Katie MarsalThe poor reception of Windows Vista, along with a strong Mac OS X, will help Apple continue to ship Macs at three times the industry average by the end of the spring, according to BMO Capital Markets.
The researcher maintains that Apple should ship between 2.4 to 2.5 million Macs over the three-month period and that this would equate to about a 39 percent year-over-year surge in Mac shipments — 3.2 times the predicted industry average of just 12.2 percent.
Competitive pricing plays a part in the increased sales. Bachman notes that while Apple's lineup isn't always immediately comparable, a 2.4GHz MacBook at $1,300 is often priced only a few dollars more than the average $1,292 paid for a 13-inch notebook while running faster than most; other configurations trade storage for speed but are still close enough to sway some buyers.
Ironically, however, it may be Microsoft driving customers into Apple's hands. Ongoing jitters regarding bugs and performance in Windows Vista a year and a half after its launch are believed to be driving would-be Windows upgrade customers towards Macs, which are considered by the analyst to be less problematic, simpler, and more secure.
"Thus far, user satisfaction ratings for Vista have been weak, and startup times for Vista have been known to be much slower than the Mac OS X," Bachman says. "Thus, more than 50% of recent customers buying Macs in Apple retail stores are first-time buyers."
He adds that the combined effect of better hardware and software should spill over into 2009, where Macs will help Apple grow shipments 26 percent year over year and could result in just over 3.9 percent world marketshare.
BMO's researcher also estimates more positive news for Apple as a whole in the short term, including the predicted launch of new MacBooks in August that should spark more sales, a halo effect stemming from iPhone 3G, and retail expansion through coming months that increases Apple's exposure in the marketplace.
Notably, Bachman also raises the possibility of an iPhone 3G shortage between launch and the end of July. Although it would limit sales in the short term, it could paradoxically help Apple's share price by suggesting a warm reception to the cellphone's release.
"We believe it is quite possible Apple will run out of phones, post the July 11 launch [but] in the month of July, given some recent production yield issues," he says. "However, we
believe that Apple will be able to catch up with phone demand during the quarter. Hence, from
a stock perspective, near-term lack of availability issues could end up being positive... with headlines reading something akin to near-term demand outpaces supply."
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26 Comments
And look for Windows 7 to be a debacle, too!
Between ever-slipping ship dates, features disappearing from beta versions at the launch and the inevitable trouble caused from trying to be all things to all people (esp. peripheral vendors), it is reasonable to expect that the next Windows version will disappoint, especially in contrast to Apple's well-managed evolution of Mac OS X, which was revolutionary at the start.
So, for the foreseeable future, the question for most people will be whether they prefer the current version of Mac OS X to Windows XP. Microsoft has hit a dead end. If they wish to compete, they are going to have to start from scratch and that may be beyond what that company is able to pull off. We Kool-Aid-drinking, RDF zombies have become acculturated to having to abandon cruft (even if it is not ancient) to keep up with the wishes of our Overlords in Cupertino, but M$ wants every PC be able to run every program ever written and that is just no longer practical.
I've always been proud to be a Mac fan, even when it was unpopular, and now that Apple is really coming on like gangbusters, you may call me smug. Call me what you want, but when you're right, you're right!
I really don't know how else to put this, so I'll just say it. Keith Bachman is an idiot and quite possibly one of the worst analysts covering Apple. Only Toni Sacconaghi and Katy Huberty of Morgan Stanley are worse.
Here's Keith Bachman's estimate for FY2008.
http://www.appleinsider.com/articles...scal_2008.html
Ya. Good Call Idiot!
This was his prediction for Q2.
http://blogs.barrons.com/techtraderd...s/?mod=BOLBlog
Sorry, but I think analysts should be held accountable for their terrible calls.
Apple will sell about 2.6 million macs this quarter. He says 2.4-2.5. We'll see who's right here.
Also, everyone here really needs to watch out for Katy Huberty. She is easily the worst analyst covering Apple. Here was her predictions for last quarter. I pointed out how dumb her call was before eanrings ever happened:
Morgan Stanley analyst Katy Huberty
Profit: $1.10 per share
Revenue: $6.634 billion
Gross margin: 35.8 percent
Macs: 2.02 million
iPhones: 1.0 million
iPods: 8.5 million
Current rating: Overweight
Price Target: $185
If you look at each line item, she made the worst call on Revenue, Mac Sales, iPhone sales and iPod Sales. When I see worst, I mean out of all analysts, she made the worst call on each of these line items. How one could be so obtuse, is beyond me.
http://www.appleinsider.com/articles..._earnings.html
February 25, 2008
BMO Capital analyst Keith Bachman this morning trimmed his price target for Apple (AAPL) to $140 from $160, noting that ?EPS upside relative to our and the Street estimates will more likely come from margin expansion, and less so revenue upside, which also warrants a lower multiple, in our view.?
Bachman actually upped his EPS estimate for the September 2008 fiscal year to $5.09 from $4.90, but he cut FY 2009 to $6.26 from $6.28. He maintains an Outperform rating on the stock, but says that there is now ?clearly less upside?due to fewer revenue catalysts.?
Echoing similar recent comments from other analysts, Bachman wrote today that demand for both iPods and iPhones ?is weaker than we previously anticipated.? He now sees Apple selling 9.5 million iPods and 1.4 million iPhones in the March quarter, down from his previous estimates of 10.5 million iPods and 2.1 million iPhones. For the fiscal year, he now sees 51.1 million iPods, down from 54.6 million, with 7.7 million iPhones, down from 9.3 million. For the calendar year, he now sees 8.5 million iPhones, short of the company?s target of 10 million.
On the other hand, he now sees the company selling 2.06 million Macs in the quarter, up from 1.87 million. For FY ?08, he goes to 9.4 million from 9.1 million, and for ?09, to 11.55 million from 10.99 million.
Apple today is down $2.66, or 2.3%, at $116.80.
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Taken right out of Barrons
http://blogs.barrons.com/techtraderd...s/?mod=BOLBlogNotice he predicted 2.06m Macs, 9.5m iPods and 1.4m iPhones sold in Q2. That's just irrational. Also, notice his prediction for 2009. He thinks Apple is only going to sell 11.55 million iPhones. You can't trust an analyst who can't think objectively and clearly when the market sentiment turns bearish. Analysts really need to be able to analyze the data standing alone. Analysts who allow their financial reasoning to become affected by the mood on Wall Street should be ignored. He shouldn't be allowed to make such awful predictions when the mood is negative and then come out and make obscene revisions to those estimates once the mood on Wall Street becomes positive.
Look at this quote:
Bachman actually upped his EPS estimate for the September 2008 fiscal year to $5.09 from $4.90, but he cut FY 2009 to $6.26 from $6.28. He maintains an Outperform rating on the stock, but says that there is now ?clearly less upside?due to fewer revenue catalysts.?
He sees fewer revenue catalysts going into a year where Apple might quite possibly be seeing its second golden age. Man that's annoying.
Wasn't mac market share growing at 30% even before Vista came out? The whole premise of the article is wrong - Vista didn't cause apple to jump from 12% growth to 30% growth, Apple was already at 30% growth.
Wasn't mac market share growing at 30% even before Vista came out? The whole premise of the article is wrong - Vista didn't cause apple to jump from 12% growth to 30% growth, Apple was already at 30% growth.
Agreed. Keith Bachman is an idiot. He's simply doesn't understand Apple. It's clear by his repetitive stupid calls.