe Apple's business will remain strong in the near- to medium-term. Enough high-end consumers are still buying tech, though commodities inflation could pressure future margins."
Comments
Whatever, APPL investors buy on rumors and sell on facts-even good ones?!?
Does anyone listen to Shaw Wu? He is about as bad as Prince McClean.
Who is Prince McClean?
It is down over $15 from a few days ago-and this on news that they may have sold 7(!) million iPhone 3Gs already-it looks to be another record MAC quarter-and the Christmas shopping season is right around the corner.
Whatever, APPL investors buy on rumors and sell on facts-even good ones?!?
I think if you're really paying attention to anyone saying they may have already sold 7 million iPhone 3Gs....... you're making a mistake.
If that's the rumor you're looking at, then you'll be willing to buy on the rumor and want to sell when you get the facts.
The phone is going great, but 7 million is crazy.
Does anyone listen to Shaw Wu? He is about as bad as Prince McClean.
1) I am (sort of) OK with some occasional negative news about AAPL, since that allows for upside surprises. There somehow always seems to be a little too much good news impounded into Apple's price.
2) What's with this guy's writing style. Sheesh. He says: "...disturbance in the macroeconomic environment is within lower-income demographics and financial institutions with exposure and impact to overall liquidity" when he means to say "... the current economic slowdown only affects poorer people and investment firms with junk in their portfolios."
I really think that the iPods need wifi. There is just something that is satisfying about the idea of placing your iPod in its charging dock and having it sync. Of course a killer feature would be to include front row so when you hook it into the universal dock you basically have an AppleTv, but I realize that will never happen.
My final concern is that I am worried that all we are going to see is a new shell for the nano, an iPod Touch that looks like an iPhone 3G and maybe a lower prices. Maybe that should be enough and I am being overly demanding, but it just seems like it has been a while (Jan. 07) since we saw Apple sparkle. Maybe I am going to have to wait till Jan 09?
Does anyone listen to Shaw Wu? He is about as bad as Prince McClean.
I think you should apologise to Mr Wu for that comment.
I think if you're really paying attention to anyone saying they may have already sold 7 million iPhone 3Gs....... you're making a mistake.
If that's the rumor you're looking at, then you'll be willing to buy on the rumor and want to sell when you get the facts.
The phone is going great, but 7 million is crazy.
I realize that that number is all speculation-but it is based on some pretty decent anecdotal evidence. While it may be too high, I think Apple's "hope" to sell 3 million is too low.
It won't be of iPhone proportions, but this event has always been a more mild one.
I think you should apologise to Mr Wu for that comment.
Nice.
Mr. Wu, oh great knower of things and usual incorrect pronouncement sayer, please except my most humble apologies for the comparison to Prince McClean.
Does anyone listen to Shaw Wu? He is about as bad as Prince McClean.
TUT TUT!!
Nice.
Mr. Wu, oh great knower of things and usual incorrect pronouncement sayer, please except my most humble apologies for the comparison to Prince McClean.
You are a true gentleman.
New iPod nano
New iPod touch
Slightly cheaper Shuffle
iTunes 8 announcement, but "coming in October"
HD TV shows on iTunes "coming in October"
Blather about iPod and iTunes sales, and some iTunes App Store software packages
So therefore:
No new Macs
No iPod tablet or Mac Tablet
No subscription music service
Who is Prince McClean?
Someone who talks a lot of shit.
Steve Jobs is a busy man and I doubt he would make time to hold a special event if it is no more than a routine refresh of the iPod line-up. So I wonder if there isn't a trick up Apple's sleeve?
We are well overdue for revised MacBooks and although everyone is expecting them to come after September 15th when the current back to college promotion ends, and possibly even later on in October, maybe Apple will surprise everybody.
On the other hand it could be a completely new product, the iTouch, or a dramatically revised piece of software with significant potential, iTunes 8. Whatever it is I think it won't be "underwhelming".
Despite various technical issues the launches of both iPhone 3G and MobileMe have been resounding successes. They have genuinely offered something better than what went before. So I feel optimistic.
I really do want new MacBooks to arrive, though. Everyone has been talking about them all year.
What we will see in my end-of-work-week befuddled opinion:
New iPod nano
New iPod touch
Slightly cheaper Shuffle
iTunes 8 announcement, but "coming in October"
HD TV shows on iTunes "coming in October"
Blather about iPod and iTunes sales, and some iTunes App Store software packages
So therefore:
No new Macs
No iPod tablet or Mac Tablet
No subscription music service
I think you nailed it there. I would also add: No mid-size Mac Pro.
Ironically, any expectations that were assumed were manufactured by these same analysts
Excellent point. I'm looking forward to aapl creeping up instead of down between now and Christmas. Wall Street seems intent on ignoring Apple's performance and focusing on manufactured worries.
Excellent point. I'm looking forward to aapl creeping up instead of down between now and Christmas. Wall Street seems intent on ignoring Apple's performance and focusing on manufactured worries.
Don't bet on it. Looks like this xmas will not be good, since everyone in the US is broke, homeless, losing their jobs, unable to fill their tank and having what money they do have eroded by global inflation.
Other than that Q4 looks good.