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Analyst: Apple Stock Likely to Rise After iPhone, WWDC

Analyst: Apple Stock Likely to Rise After iPhone, WWDC

by , 8:35 AM EDT, May 23rd, 2007

Many investors rely on the "buy on the rumor, sell on the news" strategy, but that isn't likely to pay off with Apple, according to Piper Jaffray analyst Gene Munster. The company's stock typically rises after big events, and two are scheduled for June: Apple's World Wide Developer Conference, and the iPhone launch.

"Using the closing price the day before events as a base, shares of AAPL have risen an average of 1 percent the day of an event, and rise 3 percent in the week after the event," he said. "Using the closing price the week before events as a base, shares of AAPL have risen 6 percent on average between the week before and the week after an event."

Apple's first big event of June will be its World Wide Developer Conference - the annual gathering of developers coming to learn about coding for Apple's latest products. The company is expected to offer an in-depth look at its next operating system, Mac OS X 10.5, which is due to ship in October. We may also see refreshed MacBook Pro and iMac models announced.

Mr. Munster expects Apple will announce new computers at WWDC because the pro laptop and consumer desktop computers are overdue for updates. On average, Apple's pro-level laptops see an update every 182 days, but the last MacBook Pro refresh happened over 200 days ago. The iMac is in a similar situation. It was last refreshed over 250 days ago, but historically has seen an update on average every 168 days.

Apple's second big event for June will be the iPhone launch. Despite rumors to the contrary, Mr. Munster is certain the combination iPod and smart phone will ship on time. Apple confirmed the iPhone is on schedule, and the likelihood that it will slip seems slim since this is expected to be one of the biggest product launches in the Mac and iPod maker's history.

The iPhone will be available at nearly 2,000 store fronts - both Apple and AT&T - and will also be available on the Apple and AT&T Web sites. The high visibility of the iPhone, coupled with the hype leading up to its release are expected to help drive sales up.

Mr. Munster added "While we expected the maxim 'buy on rumors, sell on news' to hold, we found that historically it has paid to own shares of AAPL heading into events."

Mr. Munster is maintaining his "Outperform" rating and target price of US$140 for Apple stock. Apple is currently trading in the pre-market at $114.50, up 0.98 (0.85%).


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:Biff Posts: 1479 Joined: 08 Apr 2004
Subject:

We'll probably see a couple Mac updates announced around the same time as WWDC. But I'll be very surprised if Steve's keynote touches on anything other than Leopard. I don't think most people yet understand just HOW important Leopard is to Apple's future.

Close Name:Guest
Subject: Gosh...

.. ya think?

Close Name:Guest
Subject:

Depends on how well it actually does. If it doesn't do as well as the hype has projected, then it will do the exact opposite and go down.

Close Name:Guest
Subject: @GUEST

Dude, read the post. He's talking strictly about the bounce immediately following the WWDC keynote. He's not talking about the long term prospects. Obviously, long term will depend on how well it does.

Don't ever bet against Apple.

Close Name:Guest
Subject: My plan

Buy now and hold until Mac has 50% marketshare and iPhone has 10% of phone (and iPod still has 80% of MP3 player market). IOW, hold until about next Christmas...

--Warren Buffet

Close Name:Biff Posts: 1479 Joined: 08 Apr 2004
Subject:

Quote
Guest wrote:
Depends on how well it actually does. If it doesn't do as well as the hype has projected, then it will do the exact opposite and go down.
Wow that was really insightful.

Close Name:Guest
Subject:

Quote
Guest wrote:

Don't ever bet against Apple.


Unless it's the 90s, or like the 90s...

Close Name:Guest
Subject:

Quote
Biff wrote:
Quote
Guest wrote:
Depends on how well it actually does. If it doesn't do as well as the hype has projected, then it will do the exact opposite and go down.
Wow that was really insightful.


That was too!

Close Name:Guest
Subject:

Quote
Guest wrote:
Buy now and hold until Mac has 50% marketshare and iPhone has 10% of phone (and iPod still has 80% of MP3 player market). IOW, hold until about next Christmas...

--Warren Buffet


LOL. Warren Buffet did NOT say that. If anyone thinks that a Mac will have 50% market share or the iPhone will have 10%, they need to pass the pipe.

Close Name:Guest
Subject: Passing the Pipe

I believe the Macs will have a 50 percent market share probably in ten years or less and the Iphones will probably hit 10 percent market share. Great Grandma I spoke with her a couple days ago, she said she saw an Apple Laptop for the first time and found she could surf the web and check e-mails without viruses and worms. She was excited and will replace her PC with an Apple laptop later this year. She really hated getting viruses and no OS support from either the OS vendor or the Hardware vendor leaving her to driving her laptop to a shop and paying them to fix it and being without her laptop for a while.

Maybe Microsoft should include an iron clad virus scanner with the OS otherwise it will continue to lose customers.

A study I read was 500 high school students in 11 high schools were surveyed and found to have Ipods. Not to unreal to expect they might have a 50 percent ownership of Iphones also in two years. The buzz in 8th grade from my daughter is several of her friends are going to get an Iphone and if mom and dad wont pony up they will get summer jobs and buy them. They probably wont get 10 percent in the 40 and over crowd but ya never know but they will get 20 to 60 percent of the 30 and under crowd over the next two years.

Anyway for the first time in like 20 years I am hearing from people who are going to toss the PC when it dies and go Mac and I know people who will be getting Iphones. So I guess Apple will continue down the growth path.

Well that’s just my opinion.

Close Name:Guest
Subject:

Quote
Guest wrote:
I believe the Macs will have a 50 percent market share probably in ten years or less and the Iphones will probably hit 10 percent market share. Great Grandma I spoke with her a couple days ago, she said she saw an Apple Laptop for the first time and found she could surf the web and check e-mails without viruses and worms. She was excited and will replace her PC with an Apple laptop later this year. She really hated getting viruses and no OS support from either the OS vendor or the Hardware vendor leaving her to driving her laptop to a shop and paying them to fix it and being without her laptop for a while.

Maybe Microsoft should include an iron clad virus scanner with the OS otherwise it will continue to lose customers.

A study I read was 500 high school students in 11 high schools were surveyed and found to have Ipods. Not to unreal to expect they might have a 50 percent ownership of Iphones also in two years. The buzz in 8th grade from my daughter is several of her friends are going to get an Iphone and if mom and dad wont pony up they will get summer jobs and buy them. They probably wont get 10 percent in the 40 and over crowd but ya never know but they will get 20 to 60 percent of the 30 and under crowd over the next two years.

Anyway for the first time in like 20 years I am hearing from people who are going to toss the PC when it dies and go Mac and I know people who will be getting Iphones. So I guess Apple will continue down the growth path.

Well that’s just my opinion.


This is the most ignorant post I have read in a long time. Past performance is an indicator of future potential. You comment about Microsoft is juvenile and illustrates your lack of understanding of what the market you speak of actually is. Microsoft is not even part of the market share you speak of. Apple has never been higher than 13% market share, and no PC manufacturer has 50%. If Apple could make it to only half of what you believe it will be, that would be double is lifetime best. Great Grandma was talking about viruses & worms? Well, okay, sure, I’ll believe that I guess, but if she didn’t buy a noname brand, then she would be able to get great support. Dell is famous for their fantastic support, HP/Compaq has great support as well, I personally have loved the support I’ve received from Toshiba for my laptop. But, that’s besides the point. Any serious investor knows that expecting Apple to hit 50% market share is in for a big disappointment. Any serious investor expecting any computer manufacturer to hit that is in for a big disappointment. Good luck with your money.

Close Name:gslusher Posts: 2088 Joined: 13 Nov 2002
Subject:

Quote
Anonymous wrote:
Dell is famous for their fantastic support, HP/Compaq has great support as well, I personally have loved the support I’ve received from Toshiba for my laptop.


Any proof of that statement? It flies in the face of real survey results from Consumer Reports, based upon 23,000 user reports. Manufacturer support was rated for 5,638 laptops and 7,308 desktops. (The rest were for independent services.) The article may require subscriber access, but the ratings below show the overall user rating (number) and symbols for "Solved problem," "Waiting on phone," and "Support staff" (includes how knowledgeable they were and how well they communicated).

++ = best (solid red dot)
+ = better (half red dot)
0 = middle (open dot)
- = worse (half black dot)
-- = worst (solid black dot)
ND = insufficient data

Laptops:

Apple 81/++/++/++
Lenovo/IBM 66/0/-/-
Dell 60/0/-/-
Gateway 57/-/0/0
Toshiba 56/-/0/0
Sony 54/-/0/0
HP 53/-/0/--
Compaq 49/--/--/--

Desktops:

Apple 81/++/++
Dell 56/0/-/0
eMachines 55/-/ND/ND
Sony 54/-/ND/ND
Gateway 53/-/0/0
Compaq 47/--/--/--


Apple was top, by far. HP & Compaq, far from having "great support," came in last. No company other than Apple got even a single +. So, who's making unwarranted extrapolations? Your personal experience, like mine, means nothing in the big picture.


CR also had an article about independent services. From that article:



Quote
You’ve seen the ads. Swarms of geeks parachute in to rescue desperate victims of computer disasters. Our new survey shows that these hired guns usually succeed in their mission, but their help does not come cheap.

Still, think about opening your wallet if you want your Windows-based PC up and running quickly. Support from computer makers remains uneven, so you’ll most likely consider the money well spent.

We drew those conclusions from our first survey to rate both independent and manufacturer tech support, in which the Consumer Reports National Research Center surveyed more than 23,000 users. Independent services trounced all Windows PC manufacturers, who solved a measly 59 percent of problems. Free manufacturer support was often abysmal, succeeding only 53 percent of the time. Extra-cost extended warranties had a slightly higher success rate, 62 percent, but no fewer hassles.

By contrast, independent tech support services affiliated with major retail chains, such as Best Buy’s Geek Squad and Circuit City’s Firedog, solved 84 percent of users’ problems with Windows-based PCs. Other third parties offering in-home and phone support (and sometimes online aid) solved fully 93 percent of problems. Independents also had more knowledgeable staff and better phone responsiveness than computer makers.

Close Name:Guest
Subject:

I don't know about consumer reports, they tend to not have the technical knowledge needed, or have only a small set of sample data (subscribers). I usually avoid consumer reports when dealing with anything technical, and even for stuff like automobiles and other common big purchases, I've lost faith in their assessments over the past decade.

Dell was awarded the SAP Pinnacle Award for Exemplary Customer Satisfaction, Support. I guess that's one piece of evidence.

In 2004 they made some changes and since Dell was long regarded as the leader in customer service, their longtime supporters had an overreaction. Things that they might expect from a lesser company, they would not tolerate from Dell. For instance in June 2004, surveys were showing increased dissatisfaction. By December of that year, they had reversed some of their changes, and Technology Business Reasearch gave them 83 out 100.

Now, Apple getting high ratings from its customers is to be expected with the almost religious following the corporation has. With such a small market share, only those truly dedicated to the Apple mindset are willing to shell out the cash for the overpriced products. While Dell may bounce around the top 3 rated computer manufacturers in terms of satisfactory customer service, it is almost always in the top 2. Even in 2004 when Dell had the big lashback after some changes the ASCI gave Dell a 79 (when Apple got its 81). In 1999, Dell the TBR report put Dell number 1.

So, over the years, yes, Dell has long been known for its customer service. From the time you start to configure your computer to your own personal needs, to any issues that require technical assistance, that's exactly what they are known for.

Close Name:gslusher Posts: 2088 Joined: 13 Nov 2002
Subject:

Quote
Anonymous wrote:
I don't know about consumer reports, they tend to not have the technical knowledge needed, or have only a small set of sample data (subscribers). I usually avoid consumer reports when dealing with anything technical, and even for stuff like automobiles and other common big purchases, I've lost faith in their assessments over the past decade.

Dell was awarded the SAP Pinnacle Award for Exemplary Customer Satisfaction, Support. I guess that's one piece of evidence.

In 2004 they made some changes and since Dell was long regarded as the leader in customer service, their longtime supporters had an overreaction. Things that they might expect from a lesser company, they would not tolerate from Dell. For instance in June 2004, surveys were showing increased dissatisfaction. By December of that year, they had reversed some of their changes, and Technology Business Reasearch gave them 83 out 100.

Now, Apple getting high ratings from its customers is to be expected with the almost religious following the corporation has. With such a small market share, only those truly dedicated to the Apple mindset are willing to shell out the cash for the overpriced products. While Dell may bounce around the top 3 rated computer manufacturers in terms of satisfactory customer service, it is almost always in the top 2. Even in 2004 when Dell had the big lashback after some changes the ASCI gave Dell a 79 (when Apple got its 81). In 1999, Dell the TBR report put Dell number 1.

So, over the years, yes, Dell has long been known for its customer service. From the time you start to configure your computer to your own personal needs, to any issues that require technical assistance, that's exactly what they are known for.


I suspect that CR has greater technical capability with computers than ASCI. In any case, technical capability with computers is pretty much irrelevant to measuring satisfaction. It's really methodology and sample size.

Consumer Reports may well use a larger sample size than ACSI. ACSI says that their data for each company is based upon 250 interviews. They don't say if they discriminate between people who had problems and those who did not. Consumer Reports' survey group is self-selected: people who report on problems they had. They used almost 13,000 reports on manufacturer support.

More to the point, you were talking about SUPPORT. That's NOT what ACSI measures. It measures consumer SATISFACTION. Support is only a part of that. Overall quality, reliability, perceived value for the dollar--those are all part of consumer satisfaction. You're comparing avocados with jellybeans.

Even so, Apple has led Dell in the ACSI since 2004.

You also said that HP/Compaq was noted for great support, yet they are way down the list on the ACSI--currently at the bottom of the companies measured.

The SAP Pinnacle Award for Exemplary Customer Satisfaction has nothing to do with cosumers--it's based entirely upon enterprise customers and represents only the "partners" for SAP, an enterprise software company. I doubt that SAP even deals with Macs, so they wouldn't have any dealings with Apple.

I've read several articles (can't find them right now) that have pointed to a huge difference between Dell's support for enterprise customers and that for consumers. (That has been remarked upon in the TMO forums, as well.)

Close Name:Guest
Subject:

several articles that don't exist? hmmm. well, dell haters aside, that's what they are famous for, great customer support! sorry you hate dell so much for that.

Close Name:Intruder -   TMO Mac Specialist Posts: 3149 Joined: 07 Jul 2004
Subject:

Quote
Anonymous wrote:
several articles that don't exist? hmmm. well, dell haters aside, that's what they are famous for, great customer support! sorry you hate dell so much for that.


Same could be said of your post. Where is the proof that Dell has great customer support? Show us some links that support that contention.

Here are some links that pop up when you do a google search for "Dell great customer support"

http://www.buzzmachine.com/archives/cat_dell.html
http://www.bloggingstocks.com/2007/05/16/dell-sued-over-customer-complaints/
http://www.theinquirer.net/default.aspx?article=31454
http://www.socialcustomer.com/2005/07/all_about_dell_.html

There are many others. Here is an especially sordid one.

I can also cite experiences of some of my co-workers, but you will just claim that I am making them up or that they are lying.

I'm sure you will now claim that they are all just "Dell haters", but the fact of the matter is that Dell support has taken a major downturn in recent years.

Close Name:Guest
Subject:

dell haters!

Close Name:Intruder -   TMO Mac Specialist Posts: 3149 Joined: 07 Jul 2004
Subject:

Quote
Anonymous wrote:
dell haters!


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