Analyst: Only 20% of Resellers Have Seen Mac Sales Slowdown [UPDATED]
TMO Reports - Analyst: Only 20% of Resellers Have Seen Mac Sales Slowdown [UPDATED]
by , 12:35 PM EST, February 21st, 2006
Piper Jaffray analyst Gene Munster recently surveyed 15 Apple specialist resellers, finding that only 20% of them have seen "a measurable slowdown in Mac sales due to customers waiting for the Intel transition. The remaining 80% feel that their Mac business has not been impacted."
"We believe concerns about the Intel transition and negative impact on Mac sales over the next 1-2 quarters have been blown out of proportion," the analyst wrote.
The resellers Mr. Munster spoke with were those other than Apple's own retail stores. Sixty percent of them expect their sales of Macs to be up compared to the same time last year, while the other 40% expect to see a flat year-over-year comparison. Mr. Munster thinks Apple's Mac revenue will be up 7% while many others on Wall Street expect it to be down.
He noted, however, that several resellers have seen professional users pass on the MacBook Pro, "letting others be first adopters," as well as express concern about their ability to run Adobe software and other high-end applications.
The iPod Front
Mr. Munster also checked on iPod sales, finding that "nearly all resellers are seeing a drop in iPod sales compared to the holidays, but most indicated that the decline has been 'slight' vs. 'significant.'" He added: "This is not a surprise and we are modeling for iPod units to decline 36% quarter-to-quarter in March."
"Regarding iPod availability," the analyst wrote, "we believe Apple will likely have supply to meet demand in the March quarter. Nearly all (90%) Apple specialist resellers indicated that iPod availability has improved within the last 4-6 weeks. Half of the VARs we spoke with have all iPod models in stock, while the other half are typically only missing either the 30GB or 4GB iPods."
Mr. Munster reiterated his "Outperform" rating on Apple's stock, along with his US$103 price target. Despite the fact that shares have been down recently, he expects over 25% earnings growth for Apple this year, along with Mac market share gains and the introduction of significant new products.
Apple will showcase some "fun new products" during a media event on Feb. 28, and Mr. Munster chimed in late on Tuesday with another research report. "We believe the event will primarily highlight additional new Intel-based Macs," he wrote. "Also, it is possible that the company is set to release new iPods and possibly (but less likely) a larger touch screen iPod. We believe it is unlikely that Apple will launch an 'iPhone' at this event."
He added: "While it is difficult to predict exactly what Apple will announce next Tuesday, it is easier to predict what Apple will announce in the next 12 months (new iBook - 'MacBook,' new Power Mac, larger screen iPod, new iPod shuffle, AirPort Express for video and an Apple 'iPhone'). From an investor's perspective, we believe the best strategy is simply to own AAPL shares in advance of these new products vs. trying to time the exact dates of when such products will be launched."
Beyond this year, Mr. Munster believes that "the Apple story will continue to gain momentum in CY07, as the company is addressing the fastest growing market segments that touch the digital consumer ... Given Apple's current trajectory, legitimate competition in these markets in CY07 is unlikely. While seemingly aggressive, we expect Apple can outperform the competition for multiple years, assuming the current pace of innovation continues."
Apple's stock ended its trading day on Tuesday at $69.37, down 1.31% for the day.
4:05 PM EST: Added information about report issued in response to Feb. 28 Apple media event and changed AAPL stock price.
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