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Piper Jaffray addresses 15 more 'unanswered Apple questions'

Piper Jaffray analyst Gene Munster on Thursday issued a report to clients that analytically addresses 16 more unanswered questions surrounding the Apple story, including some pertaining to the company's iPhone hardware roadmap and approach to the enterprise.

Back in May of 2006, the analyst issued a similar report with comments on more than 20 questions about the Cupertino, Calif.-based company that had been lingering in the minds of investors and enthusiasts. He later followed up by addressing 16 more questions that november.

The latest report addresses a broad spectrum of questions, ranging from Munster's take on the iPhone hardware roadmap to Apple's international retail expansion.

Both the questions and answers are being republished in full in order to offer readers the full benefit of the analyst's insight:

Questions on General Business Operations:

Will Apple alter its pricing strategy?
Apple sells its products at the full MSRP 364 days a year (with one exception on Black Friday). And because its products can garner a premium, we do not expect Apple to alter its stance towards relatively higher prices. From time to time Apple will lower prices to drive demand, as we have seen with the 2/19 shuffle price cut to $49 from $79, and the recent price actions taken in Europe with the iPhone. For more on iPhone pricing, see below. It's important to note, Apple legally can not influence the retail price of its products sold through 3rd parties. Talk that Apple has broad pricing control are false.

How does Apple approach the Enterprise business?
In the past, Apple has indicated that at its core, it is a consumer company. We believe this is still true; however, we believe Apple is slightly changing its perspective on selling to the Enterprise. The recent iPhone software announcements with Exchange support and other enterprise solutions provide Apple with a foot in the door. In fact, 1/3 of all Fortune 500 companies have approached Apple with interest in the iPhone Enterprise Beta program. While Apple will let consumer demand drive the product decisions it makes, the company recognizes that every consumer is likely PC user at work, and we expect the company to focus on improving its outreach to Enterprise users. Overall, we see this as a slight change, and we expect Apple to remain singularly focused on the consumer segment.

Will Apple TV become a full 4th cylinder business, or will it remain a hobby?
Currently, the Apple TV represents a very small part of Apple's overall business. In fact, Steve Jobs refers to it as a "hobby", rather than a complete fourth cylinder of Apple's strategy (along with iPod, iPhone, and Mac). During Macworld, the company acknowledged that it did not get the Apple TV right the first time around. But we believe Apple is more confident in the business after the recently updated software update, internally dubbed "Take 2". Widespread adoption of the product is limited by the need for a broadband internet connection and a widescreen TV, but the movie rentals offering is becoming increasingly robust, and we believe Apple intends to continue innovating on the Apple TV platform. That said, our expectations for the Apple TV business remain conservative.

Mac Related Questions:

Why did Apple stop selling a $999 iMac?
When Apple last redesigned the iMac, in Aug-07, the company dropped the 17" model at the $999 price point. We believe the company ended shipping the 17" iMac simply because it was not selling as well as the 20" model. And it is likely that the company increased the margins on the iMacs by reducing the amount of SKUs in the lineup, particularly with the elimination of an entire screen and form factor size.

How is Mac growth in the education market relative to overall Mac growth?
We believe Apple's growth in the education markets is outpacing its overall Mac growth. And this is significant considering Mac units grew 51% y/y in the March quarter. Specifically, we believe higher ed has been growing significantly faster for Apple than overall Mac units, and the K-12 business has also been a key driver.

What are the key selling points of a Mac?
Mac market share is rising, and we believe consumers are choosing to buy Macs for four reasons: 1) Apple offers unique, eye-catching hardware, 2) Apple's OSX is widely understood to be more secure and stable than Windows, 3) The iLife suite (iTunes, iPhoto, iMovie, etc.) attracts users who are looking for a digital lifestyle solution, 4) Apple has worked to improve the Mac buying experience, especially in its retail stores.

How is Apple approaching Multi-Touch?
We believe the Multi-Touch gestures recently added to the MacBook Air and MacBook Pro are just the beginning of Apple's exploration of Multi-Touch on the Mac. Apple is clearly leveraging its technology portfolio from the iPhone to improve the Mac experience as well, and we believe Apple will continue to add Multi-Touch gestures to its notebooks. Currently, these gestures require the same touch-sensing technology used in the iPhone, but they use a traditional looking trackpad. Eventually, we expect Apple to change the trackpad to backlit color screens for a more dynamic user interface on the Mac. And ultimately, we expect Apple to develop a full touch-screen MacBook, although not until the technology has fully matured over the next 3-5 years. We believe Multi-Touch is a core differentiator of Apple products (relative to other touchscreen devices), and Apple has adequately protected its innovations in order to maintain a leading edge in the touchscreen device categories (phones, portable computing devices like the iPod touch, and Mac notebooks).

How serious is Apple about the enterprise opportunity for the Mac?
When we talk about building products, it's a consumer focus. Choices that favor a consumer and the purchasing behavior of a consumer.Businesses are looking at Mac and its great technology regardless. Could pushing enterprise opportunity hurt the consumer biz? Maybe, there are concerns. We believe that they will always focus on driving the product forward. It's Apple's DNA. Driving forward – not hesitant to eat their young.

In the coming years, how will people use their Macs in ways they aren't today?
In addition to significant advancements in touchscreen features, we expect Apple to continue to invest in the digital lifestyle trend. From the beginning, Apple has led the way with its iLife suite of applications for digital music, movies, and photos. We believe this focus will be primarily driven by software, with periodic updates to the iLife suite. Additionally, we believe that devices in Apple's entertainment ecosystem like the iPod and Apple TV will augment the digital lifestyle trend on the Mac side. The integration between the elements of the ecosystem is a critical piece of the Mac growth, from the Halo Effect of those devices.

On page 2 of 2: What is the iPhone's hardware roadmap?; How is the price a carrier charges for the iPhone set?; What was the driver for the App Store on the iPhone for 3rd party applications?; Is the iPhone cannibalizing iPod sales?; What did Apple management mean when it referred to the iPod as a "Wi-Fi mobile platform"?; How are the Apple stores performing as a business segment?; and What are Apple's plans for international expansion?.