Long Term Impact Of The Tuesday Device

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    Posted: 25 October 2001 03:01 PM

    the iBrotha’s and Wilby’s post about buying stock in advance of the Tuesday Device got me thinking…

    If the Tuesday Device is to have a long-term impact on Apple’s stock, it will have to raise Apple’s potential sales beyond the traditional PC market.

    Any thoughts on this?

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  • Posted: 21 October 2001 02:46 PM #1

    When I bought stock last week, I was actually thinking of selling Monday afternoon or Tuesday morning, when it ought to be up several dollars, and buying back once it falls Tuesday following the announcement.

    In fact, I don’t expect the device to have a huge immediate impact on Apple, given the predictions Fred Anderson gave for the current quarter and the current fiscal year.  (But then, as has been widely reported, his predictions were very conservative—essentially a worst-case scenario.)

    On the other hand, the device will confirm what many analysts have been pointing out recently:  that Apple is more a consumer digital device company than a traditional computer maker like Dell.  Analysts and stockholders seem to like this idea, so it may bring the stock up over the next few months.

         
  • Posted: 24 October 2001 08:58 PM #2

    After Tuesday’s announcement, AAPL took the usual slight hit, but it seems to be climbing back up now.  Any thoughts on what it might do between now and MWSF, anyone?  I’ll have to echo Fred Anderson on this one—my “visibility” is not too good, with the economy the way it is.

    I do think that the iPod and the retail stores can benefit each other: people have a place where they can go to play with an iPod and see if they want one, and the stores have a new product to sell, which should attract more customers.

         
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    Posted: 24 October 2001 09:20 PM #3

    I definitely think the iPod will drive traffic into the Apple Stores, but there aren’t enough Apple Stores yet to really make a difference in Apple’s bottom line.

    That said, I think that Fred’s comments were on the conservative side.  I am hoping that iBook/TiBook/iPod sales will combine to lift the company a bit.

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  • Posted: 25 October 2001 08:03 AM #4

    The iPod didn’t cost much to produce, if it’s a near total failure saleswise it may still be a success in generating free ink, and positioning Apple on the high end. Also the form factor can be extended, look for addional thingies to be added, it can be used for mobile camera storage, a digital recorded, and might even plug into a PDA. Don’t expect much for now thru the end of the year.

         
  • Posted: 25 October 2001 08:49 AM #5

    As a stockholder and Mac fan It would be interesting to know what Apple’s margins are on the Ipod. How flexible can they be on pricing which seems the biggest complaint?  Is Apple wise enough to sell an imac/ipod bundle for Xmas? Would Apple consider using the ipod as a loss leader (assuming margins are thin) to garner more mac converts?
          We shall see over the coming months but I see the stock rising into the next year (assuming the stock market behaves)

    A) there are less disadvantages to using a mac in the windows world than a year ago. Soon there will be none.
    B) Apple stores breaking even or slightly profitable is iceing on the cake as they seem designed to educate Wintel users.
    C) All of the technical indicaters are positive on the stock with the exception of Money flow. The big guys are often wrong and recomeding Dell or Ibm won’t have them on the unemployment line too soon.

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    Posted: 25 October 2001 08:58 AM #6

    The iPod costs more to produce than one might think.  As a point of coparison, remember that VST’s Firefly drive that uses the same Toshiba mechanism is is also priced at US$399.  The LCD display, the ear-buds,  the batteries, and the electronics to handle the MP3s are all additional costs.

    As I mentioned in my column yesterday, I don’t think that Apple could charge all that much less for the iPod with its current feature set without dipping into that precious 30% gross margin range.  I am trying to get some specific pricing information on the drive mechanisms in quantity.

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    Editor - The Mac Observer

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  • Posted: 25 October 2001 03:01 PM #7

    On 2001-10-25 11:03, zancudocom wrote:
    ...the form factor can be extended, look for addional thingies to be added, it can be used for mobile camera storage, a digital recorded, and might even plug into a PDA…

    Yes!  I think the iPod represents Apple’s plunge into a whole new market.  The engineers who worked on the iPod now have the experience they need to move on to more sophisticated digital devices.

    Think about it—if you remove the MP3 playing capabilities and add an LCD screen, more RAM, a more complex OS (OS X Light or something), and Inkwell, you’ve got an Apple PDA!

    So I think the long-term significance of the iPod will be big.