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."

74 Comments

docno42 3761 comments · 16 Years

About 15 years ago

Wall Street underestimating Apple?

Never!

breeze 95 comments · 18 Years

Quote:

Originally Posted by DocNo42

Wall Street underestimating Apple?

Never!

When will they ever learn?

al_bundy 1525 comments · 15 Years

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

majortom1981 308 comments · 16 Years

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.