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Intel under fire: What Wall Street thinks about Apple's new MacBook Pro

Credit: Apple

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Apple has unveiled new products in its MacBook Pro, AirPods, and Apple Music lineups. Here's what analyst thought about the company's latest offerings.

The Cupertino tech giant on Monday took the wraps off a new 14-inch MacBook Pro and 16-inch MacBook Pro powered by a pair of upgraded M1 chips: the M1 Pro and M1 Max. In addition, Apple unveiled a new third-generation AirPods model and a cheaper Apple Music Voice Plan.

In the wake of the Oct. 18 event, here's what financial analysts think of Apple's new products — and how they could contribute to the company's growth moving forward.

Samik Chatterjee, JP Morgan

JP Morgan lead analyst Samik Chatterjee believes the event can be seen as an attempt by Apple to make small changes to its existing product lineup in an effort to drive adoption across a wider range of price points.

Although the flagship announcements were the high-end MacBook Pro models, Chatterjee notes that the cheaper second-generation AirPods and cheaper Apple Music plan could drive an expansion of Apple's total market.

Chatterjee sees the 14-inch MacBook Pro and 16-inch MacBook Pro as "niche high-end" models, given their price points ranging from $1,999 to $3,499. However, the AirPods and Apple Music announcements created a new entry-level for their respective categories.

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The analyst maintains his 12-month price target of $180.

Krish Sankar, Cowen & Co.

In a note to investors, analyst Krish Sankar of Cowen believes that new MacBook Pro models could be supportive of his total Apple earnings-per-share estimates. On a similar note, he expects the lower-cost Apple Music plan to make the service more affordable to casual listeners.

Sankar says that the better performance and power efficiency of the new MacBook Pro models could help keep Apple's momentum on track in the premium and professional segments of the PC market. Because of the in-house silicon, he also believes that they'll expand Apple's margins.

"These new MBPs with M1 silicon will aid AAPL in realizing the 3-5% EPS accretion from moving to in-sourced chips (manufactured at TSMC)," Sankar writes. "We believe the Mac Pro and iMac Pro will be the last of the Mac systems to be transitioned [to Apple Silicon]."

The analyst believes that the M1 Pro and M1 Max chips could drive around a $0.10 incremental upside, resulting in a 3% to 5% earnings-per-share accretion. He expects the MacBook Pro models to bring further product differentiation versus Windows notebooks, and could expand the Mac's contribution to Apple's EPS.

Sankar maintains his 12-month Apple price target of $180.

Daniel Ives, Wedbush

Wedbush's Daniel Ives says that the Oct. 18 event "did not disappoint" as Apple flexes its muscles ahead of the busy holiday shopping season — despite the overhang of supply constraints. He calls the new products "the biggest hardware product cycle ... at Apple in roughly a decade."

Ives estimates that AirPods could account for around 5% of total revenue for Apple in 2021, and could grow roughly 20% in 2022. Driven by the current AirPods lineup, he believes that Apple's total AirPods sales could reach 100 million units sold that year.

The two new MacBook Pro models, according to Apple, represent more shots at chip stalwarts. He says that the M1 chip overall is changing the game for Apple, and could result in about 30% or so of current MacBook Pro users upgrading their system.

Both of these long-anticipated products are likely to catalyze growth in Apple's hardware segment, Ives notes. Combined with the iPhone 13, the analyst believes that Apple is in the midst of its biggest hardware refresh cycle in a decade with the Oct. 18 event just adding to the tailwinds.

Ives maintains his 12-month Apple price target of $185.



30 Comments

hucom2000 9 Years · 149 comments

Where exactly “ Intel under fire“ In this article? Maybe I missed it…

10 Likes · 0 Dislikes
jimh2 9 Years · 676 comments

"We believe the Mac Pro and iMac Pro will be the last of the Mac systems to be transitioned [to Apple Silicon]."

You can count on Sankar to state the obvious. It really makes you wonder how he became an analyst. 

5 Likes · 0 Dislikes
hackintoisier 6 Years · 86 comments

Not sure how the summaries listed correlate to the opinion that Intel is “under fire.”  

Also, Intel is ramping Alder Lake-S which probably will exceed M1 Max performance (albeit while consuming much more power). Also alder lake will have up to 8 golden cove performance cores and 8 gracemont efficiency cores. Raptor Lake is rumored to launch in 2022 and double the efficiency cores to 16, for a total of 8 + 16 = 24 cores and 32 threads.   Intel is still selling a metric ton of processors to the ecosystem. 80 percent market share. Microsoft just announced that it updated the windows 11 kernel thread scheduler to schedule threads in a manner that takes advantage of the hybrid design. Intel might be coming back. 

Intel and AMD will be in trouble if and when ecosystem partners like Asus, Dell, Lenovo, Razer, Microsoft etc. introduce non-x86 designs. 

I don’t see x86 being in trouble until two things happen. 
First, An ARM vendor emerges that sells an ARM processor to the mass market with performance characteristics on par with Apple silicon or the upcoming x86 designs (or the ecosystem partners develop their own in house designs).  Qualcomm can’t compete with Alder Lake or Zen 4. And as good as Apple silicon is, it can’t run windows natively… and not only that, Dell, Lenovo, Asus can’t put an Apple silicon processor inside of their laptops because Apple doesn’t sell to other people. So for the billions of users out there who don’t use macOS, Apple silicon is not relevant to them.  Now if Apple got into the processor supplier game (it won’t) then that would spell serious trouble for AMD and Intel. 

Second, windows on arm needs to be licensed for broader non-OEM use, and it also has to seamlessly run the applications that people want to use like games, office suite software, content creation software, and so on. 

Until those two things happen, Intel and AMD will be fine. But Apple’s innovations could spur other laptop manufacturers to follow suit and ultimately press Microsoft for a windows on arm solution. Intel and AMD need to tread carefully, and continue to ramp x86 core design production on smaller nodes. ASAP. 

7 Likes · 0 Dislikes
tht 24 Years · 5678 comments

Yeah, agree with the comments here. Intel will not be in trouble until MS supports ARM, and there is a competitive set of merchant ARM PC chips. They might be in trouble if ARM takes data center sales, but this is years out. Nvidia will take a few compute farm sales with GPU compute, but this is probably a smaller fraction of the server market pie.

So, if Nvidia is allowed to buy ARMH, and they sell ARM SoCs for PCs, and Qualcomm sells ARM SoCs for PCs, and MediaTek & Samsung sells ARM SoCs for PCs, and MS actually supports ARM with Windows and full Office, Intel will be in trouble. That's a lot of ifs and ands.

Given Apple's current prices, taking 10% to 15% of the PC market consistently will be a gigantic win for them. If Apple sells a competitive $600 laptop and a competitive $500 desktop, I think they have a shot at 20% PC share. Intel might be in trouble this way. Apple hasn't pulled the trigger on low end Macs yet, and may never will.

3 Likes · 0 Dislikes
MplsP 9 Years · 4053 comments

Apple's switch is a small dent in Intel's actual sales. I think where Intel will come 'under fire' is if/when Apple's move to ARM pushes the rest of the industry. Intel has maintained their position with the x86 architecture mainly through inertia and Microsoft's lack of a fully compatible ARM OS. As many have pointed out here, the architecture is showing its age and limits. If Microsoft actually were to create a viable pathway to switch I have a feeling that Intel's x86 empire will come crashing down in relatively short order.

1 Like · 0 Dislikes