Kasper JadeNoting that Apple and Sony have collaborated and competed for years, Merrill Lynch said today that the next step between the companies could lead to a full-fledged partnership.
"Why did Steve Jobs say that Apple and Sony could possibly work together on computers and music? We think Apple could introduce products based on the IBM/Sony/Toshiba Cell processor," the analyst said.
Merrill Lynch believes that an Apple/Sony partnership could form around an iTunes-like iMovies store online using the H.264 codec and streaming Sony and Pixar content; a high-performance Apple workstation using Cell for video editing; or a network-centric TV with computing for handling the next-generation of entertainment feeds.
"Our thoughts represent logical conjecture and are not based on knowledge of Apple’s development plans," the firm cautioned. "Such offerings, however, would put Apple at the heart of the HD and digital consumer revolution and provide grist for further earnings increases and stock price appreciation."
Merrill Lynch reiterated its 'Buy' rating on Apple with a new price objective of $102 per share, which is supported by a two-stage discounted earnings model that assumes post-fiscal year 2006 earnings per share growth of 33% for five years followed by sustained EPS growth of 5% per year.
"Alternatively, there should be an increasing real option value embedded in the stock as Apple leverages iPod success into new product lines," the firm said.
Yesterday, UBS also raised its 12-month price target on Apple, citing the upside of Apple's software business while Piper Jaffray maintained an "outperform" rating on Apple.
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24 Comments
how would this affect sony's Connect music store and Walkman lines? \
At the risk of sounding juvenile, my very first 1st post in reply to an appleinsider article thingy !!! yay!!!
I'm afraid I think this is an analyst too far. He's making a hell of a stretch from a comment at a keynote; a comment that was there simply to bitchslap Bill Gates. Bill had hinted at an MS tie up with Sony on music and both Apple and Sony were somwhat pissed off.
There will undoubtedly be co-operation on some fronts over the next couple of years; Sony's Connect is going nowhere and they know it, they will have to choose between MS and Apple at some point, Sony Errricccson seem to be heading MS's way. Steve will be putting on the squeeze for Sony's film content but an iMovie store has gotta be 2 years away at least (Pixar, Disney, Sony? that would be a good start)
I expect there will be a Cell device from apple but it won't be a Mac as such. The ÜberPowerMac will be Power5 based so that bit of analyst spiel is bollocks.
I think this dude has been slaking off at work reading these forums. This conjecture was posted here and other boards since about 3 seconds after Steve said "who knows maybe someday computers and music..." at MWSF
Dude find some other news.
I dunno, I think he may be right. Check out this story about Sony-Ericsson Walkman phones...
Note the formats supported. MP3, AAC, no WMA in sight.
Note also that they didn't say what online store it would work with, if any. The *assumption* is Sony's, but it's bleeding money hand over fist. This may be what Apple needs to get the Sony labels on board at iTMS. "Look, your venture isn't working out, we have the distribution framework in place, and it happens to be the world's most popular. Your phone already plays AAC. Shut down Sony Connect, save yourself some cash, and let us be your partner."
Tis a possibility.