Postproduction and broadcast professionals expect to spend more money in 2005 than they did in 2004, according to a Wall Street analyst. In a research note to clients obtained by The Mac Observer, Piper Jaffary analyst Gene Munster told clients that these professionals expected to spend 5.5% more this year than last, with "significantly" higher growth in the High Definition sub-segment of the industry in which Apple competes. In addition, Mr. Munster said that Apple is finding success in the low-end of the market.
Apple CEO Steve Jobs told the world that 2005 would be the year of High Definition (HD), and proceeded to announce HD versions of several Apple products. At this weekis NAB show, Apple also updated Final Cut Pro 5, Shake 4, and Motion 2, all of which cater to the HD market.
Appleis biggest competitor in the digital video market is Avid, which has dominated the market for many years. Mr. Munster believes that Appleis foothold is in the low-end of the market, referring to the software-driven solutions of Final Cut Pro, Motion, Shake, and the companyis other digital video offerings.
Avidis product line encompasses software-only solutions such as Avid Xpress, but also dominates the hardware-end of the business of dedicated editing boards and work stations.
Mr. Munsteris comments regarding this aspect of Appleis business were presented more as an observation than a pronouncement or prediction, and served to offer clarity to his clients on how the DV market is shaping up.
"Every year at NAB," he wrote, "attendees debate potential market share shifts between Avid and Apple in video editing. Our take is unchanged from our 2004 broadcast/postproduction survey. Accordingly, Apple continues to enjoy success at the low-end of the market, which is where the strongest growth is occurring, with Avid maintaining its strength at the high-end. (Apple is effectively a one product solution, while Avid is a product family.)"
Mr. Munster maintained his "Outperform" rating for Appleis stock, which took a hit last week after the company failed to offer guidance past the June quarter. He also maintained his US$52 price target for the stock. AAPL traded higher in the early afternoon session on Wall Street.
*In the interest of full disclosure, the author holds a small share in APPL stock that was not an influence in the creation of this article.