Wednesday, January 25, 2006, 12:00 pm PT (03:00 pm ET)
Apple seeing strong sales of iMac Core Duo, MacBook ProContrary to recent and unsubstantiated rumors, sales of Apple's new Intel-based iMac Core Duo desktops and MacBook Pro portables both appear to be strong, reports research and investment firm American Technology Research.
In a research note sent to clients on Wednesday morning, analyst Shaw Wu said both of Apple's new Intel Macs are selling well. The analyst believes the strong sales may be fueled by customers who had been holding off their Mac purchases until the Intel models made their debut.
Specifically, Wu said his firm is seeing particular strength in sales to education (K-12 and higher education), content creation, and consumer end markets.
Commenting on the MacBook Pro, the analyst noted that Apple is not expected to ramp production of the new portables until early- to mid-February. "We believe Apple is having some difficulty building enough to meet demand, but we are not too concerned as we believe this is a good problem to have instead of building too many for no demand," Wu wrote.
On the other hand, sales of Apple's PowerPC Macs, including the iMac G5, PowerBook G4, iBook G4, and Mac mini appear to be lagging. "We believe this may be due in part to Apple's marketing message that Intel is much better than PowerPC, and so far price points are comparable with no discounts offered [on the PowerPC Macs]," the analyst added.
Apple's decision to simultaneously market both PowerPC and Intel Macs has caused some customer confusion in the field, Wu said, but he isn't too concerned. "We do not anticipate this to last that long as inventories of PowerPC Macs appear fairly lean at around 3-4 weeks, which is likely the primary reason why Apple hasn't offered discounts."
Additionally, the analyst expects Apple will migrate the remainder of its PowerPC product line to Intel processors within the next two quarters. "Selling two processor families and marketing one as superior to another adds to customer confusion and isn't a sound long-term strategy, in our opinion," Wu wrote.
According to AmTech Research's proprietary checks, Apple's fifth-generation video iPod sales also remain strong and have been met with the least seasonal decline of the entire iPod product family. The firm sees this as a favorable trend for iPod average selling prices, which it is modeling at $210 this quarter (compared to $207 last quarter).
Given all of the above, AmTech believes investors may not be appreciating that Apple still provided guidance to what will likely its second best quarter in the company's near 30-year history. "We remain comfortable with out above guidance March quarter estimates of $4.4B in revenue and 42 cents in earnings-per-share (EPS), above Apple's guidance of $4.3B and 38 cents."
American Technology Research maintains a 'Buy' rating on Apple shares with a price target of $101.
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