Intel under fire: What Wall Street thinks about Apple's new MacBook Pro
Apple has unveiled new products in its MacBook Pro, AirPods, and Apple Music lineups. Here's what analyst thought about the company's latest offerings.
Credit: Apple
The Cupertino tech giant on Monday took the wraps off a new 14-inch MacBook Pro and 16-inch MacBook Pro powered by a pair of upgraded M1 chips: the M1 Pro and M1 Max. In addition, Apple unveiled a new third-generation AirPods model and a cheaper Apple Music Voice Plan.
In the wake of the Oct. 18 event, here's what financial analysts think of Apple's new products -- and how they could contribute to the company's growth moving forward.
Although the flagship announcements were the high-end MacBook Pro models, Chatterjee notes that the cheaper second-generation AirPods and cheaper Apple Music plan could drive an expansion of Apple's total market.
Chatterjee sees the 14-inch MacBook Pro and 16-inch MacBook Pro as "niche high-end" models, given their price points ranging from $1,999 to $3,499. However, the AirPods and Apple Music announcements created a new entry-level for their respective categories.
The analyst maintains his 12-month price target of $180.
Sankar says that the better performance and power efficiency of the new MacBook Pro models could help keep Apple's momentum on track in the premium and professional segments of the PC market. Because of the in-house silicon, he also believes that they'll expand Apple's margins.
"These new MBPs with M1 silicon will aid AAPL in realizing the 3-5% EPS accretion from moving to in-sourced chips (manufactured at TSMC)," Sankar writes. "We believe the Mac Pro and iMac Pro will be the last of the Mac systems to be transitioned [to Apple Silicon]."
The analyst believes that the M1 Pro and M1 Max chips could drive around a $0.10 incremental upside, resulting in a 3% to 5% earnings-per-share accretion. He expects the MacBook Pro models to bring further product differentiation versus Windows notebooks, and could expand the Mac's contribution to Apple's EPS.
Sankar maintains his 12-month Apple price target of $180.
Ives estimates that AirPods could account for around 5% of total revenue for Apple in 2021, and could grow roughly 20% in 2022. Driven by the current AirPods lineup, he believes that Apple's total AirPods sales could reach 100 million units sold that year.
The two new MacBook Pro models, according to Apple, represent more shots at chip stalwarts. He says that the M1 chip overall is changing the game for Apple, and could result in about 30% or so of current MacBook Pro users upgrading their system.
Both of these long-anticipated products are likely to catalyze growth in Apple's hardware segment, Ives notes. Combined with the iPhone 13, the analyst believes that Apple is in the midst of its biggest hardware refresh cycle in a decade with the Oct. 18 event just adding to the tailwinds.
Ives maintains his 12-month Apple price target of $185.
Read on AppleInsider
Credit: Apple
The Cupertino tech giant on Monday took the wraps off a new 14-inch MacBook Pro and 16-inch MacBook Pro powered by a pair of upgraded M1 chips: the M1 Pro and M1 Max. In addition, Apple unveiled a new third-generation AirPods model and a cheaper Apple Music Voice Plan.
In the wake of the Oct. 18 event, here's what financial analysts think of Apple's new products -- and how they could contribute to the company's growth moving forward.
Samik Chatterjee, JP Morgan
JP Morgan lead analyst Samik Chatterjee believes the event can be seen as an attempt by Apple to make small changes to its existing product lineup in an effort to drive adoption across a wider range of price points.Although the flagship announcements were the high-end MacBook Pro models, Chatterjee notes that the cheaper second-generation AirPods and cheaper Apple Music plan could drive an expansion of Apple's total market.
Chatterjee sees the 14-inch MacBook Pro and 16-inch MacBook Pro as "niche high-end" models, given their price points ranging from $1,999 to $3,499. However, the AirPods and Apple Music announcements created a new entry-level for their respective categories.
The analyst maintains his 12-month price target of $180.
Krish Sankar, Cowen & Co.
In a note to investors, analyst Krish Sankar of Cowen believes that new MacBook Pro models could be supportive of his total Apple earnings-per-share estimates. On a similar note, he expects the lower-cost Apple Music plan to make the service more affordable to casual listeners.Sankar says that the better performance and power efficiency of the new MacBook Pro models could help keep Apple's momentum on track in the premium and professional segments of the PC market. Because of the in-house silicon, he also believes that they'll expand Apple's margins.
"These new MBPs with M1 silicon will aid AAPL in realizing the 3-5% EPS accretion from moving to in-sourced chips (manufactured at TSMC)," Sankar writes. "We believe the Mac Pro and iMac Pro will be the last of the Mac systems to be transitioned [to Apple Silicon]."
The analyst believes that the M1 Pro and M1 Max chips could drive around a $0.10 incremental upside, resulting in a 3% to 5% earnings-per-share accretion. He expects the MacBook Pro models to bring further product differentiation versus Windows notebooks, and could expand the Mac's contribution to Apple's EPS.
Sankar maintains his 12-month Apple price target of $180.
Daniel Ives, Wedbush
Wedbush's Daniel Ives says that the Oct. 18 event "did not disappoint" as Apple flexes its muscles ahead of the busy holiday shopping season -- despite the overhang of supply constraints. He calls the new products "the biggest hardware product cycle ... at Apple in roughly a decade."Ives estimates that AirPods could account for around 5% of total revenue for Apple in 2021, and could grow roughly 20% in 2022. Driven by the current AirPods lineup, he believes that Apple's total AirPods sales could reach 100 million units sold that year.
The two new MacBook Pro models, according to Apple, represent more shots at chip stalwarts. He says that the M1 chip overall is changing the game for Apple, and could result in about 30% or so of current MacBook Pro users upgrading their system.
Both of these long-anticipated products are likely to catalyze growth in Apple's hardware segment, Ives notes. Combined with the iPhone 13, the analyst believes that Apple is in the midst of its biggest hardware refresh cycle in a decade with the Oct. 18 event just adding to the tailwinds.
Ives maintains his 12-month Apple price target of $185.
Read on AppleInsider
Comments
You can count on Sankar to state the obvious. It really makes you wonder how he became an analyst.
So, if Nvidia is allowed to buy ARMH, and they sell ARM SoCs for PCs, and Qualcomm sells ARM SoCs for PCs, and MediaTek & Samsung sells ARM SoCs for PCs, and MS actually supports ARM with Windows and full Office, Intel will be in trouble. That's a lot of ifs and ands.
Given Apple's current prices, taking 10% to 15% of the PC market consistently will be a gigantic win for them. If Apple sells a competitive $600 laptop and a competitive $500 desktop, I think they have a shot at 20% PC share. Intel might be in trouble this way. Apple hasn't pulled the trigger on low end Macs yet, and may never will.
The bottom line is that Microsoft follows Apple’s lead and eventually Microsoft is going to have to decide to make their own silicon or not…if they decide to design their own silicon for computing, Intel is in trouble.
x86 is our Cadillacs, they are still around and for some great cars but they are not what they are, everyone else has moved on.
If Intel was smart they would be very careful how they tread around Microsoft.
In other product categories such as iPad and iPod where Apple has dominated, Apple eventually introduced products at every $50 price point -- for iPods it was from $50 to $500; for iPads from $300 to $1200; for iPhones from $300 to $1200. I imagine Apple will eventually sell laptops at price points from around $500 (a MacBook or iBook targeting schools) to $6000. You'll go into an Apple Store with a specific budget looking for a laptop, and Apple will have something at your exact price point. And if at every price point, Apple's laptop is better than an Intel laptop, it's hard to justify buying the Intel. Except for gamers.
Apparently I too have the creds to be an analyst.
Continuing my "stating the obvious" here: just remember that Apple historically hasn't chased profits. They have chased markets where they feel they can improve the status quo from a product perspective (assuming the profits would follow from that mindset). Mr. Cook seemingly has not been quite as dogmatic as Mr. Jobs was in that regard, but for the most part, that's been one of Apple's guiding principles.
Point being: don't expect Apple to chase a market just because they could disrupt it (eg low-end laptops). I don't think they're trying to destroy the x86 market. I do however, think they'll continue to exert downward pressure on prices. So maybe we will see a $700 laptop from Apple, but perhaps no lower.
But then again, what do I know? I'm not even an analyst.
https://insider.office.com/en-us/blog/64-bit-office-for-windows-on-arm
Samik Chatterjee, JP Morgan
JP Morgan lead analyst Samik Chatterjee believes the event can be seen as an attempt by Apple to make small changes to its existing product lineup in an effort to drive adoption across a wider range of price points.---If they are only talking about the AirPods, fine, but they are absolutely clueless when it comes to the MacBook Pros. Two things; 1) all they need to do is see the over the top excitement from almost everyone on youtube. I'd say every one of them did not see the multitude of things Apple released and they were screaming in delight. All of you on this forum know what I'm talking about but these analysts know nothing about the products they are covering, and 2) I forgot what I was going to say because I'm so angry with this analyst who should be fired by JP Morgan for their comments, unless, of course, they are trying for a short sell.
Although the flagship announcements were the high-end MacBook Pro models, Chatterjee notes that the cheaper second-generation AirPods and cheaper Apple Music plan could drive an expansion of Apple's total market.
Chatterjee sees the 14-inch MacBook Pro and 16-inch MacBook Pro as "niche high-end" models, given their price points ranging from $1,999 to $3,499. However, the AirPods and Apple Music announcements created a new entry-level for their respective categories.
---Niche, high-end products? They are what power users want and there are a ton of Apple power users. I can't help it if this analyst is saddled with a Chromebook and hasn't a clue what real people do with computers. As for them being expensive, they aren't when compared to comparable PCs and even a full-blown 16" M1 Max could be paid off with a couple jobs by people using them for their small companies (musicians, photographers, videographers, etc.). They're free coming in the door for larger companies because the increased power and speed means billable work is done quicker. Time is lots of money nowadays and these are not that expensive when you talk about tools of the trade. Canon EOS R5 mirrorless (body only) is $3500 (I've seen these being used by youtubers). Lenses can cost more than a MBP and I haven't the faintest idea how much all the audio equipment costs for music production people. A lot can be done on the Mac but they still need lots of other things. This is not a niche market, it's where a decent portion of Mac purchasers live. These will be used in colleges/universities, small and large businesses, government sites (yes, some are allowed to buy Macs and I see some scientists drooling already--time on supercomputers is not cheap, having one on your desk pays for itself quickly). Just because JPM doesn't do anything other than connect a terminal to a server for all their work doesn't mean that's what everyone else in the world does. In fact, having a person at a company that isn't involved in the businesses Apple sells to discuss anything about Apple is plain stupid.
1) Nobody cares about cores, it’s about work done. Let’s see what the workflow reviews say once MBPs hit decent reviewers (giving the trolls another chance to brush up their tactics).
2) Vendors are badging their own silicon with MS leading the way (more like AMD customising for Playstation) so I don’t see an ARM champion emerging as it’s just a supervisory ISA. When Lenovo & HP announce their chips, it’s over for Intel.
3) Intel isn’t even close. When you look at the products which match Apple’s meagre CPU benchmarks (Cinebench is optimised for x86 AVX2 only - the Embree renderer is Intel’s code) the TDP is 125W with 250W peak.
But most people aren’t aware of this reality. The one place where throwing lots of cores at something everyone will notice is the GPU, because its task is embarrassingly parallel in nature.
There are a number of use-cases where all cores can and will be used to good effect, and the people that use those applications (hopefully!) know what they are. But for Apple’s office suite? More than 2 CPU cores is wasted hardware.