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TMO Reports - Piper Jaffray Raises Apple Target, Says Co. is Hoarding iPod Inventory

by , 12:10 PM EST, November 28th, 2005

Piper Jaffray on Monday raised its 12-month price target for Apple's stock from US$68 to $79. In addition, analysts Gene Munster and Michael Olson detailed the results of the retailer survey they conducted at the end of the holiday weekend, noting that while all 11 third party stores were out of stock of certain iPods, only two of the 10 Apple stores they contacted had any shortages of the popular device.

Mr. Munster and Mr. Olson concluded: "Based on limited iPod availability (during times of peak demand) outside of Apple retail stores and apple.com, we continue to believe that some Street estimates for iPod unit shipments for the December quarter are too high."

They currently expect Apple to ship nine million iPods during the current quarter. "While we do believe slight upside to our estimate is achievable," they wrote in their research report, "we do not expect Apple will be able to ship the number of units that are already anticipated in some Street models."

Looking ahead to 2006, the analysts do not expect Apple to slow down its pace of new iPod introductions, as well as updates to existing models. With the transition to Intel processors expected to begin next year, they also see 2006 as "a significant year for the Mac line, [with] more changes to the Mac lineup than were seen in 2005."

Shortly after noon EST on Tuesday, Apple's stock was trading for $69.73 per share, up 0.56% for the day. While both the Nasdaq and the Dow were down overall, Apple shares were buoyed by not only Piper Jaffray's research report but also comments made by other analysts, as The Mac Observer detailed earlier today.


If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:Tiger Posts: 937 Joined: 17 Jun 2003
Subject: Hoarding?

Not really hoarding if you're selling them all.

Diverted selling maybe. Or constrained supply to outside dealers.

I know, picky picky. But our words are our tools. Let's use them right.

View Name:Guest
Subject: Coaxing folks into the Apple store...
Close Name:otaojones Posts: 157 Joined: 07 Aug 2001
Subject: amazing

the real miracle is that apple set aside any i-pods at all to sell outside of the apple store. Steve could have left them selling clunky hard to use bill gates inspired windows media powered junk. Instead he generously cut them out some inventory that apparently sells itself (undocumented feature) and the babies are crying that they did not get as much as they wanted on their plates.
i remind you all what it was like to walk into one of these stores 3 years ago where there was one sad banged up mac with no ball in the mouse and 5 salesmen attacking you to buy the beige box because its "better" (it came with a big commission and extra sales bonus (undocumented feature) to push it out the door) the reason we have apple stores today is because the Mac's could not get a fair shake in these fine retail establishments in the first place! (ahhh revenge is a dish best served COLD!)

Close Name:gslusher Posts: 2043 Joined: 13 Nov 2002
Subject: What about Apple dealers?

Quote
otaojones wrote:
the real miracle is that apple set aside any i-pods at all to sell outside of the apple store. Steve could have left them selling clunky hard to use bill gates inspired windows media powered junk. Instead he generously cut them out some inventory that apparently sells itself (undocumented feature) and the babies are crying that they did not get as much as they wanted on their plates.
i remind you all what it was like to walk into one of these stores 3 years ago where there was one sad banged up mac with no ball in the mouse and 5 salesmen attacking you to buy the beige box because its "better" (it came with a big commission and extra sales bonus (undocumented feature) to push it out the door) the reason we have apple stores today is because the Mac's could not get a fair shake in these fine retail establishments in the first place! (ahhh revenge is a dish best served COLD!)


Well, your snide comment might apply to stores like Radio Shack, but not to independent Apple dealers. My local Mac dealer uses the iPod just as you describe for Apple stores. That deale is the one being hurt by the likes of Radio Shack, Circuit City, etc.

View Name:Guest
Subject: Interesting site, and very organized too. Good work. to Perc
Close Name:acdc1174 Posts: 677 Joined: 16 Apr 2004
Subject: Re: What about Apple dealers?

Quote
gslusher wrote:
Quote
otaojones wrote:
the real miracle is that apple set aside any i-pods at all to sell outside of the apple store. Steve could have left them selling clunky hard to use bill gates inspired windows media powered junk. Instead he generously cut them out some inventory that apparently sells itself (undocumented feature) and the babies are crying that they did not get as much as they wanted on their plates.
i remind you all what it was like to walk into one of these stores 3 years ago where there was one sad banged up mac with no ball in the mouse and 5 salesmen attacking you to buy the beige box because its "better" (it came with a big commission and extra sales bonus (undocumented feature) to push it out the door) the reason we have apple stores today is because the Mac's could not get a fair shake in these fine retail establishments in the first place! (ahhh revenge is a dish best served COLD!)


Well, your snide comment might apply to stores like Radio Shack, but not to independent Apple dealers. My local Mac dealer uses the iPod just as you describe for Apple stores. That deale is the one being hurt by the likes of Radio Shack, Circuit City, etc.


This isn't snide, it's accurate. Chains like RadioShack, BestBuy, Circuit City have THOUSANDS of locations a piece. For years Mac users couldn't get half-way decent service at any of these locations. That has now since changed (to a degree) since the ascension of the iPod. Distribution of product is governed by two things: First, by the quantity ordered by the retailer and second by the number of units sold and likely to be sold by that particular vendor. If a store (any store ) orders X amount of iPods, Apple will receive that order and make a determination of what percentage of that order will be filled based upon that vendors track record of sales (i.e. how many units they have moved in the past) and potential sales of that order (how many of the units in order X is the vendor likely to sell based on what is known). Then orders are shipped. Many vendors only get a partial fulfillment because Apple does not want a vendor to sit on product that goes unsold and then gets sent back to Apple for restock. Sad but true fact is, big box sotres see more people daily than the mom and pop stores. It might suck, but it makes good business sense to give them the lion's share of product that is allocated to third-party vendors.

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