Analyst trims Apple estimates, says Air seeing decreased demand

Posted:
in General Discussion edited January 2014
American Technology Research trimmed its estimates for Mac maker Apple Inc. on Friday, saying that while the company's near term prospects look fine, future quarters may be met by muted demand, particularly for higher-end products like the MacBook Air.



"While we continue to see fairly favorable unit trends in the September quarter with back-to-school, our supply chain checks indicate low visibility in the December and March quarters, which we believe will likely impact build plans," analyst Shaw Wu advised clients in research report.



Based on those findings, Wu said he's decided to once again "err on the conservative side," as he believes tough macroeconomic conditions will lead system builders and distributors to keep their inventory levels low.



"In addition, our supply chain checks indicate a mix shift towards low-end and mid-range Macs as it appears that more affluent consumers may be feeling the effects of a tighter credit environment," he wrote. "MacBook Air sales and build plans appear more modest after more robust levels."



For fiscal 2008, the analyst now estimates Apple to earn $5.29 per share on sales of $32.8 billion, compared to his previous estimate of $5.34 on $32.9 billion. His model for fiscal 2009 now has the company earning $6.15 per share on revenue of $38.8 billion, down from $6.35 on $39.2 billion.



Those estimates factor in changes to his model for the next two quarters: For the current September quarter, Wu expects per share earnings of $1.19 on sales of $8.2 billion, down from $1.24 on $8.3 billion. Revisions to his model for the December holiday quarter have the company earning $1.90 per share on sales of $11.4 billion, down from $1.96 on $11.5 billion.



"We are leaving our Mac assumptions intact at 2.8 million for the September quarter, but lowering our average selling price [estimate] (4 percent quarterly decline vs. our previous view of 2 percent decline) and gross margin assumptions (32.5 percent vs. previous view of 33 percent)," he wrote.



That said, Wu still recommends that investors buy shares of the Cupertino-based electronics maker. He's, however, reduced his 12-month cieling on the company's share price to $205 from $220, which represents 31.5 multiple of his calendar year 2009 earnings estimate of $6.52 per share.



Shares of Apple were trading down $4.25, or 2.78 percent, to 148.40 in afternoon trading on the Nasdaq stock market.
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Comments

  • Reply 1 of 109
    teckstudteckstud Posts: 6,476member
    Da Air is da dud.
  • Reply 2 of 109
    Quote:
    Originally Posted by teckstud View Post


    Da Air is da dud.



    I think that's a bit hard to tell at this point. It may be that everyone who wanted to buy an Air bought one and now things are slipping, or it was doing very well and now things have just returned to a normal pace.



    It could be that the market for laptops that are thin but with a larger footprint is not that large. The rest of the market may want a smaller laptop in one or two other dimensions.



    If it's doing well Apple may refresh it but leave it be, if not Apple will either kill it off or make a smaller laptop. He's hoping for the last option.
  • Reply 3 of 109
    solipsismsolipsism Posts: 25,726member
    The Air can use an update to Montevina, but I can't find any machines currently using the 22mm^2 packages. Anyone one know of any or if these aren't shipping yet?
  • Reply 4 of 109
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by merdhead View Post


    I think that's a bit hard to tell at this point. It may be that everyone who wanted to buy an Air bought one and now things are slipping, or it was doing very well and now things have just returned to a normal pace.



    It could be that the market for laptops that are thin but with a larger footprint is not that large. The rest of the market may want a smaller laptop in one or two other dimensions.



    If it's doing well Apple may refresh it but leave it be, if not Apple will either kill it off or make a smaller laptop. He's hoping for the last option.



    Me too- smaller and add some ports while your at it.

    I would also add that the the Air is usually bought as a secondary computer and that a bad economy is killing anything non-essential.
  • Reply 5 of 109
    More nuggets of wisdom from Wu... funny, those nuggets taste like chicken.
  • Reply 6 of 109
    Quote:
    Originally Posted by teckstud View Post


    Da Air is da dud.



    I agree.... The consumer market for that type of laptop is so small to begin, this news isn't surprising.
  • Reply 7 of 109
    lafelafe Posts: 252member
    Quote:
    Originally Posted by teckstud View Post


    Me too- smaller and add some ports while your at it.

    I would also add that the the Air is usually bought as a secondary computer and that a bad economy is killing anything non-essential.



    I'm not just saying this because I love my MBA . . .



    I think the "secondary computer" market would naturally slip a bit in this economy -- no doubt.



    I also think that the next price drop (especially as flash memory goes down in price) will

    attract a wave of "waiting buyers", and things could swing up again for the MBA. I know

    several people who would love to have one, but said they'd wait a year or two until

    the price came down.



    You really can't beat it for travelling, which I do often.
  • Reply 8 of 109
    Quote:
    Originally Posted by teckstud View Post


    Me too- smaller and add some ports while your at it.

    I would also add that the the Air is usually bought as a secondary computer and that a bad economy is killing anything non-essential.



    Maybe they could add ports if they weren't obsessed with tapering at the moment. Apple seems to be on a form-over function kick lately.



    Buy they could also use smaller connectors. Surely we can let go the full sized USB plug. So you'd have to buy some more cables or adaptors (or they could include them). I think that'd be a great idea if it meant 2 or 3 USB sockets.
  • Reply 9 of 109
    lafelafe Posts: 252member
    Quote:
    Originally Posted by SpamSandwich View Post


    More nuggets of wisdom from Wu... funny, those nuggets taste like chicken.



    Somebody needs to fire that guy. I never see any useful information

    when his name is attached to an "analysis". Murky comments about

    1Q 2009 . . . huh? Like he knows what Steve has up his sleeve that far

    down the road.
  • Reply 10 of 109
    The MacBook Air isn't selling because it's priced $1,100 to much. Think outside the Apple for a second, it uses less material, it has less ports, a slower processor than the MacBook, takes less RAM, can't change the battery and no optical drive? MMMMM should cost less too huh?



    MacBook should cost $999 since that was the price of the iBook it replaced, which cost more to make by the way. So the Air should start at $700.
  • Reply 11 of 109
    I can't imagine the Air being a big part of Apple's Mac unit mix, but I agree that it isn't where the broader market is headed now. The likes of the Eee PC and similar offerings from Dell and others are making better inroads in the "I want another computer that I can travel with" crowd than the Air ever will. That market values style at the high end, but the broader appeal is on cost.



    Hope Apple comes to the table soon. These offerings might be priced appropriately, but they aren't pretty and I will miss OSX when I get one...
  • Reply 12 of 109
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by jawporta View Post


    The MacBook Air isn't selling because it's priced $1,100 to much. Think outside the Apple for a second, it uses less material, it has less ports, a slower processor than the MacBook, takes less RAM, can't change the battery and no optical drive? MMMMM should cost less too huh?



    MacBook should cost $999 since that was the price of the iBook it replaced, which cost more to make by the way. So the Air should start at $700.



    Is this a serious post? Since when do smaller, more advanced electronics cost less than larger ones?
  • Reply 13 of 109
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by aaarrrgggh View Post


    I can't imagine the Air being a big part of Apple's Mac unit mix, but I agree that it isn't where the broader market is headed now. The likes of the Eee PC and similar offerings from Dell and others are making better inroads in the "I want another computer that I can travel with" crowd than the Air ever will. That market values style at the high end, but the broader appeal is on cost.



    Hope Apple comes to the table soon. These offerings might be priced appropriately, but they aren't pretty and I will miss OSX when I get one...



    These offering use small screen and mini-keyboards. They aren't good for doing any real business work. The MBA is designed for the business man (or woman) on the go. The market is definetly smaller than Apple's other notebook markets, but it's probably larger than we once thought as there are now 3 or 4 other OEMs making these ultra-portables using these advanced SFF CPUs.



    A better solution than Eee is the MSI Wind and Mac OS X has been made to work with it.
  • Reply 14 of 109
    Quote:
    Originally Posted by solipsism View Post


    Is this a serious post? Since when do smaller, more advanced electronics cost less than larger ones?



    Short of the SSD disk drive, what's more advanced in the Air? Don't say the processor, that's an old chip in a different package. The have a smaller motherboard, but that's not more "advanced", rather just a set of choices and trade-offs.



    I don't think it should cost $700 though.
  • Reply 15 of 109
    zunxzunx Posts: 620member
    We want to puchase the MacBook Air for our University, but no purchase until it has:



    - Firewire ports (repairs via Target Disk Mode, video from camcorders, etc).

    - True Ethernet port.

    - More USB ports.



    That easy! Is Apple blind?
  • Reply 16 of 109
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by solipsism View Post


    These offering use small screen and mini-keyboards. They aren't good for doing any real business work. The MBA is designed for the business man (or woman) on the go. The market is definetly smaller than Apple's other notebook markets, but it's probably larger than we once thought as there are now 3 or 4 other OEMs making these ultra-portables using these advanced SFF CPUs.



    A better solution than Eee is the MSI Wind and Mac OS X has been made to work with it.



    ???? Say what? A Sony Vaio TZ has an amazing keyboard.

    http://www.pocketables.net/2007/09/review-sony-v-2.html
  • Reply 17 of 109
    I think the information on soft MBA demand going forward is interesting.



    I suspect this may be due to popularity of the pc netbooks. Apple may need to reconsider the MBAs features and price. I don't know if Apple can just upgrade the cpu, add a larger HDD or SSD every few years and keep the same price points with the MBA.
  • Reply 18 of 109
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by merdhead View Post


    Short of the SSD disk drive, what's more advanced in the Air? Don't say the processor, that's an old chip in a different package. The have a smaller motherboard, but that's not more "advanced", rather just a set of choices and trade-offs.



    I don't think it should cost $700 though.



    The SFF package and low TDP costs more. Just check out Intel's Montevina price list, They also have to factor in how many of these chips they are going to produce. Less used chips cost more pre unit to manufacturer. If the MBA is so over priced then why are there competitor with exact same screen, CPU, RAM etc charging more than Apple?.

    Model. . .Speed . . .\tFSB . . .L2 . . TDP \t. .Size. .Price

    T9400\t. .2.53GHz. .\t1066MHz. .\t6MB\t. .35W\t. .35mm. .$316

    SL9400. .1.86GHz\t. .1066MHz. .\t6MB\t. .17W. . 22mm. .$316
  • Reply 19 of 109
    Quote:
    Originally Posted by solipsism View Post


    ... If the MBA is so over priced then why are there competitor with exact same screen, CPU, RAM etc charging more than Apple?



    The competitors are going to compete against the MBA feature for feature though. They're going to compete by offering netbooks that compete on function (ie, internet browsing and office document work) but at a fraction of the price.



    I think Apple could be in a bind here because the netbooks are just so much cheaper. Hell I'm tempted to pick up one of those new Dell ones with linux pre-installed.
  • Reply 20 of 109
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by backtomac View Post


    The competitors are going to compete against the MBA feature for feature though. They're going to compete by offering netbooks that compete on function (ie, internet browsing and office document work) but at a fraction of the price.



    I think Apple could be in a bind here because the netbooks are just so much cheaper. Hell I'm tempted to pick up one of those new Dell ones with linux pre-installed.



    $300 netbooks aren't competing with the MBA. The Lenov X300, VooDoo Envy 133, Sony Viao TZ, and another one I recently heard about but forget the name of is competing with the MBA.
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