Wall Street not fully appreciating Apple's notebook price cuts
Investment bank Piper Jaffray on Friday called out Wall Street for not fully recognizing the impact of price cuts on Apple's new Mac notebook lines introduced this week, saying the move will in all likelihood boost the company's quarterly Mac growth to respectable rates in line with his model.
Although market research firm NPD won't release data on Mac unit sales for the month of May until Monday, analyst Gene Munster told clients in a research note that he expects sales will be down on a year-over-year basis by approximately 2 - 5% for the month.
That said, he added Apple may remain in position to meet his June quarter estimate of a 10% year-over-year decline in Mac unit growth for the three-month period even if May sales theoretically fell by as much as 28%. (The Street is currently anticipating an 8% yearly decline.)
"This assumes that the month of June is up 5% year-over-year. We believe June could be up 5% year-over-year due to the new Mac portables with reduced pricing that shipped on June 8th," he wrote. "In the month of March new desktops drove NPD units up 3% year-over-year; we believe the changes made in June are more significant, and will likely drive higher growth of about 5%."
Munster, who maintained his Buy rating and $180 price target on the Mac maker, also expects NPD data to indicate that iPod unit sales tracked down 5-10% for the month of May, which would be in-line with his June quarter unit estimate of a 7% growth decline.
"The big picture" is that "[we] believe the Street is underestimating the positive impact of Mac price cuts announced on June 8th," he wrote. "As such, we expect the June quarter to mark the trough for Mac unit growth rates through the balance of CY09 and we believe the Street is not fully appreciating the positive impact of these price cuts on unit growth."
Although market research firm NPD won't release data on Mac unit sales for the month of May until Monday, analyst Gene Munster told clients in a research note that he expects sales will be down on a year-over-year basis by approximately 2 - 5% for the month.
That said, he added Apple may remain in position to meet his June quarter estimate of a 10% year-over-year decline in Mac unit growth for the three-month period even if May sales theoretically fell by as much as 28%. (The Street is currently anticipating an 8% yearly decline.)
"This assumes that the month of June is up 5% year-over-year. We believe June could be up 5% year-over-year due to the new Mac portables with reduced pricing that shipped on June 8th," he wrote. "In the month of March new desktops drove NPD units up 3% year-over-year; we believe the changes made in June are more significant, and will likely drive higher growth of about 5%."
Munster, who maintained his Buy rating and $180 price target on the Mac maker, also expects NPD data to indicate that iPod unit sales tracked down 5-10% for the month of May, which would be in-line with his June quarter unit estimate of a 7% growth decline.
"The big picture" is that "[we] believe the Street is underestimating the positive impact of Mac price cuts announced on June 8th," he wrote. "As such, we expect the June quarter to mark the trough for Mac unit growth rates through the balance of CY09 and we believe the Street is not fully appreciating the positive impact of these price cuts on unit growth."
Comments
Never!
Wall Street underestimating Apple?
Never!
When will they ever learn?
but the issue now is that even the cheap laptops are so powerful that most people won't want to spend even $1000 on a laptop. if you buy a junky $600 laptop and it dies in 18 months, who cares. buy another junky one that will be a lot better than the one that died and fleabay the parts
i spent around $1500 on a Dell Inspiron around 5 years ago and it's still running strong. it's going to my inlaws in a few weeks. if apple PC's were the same price back then i would have bought an apple. but these days if i buy a new laptop i'd just buy a cheapo for $600 max.
but it really doesn't matter since computers to apple are like windows/office is to MS. no growth but stable cash flow to fund other initiatives. and the iphone is a steamroller. i bet the profit margins on the 3G 8GB are higher than the new 3g S's
I think apple really should be looking into a$200 -$600 netbook type device.
PS an iphone or ipod touch wont do the trick the screen should be atleast 9 inches.
I do commend them on the price reduction though and i might get one now depending on if their speed of putting the core i5 type processors in their laptops.
i bet the profit margins on the 3G 8GB are higher than the new 3g S's
yes, without a doubt they are. That margin matters less once you have an idea of the pace of sales. The original 2G iPhone undoubtedly had a large profit margin compared to the 3G as well, as long as you don't count the years of initial R&D.
Apple has some of the smartest business minds in the world, it staggers me how many people falsely believe they don't know what they're doing.
You may not always like it, but they know exactly what theyre doing
i have a 32GB iphone on pre-order, but with Mac's i think the issue is that Apple did this too late. feature for feature when compared to Dell or HP the new MBP's have price parity.
but the issue now is that even the cheap laptops are so powerful that most people won't want to spend even $1000 on a laptop. if you buy a junky $600 laptop and it dies in 18 months, who cares. buy another junky one that will be a lot better than the one that died and fleabay the parts
i spent around $1500 on a Dell Inspiron around 5 years ago and it's still running strong. it's going to my inlaws in a few weeks. if apple PC's were the same price back then i would have bought an apple. but these days if i buy a new laptop i'd just buy a cheapo for $600 max.
but it really doesn't matter since computers to apple are like windows/office is to MS. no growth but stable cash flow to fund other initiatives. and the iphone is a steamroller. i bet the profit margins on the 3G 8GB are higher than the new 3g S's
NO sir.Your whole post is poorly made. And leaves out the number one reason why the $600 to 3000 dollar dell/hp/ace boxes/ Can never match up against MBP. Never
MAC OSX.
And please feel free to go online and try to match exactly a dell to a mac MBP 13" in all ways .
The apple is still more powerful,does more things perfectly and costs less than dell. And apple does not charge 150 a year on virus protection.
THE physical box is a big issue too. apple has a uni body machine. DELLmay contain abunch of refub parts inside a poorly bulid box.
I wonder exactly why you post on a apple site since ms is much better.
9
I think apple is underestimating the netbook market. My fiance about 3 or 4 months ago bought the $200 eee pc from best buy and has no use for another pc. all she does is view pages like facebook and her email.
I think apple really should be looking into a$200 -$600 netbook type device.
PS an iphone or ipod touch wont do the trick the screen should be atleast 9 inches.
I do commend them on the price reduction though and i might get one now depending on if their speed of putting the core i5 type processors in their laptops.
Why Apple? I understand why other manufacturers have them, but never will anyone explain why Apple should? If your answer is "sales", then LMFAO
Unfortunately this entire argument, despite rearing its ugly head from time to time, is still just as worthless as the first time anyone brought it up.
Apple is not, and has no intention of bringing that cheap of a notebook to market any time in the foreseeable future. And rightfully so. They have the iPhone/iPod touch, which yes, DOES take the place of a worthless netbook.
The 9 in screen argument is senseless. Yes that might work better for someone over the age of 50 who refuses to buy reading glasses, but that is not a marketable demographic.
Anyone who uses an iPhone knows it replaces the need for a netbook, and is much MORE useful in other avenues, such a reliability, battery life, pick up and play fun, fast intuitive navigation. (did I mention NONE of the headaches associated with owning a garbage windows pc?)
Its good for the world that people like you that want to keep regurgitating this nonsense about netbooks DO NOT work for Apple, as they understand that they are garbage and should never receive the Apple or OS X label. Doing so would immediately and permanently degrade both brands.
All for the silly housewives running facebook and email. Not. Gonna. Happen.
Why Apple? I understand why other manufacturers have them, but never will anyone explain why Apple should? If your answer is "sales", then LMFAO
Unfortunately this entire argument, despite rearing its ugly head from time to time, is still just as worthless as the first time anyone brought it up.
Apple is not, and has no intention of bringing that cheap of a notebook to market any time in the foreseeable future. And rightfully so. They have the iPhone/iPod touch, which yes, DOES take the place of a worthless netbook.
The 9 in screen argument is senseless. Yes that might work better for someone over the age of 50 who refuses to buy reading glasses, but that is not a marketable demographic.
Anyone who uses an iPhone knows it replaces the need for a netbook, and is much MORE useful in other avenues, such a reliability, battery life, pick up and play fun, fast intuitive navigation. (did I mention NONE of the headaches associated with owning a garbage windows pc?)
Its good for the world that people like you that want to keep regurgitating this nonsense about netbooks DO NOT work for Apple, as they understand that they are garbage and should never receive the Apple or OS X label. Doing so would immediately and permanently degrade both brands.
All for the silly housewives running facebook and email. Not. Gonna. Happen.
Wow I shouldnt have expected more from this site.
Not all of us like scrolling all the time to read a web page. Bigger screen (or even a bigger resolution for that matter) makes it so i dont have to scroll as much.
Also An apple netbook could just be a bigger ipod touch . Make the internals a little bit beefier but use the same apps and layout as the ipod touch . Call it the ipod tablet and their you have a netbook competitor with apple quality. IF you take out the phone internals of an iphone and use that money to make the processor better to drive a little bit bigger of a screen it can be sold for the same price as an no contract iphone. They would then have something that could generate huge sales with the same apple quality.
Why is it thart hard for apple fanboys to understand?
PS Not all netbook have windows. My fiances netbook runs linux and with some hacking can even run osx actually.
Wow I shouldnt have expected more from this site.
Not all of us like scrolling all the time to read a web page. Bigger screen (or even a bigger resolution for that matter) makes it so i dont have to scroll as much.
Also An apple netbook could just be a bigger ipod touch . Make the internals a little bit beefier but use the same apps and layout as the ipod touch . Call it the ipod tablet and their you have a netbook competitor with apple quality. IF you take out the phone internals of an iphone and use that money to make the processor better to drive a little bit bigger of a screen it can be sold for the same price as an no contract iphone. They would then have something that could generate huge sales with the same apple quality.
Why is it thart hard for apple fanboys to understand?
PS Not all netbook have windows. My fiances netbook runs linux and with some hacking can even run osx actually.
Great article linked by Gruber on Daring Fireball...
http://www.joeydevilla.com/2009/05/2...netbooks-suck/
Netbooks are a transitory, "neither fish-nor-fowl" middleground that will be a footnote in computing history before too long. They offer no significant portability advantages over, say, a 13" full-powered machine, and much less performance. When the current $$ crunch eases and full-powered laptops have dropped even more in price (and increased in performance), netbooks will be obsolete. Apple knows this. The 'low end' is destined to be covered by handhelds.
And please get a new invective... 'fanboys' is soooo passe. Get creative in your ad-hominems...
My fiance ... all she does....
You must be in Massachusetts or some such state. Or else mean fiancee?
Great article linked by Gruber on Daring Fireball...
http://www.joeydevilla.com/2009/05/2...netbooks-suck/
Netbooks are a transitory, "neither fish-nor-fowl" middleground that will be a footnote in computing history before too long. They offer no significant portability advantages over, say, a 13" full-powered machine, and much less performance. When the current $$ crunch eases and full-powered laptops have dropped even more in price (and increased in performance), netbooks will be obsolete. Apple knows this. The 'low end' is destined to be covered by handhelds.
And please get a new invective... 'fanboys' is soooo passe. Get creative in your ad-hominems...
If this is the case explain to me why apple renamed their 13 inch a mac pro and kept the macbook name of the white plastic one?
I am not the only person who thinks apple is doing something with that move and a tablet type device (wether you want to call it a netbook or a tablet) fits that.
Yes I am calling people fanboys. No matter if you have evidence or not you get bashed on this site. Its funny because i dont get treated like this at the actual apple stores. You would think that apple fans would treat people the same way their favorite company treats people.
I am also not the only one who thinks about the apple tablet/netbook thing
http://gizmodo.com/5287488/why-macbo...-else-entirely
Netbooks are a transitory, "neither fish-nor-fowl" middleground that will be a footnote in computing history before too long. They offer no significant portability advantages over, say, a 13" full-powered machine, and much less performance. When the current $$ crunch eases and full-powered laptops have dropped even more in price (and increased in performance), netbooks will be obsolete. Apple knows this. The 'low end' is destined to be covered by handhelds.
I agree, and apparently so does Apple. They are never going to do a "me too" product, and it amazes me how many people think they will or should.
And please get a new invective... 'fanboys' is soooo passe. Get creative in your ad-hominems...
Good call. This is no better or different than calling someone an idiot. An insult is not an argument. I try to avoid discussing anything with anyone who doesn't know the difference.
If this is the case explain to me why apple renamed their 13 inch a mac pro and kept the macbook name of the white plastic one?
I am not the only person who thinks apple is doing something with that move and a tablet type device (wether you want to call it a netbook or a tablet) fits that.
Yes I am calling people fanboys. No matter if you have evidence or not you get bashed on this site. Its funny because i dont get treated like this at the actual apple stores. You would think that apple fans would treat people the same way their favorite company treats people.
I am also not the only one who thinks about the apple tablet/netbook thing
http://gizmodo.com/5287488/why-macbo...-else-entirely
1) Gizmoid is about as reliable as Redmond in assessing anything Mac-related... their knee-jerk anti-Apple attitude is well known.
2) nevertheless, they make my point. Apple may indeed drop prices on a low end FULL-FEATURED Macs. But it won't be a crippled POS netbook, as is the case with the current crop on the PC side.
3) Read your Cyrano on at least showing creativity in your name calling.
I think apple is underestimating the netbook market. My fiance about 3 or 4 months ago bought the $200 eee pc from best buy and has no use for another pc. all she does is view pages like facebook and her email.
I think apple really should be looking into a$200 -$600 netbook type device.
PS an iphone or ipod touch wont do the trick the screen should be atleast 9 inches.
I do commend them on the price reduction though and i might get one now depending on if their speed of putting the core i5 type processors in their laptops.
the asians have always been in the commodity low margin market. Jack Welch killed a few of GE's businesses when he first took over becuase the koreans or someone else were making irons cheaper and most people didn't care who made it as long as it was an iron at a cheap price.
same with netbooks. the idea was first tried by Larry Ellison and others back in the 1990's and it failed. today everything is integrated on the motherboard so it's financially viable to build these at a low price. same reason why HP is outselling Dell. HP computers aren't better than Dell and HP still uses the same sell in bulk to retailers model. back in the 1990's when everything was a separate add-in card Dell had the advantage due to it's build to order and only keep 2 days of inventory on hand model. once everything became integrated on the motherboard Dell lost the advantage because now HP could make a computer just as cheap and not worry about writing off inventory because it didn't sell them in time.
Apple might get into the game, but probably only next year at the earliest. Larabee is coming out late this year or early next year.
1) Gizmoid is about as reliable as Redmond in assessing anything Mac-related... their knee-jerk anti-Apple attitude is well known.
2) nevertheless, they make my point. Apple may indeed drop prices on a low end FULL-FEATURED Macs. But it won't be a crippled POS netbook, as is the case with the current crop on the PC side.
3) Read your Cyrano on at least showing creativity in your name calling.
So what about all the apple will never lower notebook prices because they dont need to arguments that i have seen on this site?
Why would apple pretty much make all laptops except for one macbook pro?
Netbooks with the nvidia chips in them can play 720p video . I wouldnt neccesarily call them a pos . You guys are compairing them to a full featured notebook but what if you compair it to an ipod touch? Then a netbook or tablet would be more powerfull.
Also the fact that analysts are now saying that netbooks have been increasing in sales .
http://www.itnews.com.au/News/100159...s-stutter.aspx
http://news.zdnet.co.uk/hardware/0,1...9517285,00.htm
http://seekingalpha.com/article/1107...reality-checks
http://www.technicianonline.com/feat...year-1.1372735
Just because apple says something doesnt mean thats what they really think. With all they have been doing lately it points to a netbook/or tablet.
Keep in mind a netbook is just a term.
NO sir.Your whole post is poorly made. And leaves out the number one reason why the $600 to 3000 dollar dell/hp/ace boxes/ Can never match up against MBP. Never
MAC OSX.
And please feel free to go online and try to match exactly a dell to a mac MBP 13" in all ways .
The apple is still more powerful,does more things perfectly and costs less than dell. And apple does not charge 150 a year on virus protection.
THE physical box is a big issue too. apple has a uni body machine. DELLmay contain abunch of refub parts inside a poorly bulid box.
I wonder exactly why you post on a apple site since ms is much better.
9
go to fatwallet, most people don't care. they see a computer as a computer. they don't care if it's OS X or Winders. they will look at 2 computers and buy the cheaper one even if the other one has a better LCD and other features. for them it's not going to change the user experience and AV software doesn't cost $150 a year. i haven't bought it in years, but i think it's like $20 a year
So what about all the apple will never lower notebook prices because they dont need to arguments that i have seen on this site?
Why would apple pretty much make all laptops except for one macbook pro?
Netbooks with the nvidia chips in them can play 720p video . I wouldnt neccesarily call them a pos . You guys are compairing them to a full featured notebook but what if you compair it to an ipod touch? Then a netbook or tablet would be more powerfull.
Also the fact that analysts are now saying that netbooks have been increasing in sales .
http://www.itnews.com.au/News/100159...s-stutter.aspx
http://news.zdnet.co.uk/hardware/0,1...9517285,00.htm
http://seekingalpha.com/article/1107...reality-checks
http://www.technicianonline.com/feat...year-1.1372735
Just because apple says something doesnt mean thats what they really think. With all they have been doing lately it points to a netbook/or tablet.
Keep in mind a netbook is just a term.
All well in good, but the point is simply that, yes, low-end laptops will become cheapter. Duh.
But what will disappear (and Apple will never go into) is crapo junk designed to fill a temporary niche. Yes... netbook is just a term, and one that will not survive the long history of computing.
All well in good, but the point is simply that, yes, low-end laptops will become cheapter. Duh.
But what will disappear (and Apple will never go into) is crapo junk designed to fill a temporary niche. Yes... netbook is just a term, and one that will not survive the long history of computing.
I guess you like to ignore steve jobs right?
"Steve Jobs, Apple's CEO, went on the record at the company's quarterly earnings call last October saying Apple had no plans to enter the netbook market, according to Gizmodo.com. However, he apparently went on to say that the company will wait and see how the market evolves -- and if netbooks start selling well, Apple has "some pretty interesting ideas." "
He didnt say never he said they will wait and see. Which is different then what you guys are saying which is never.
This means their massive investments in a stagnant Microsoft will only weaken their positions further.