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TMO Reports - UBS: Tiger "Key" to Apple's Mac Growth

by , 3:15 AM EDT, April 13th, 2005

With Tuesday's announcement that Mac OS X 10.4 Tiger will be released April 29, UBS Investment Research analyst Ben Reitzes predicted a bright future for Apple Computer's software business Tuesday, saying the company will reap some US$1 billion in total revenue from Tiger and other applications this fiscal year.

"We believe the next big "multiplier" business to get attention will be Apple's software," Reitzes said in a commentary obtained by The Mac Observer. "We believe the math behind Apple's software potential is attractive, making estimates conservative...We believe Apple can benefit from two full months of Tiger sales in its fiscal 3Q05 (June quarter)."

Mr. Reitzes said his firm believes that Apple's software is extremely well suited for "the digital lifestyle" that consumers are rapidly adopting.

"With delays at Microsoft for Longhorn and battles with viruses, we believe the time is right for Apple to regain share on the back of Tiger," he said. "Over 10 million Apple users have still not upgraded to systems that run OSX, and we believe that Tiger may push many over the edge."

UBS estimated the annual revenue run rate of Apple's iTunes business to be $500 million, $400 million for iPod peripherals, $2.5 billion for Apple retail sales and $4 billion for iPod sales.

"With increased sales of Macs and an already large install base of users, we believe the revenue opportunity for software could be significant," Mr. Reitzes wrote. "In fact, one could argue that with its new stores, an enhanced online store, and broadened distribution, this could be Apple's year to see its software sales surge."

Assuming no major "bugs" when Tiger is released, Mr. Reitzes said he believes Apple may see up to 25% of its existing Mac OS X users upgrade to Tiger over the next few quarters, compared to 10-12% for a typical upgrade.

"As a result, we believe our software revenue estimates of $990 million for (fiscal year 2005) and $1.18 billion for (fiscal year 2006) are conservative," he wrote.

Mr. Reitzes also predicted that software could help hardware and predicted a 33% jump in CPU sales for the fiscal year. On the downside, UBS is estimating Power Mac sales will fall 10.7% for the fiscal year while PowerBook sales will go down 12.3%.

Mr. Reitzes is maintaining his 'Buy2' rating on Apple (AAPL) with a price target of $50 per share.

Observer Comments

Show: Subjects Only | Full Comments
View Name:RealityCheck -   Troll Posts: 392 Joined: 06 May 2004
Subject: Apple Pro Market Continues Steep Decline
View Name:Guest
Subject: Good Call, RC
Close Name:rea1itycheck Posts: 23 Joined: 27 Jan 2005
Subject: Apple Pro Market Upside on the Rise

But: mi pene es pequeño

RealityCheck

Close Name:AyaSofya Posts: 137 Joined: 11 May 2004
Subject: A slow news day

The news media has resorted to reporting the routine, today the story is another rash of Windows security problems, oh hum. Anyway with all the bad press that Windows is getting, home users and institutions maybe inclined to swtich to something more secure such as Tiger.

Gotta run, chat with ya later

View Name:Guest
Subject: Yeah,
Close Name:Small White Car Posts: 1950 Joined: 02 Jul 2004
Subject: Re: Yeah,

Quote
Anonymous wrote:
probably not. Institutions do not use Macs due to their lack of user superiority in heavy usage areas when compared to Windows systems.


I've always thought that Mac users had LOTS of 'user superiority.' Unless you mean something else by that phrase.

View Name:Guest
Subject: Hard to tell
View Name:Guest
Subject: Because they aren't
View Name:Guest
Subject: Mac Users
Close Name:acdc1174 Posts: 678 Joined: 16 Apr 2004
Subject:

I think it is interesting that RC cites an article that is almost a year old to point out production flaws in Apple's professional line. ALL computer companies have units that leave the factory with defects, so BFD. The REAL news would be if Apple didn't remedy this problem, or make its consumers whole.

Close Name:Small White Car Posts: 1950 Joined: 02 Jul 2004
Subject: Re: Mac Users

Quote
Anonymous wrote:
What I'm saying is that the mac itself is not user friendly, so a complete computer beginner who has trouble clicking and dragging files let's say, would have an easier time using a PC than a mac.


It's harder to drag files on a Mac then on a PC?

As far as I can tell, they're pretty much the same. Am I missing something?

View Name:MacCentral -   Troll Posts: 17 Joined: 05 Apr 2005
Subject:
View Name:Guest
Subject: Missed
Close Name:Small White Car Posts: 1950 Joined: 02 Jul 2004
Subject: Re: Missed

Quote
Anonymous wrote:
"It's harder to drag files on a Mac then on a PC?

As far as I can tell, they're pretty much the same. Am I missing something?"

Yup...the point.


Well, do you want to try to explain it again? Because that's what I got out of your last post.

View Name:Guest
Subject: What software is it missing?
View Name:Guest
Subject: Point
View Name:Guest
Subject: That's great.
View Name:Guest
Subject: Beginners
Close Name:Small White Car Posts: 1950 Joined: 02 Jul 2004
Subject: Re: Point

Quote
Anonymous wrote:

Beginner computer stuff. Like changing the background, saving and opening files, switching between programs, changing the volume level, running a cmd prompt, viewing hardware settings, changing an IP address, setting up a printer, install software or drivers...beginner computer stuff.


So you're saying this stuff is harder on a Mac?

Nearly ALL of that is in the system prefrence panel. Once you get there everything is labeled clearly and in english. How can it be hard to find ONE thing on the comptuer?

And saving, opening, switching programs...those all use the SAME keyboard shortcuts! Well, I mean they changed "Alt" to "Apple" but other then that it's the same. I just don't undersand how you think using the same keys is "harder" then it would be on another computer.

Alt-Tab ... Apple-Tab ... I don't see the difference.

Close Name:Small White Car Posts: 1950 Joined: 02 Jul 2004
Subject: Re: Beginners

Quote
Anonymous wrote:

Forget it Small White Car, this person is either a troll or is full of it.


You are wiser then I, Guest.

View Name:Guest
Subject: Hey, original!
View Name:Guest
Subject:
View Name:Guest
Subject: RC Wrong Again
Close Name:deasys Posts: 259 Joined: 08 Apr 2003
Subject: Clueless...

Quote
Guest wrote:
Institutions do not use Macs due to their lack of user superiority in heavy usage areas when compared to Windows


Yeah.--you'll never see a Mac-based computer in the real heavy-lifting contest: the supercomputer Top 10.

http://www.top500.org/sublist/System.php?id=7286

View Name:Guest
Subject: Ignorance is bliss - for some anyway
View Name:Guest
Subject: Re: Ignorance is bliss - for some anyway
Close Name:Sydde Posts: 1821 Joined: 30 Aug 2001
Subject: children, children

Quote
Rewording posts is so much fun here. Later.

-sethtv


Ah the joys of allowing unfettered access for posting comments. Heretofore, the posters on this site have been reasonably polite and mature, this kind of pointless nonsense is just plain preschool.

View Name:Guest
Subject: Sorry I Work on both platform and the are not
View Name:Guest
Subject:
Close Name:les aptt Posts: 221 Joined: 19 Nov 2003
Subject:

Or in-house sabotage by disgruntled (BTW, what's a "Gruntle"?) M$ workers.

View Name:Guest
Subject: i love mac people.
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