Piper Jaffray Finds Macworld Announcements “Underwhelming, As Expected”

| Apple Stock Watch

Piper Jaffray analyst Gene Munster said that today's announcements from Apple at Macworld were "underwhelming," but noted that this had been "expected." Mr. Munster said that the biggest announcement to come from the event was the new 17" MacBook Pro, though the company's software announcements (iLife 09 and iWork 09) continue to represent a, "competitive advantage for Macs over PCs."

Mr. Munster also said that Apple's move to a DRM-free iTunes catalog by the end of the current quarter will have a "slight positive impact" on iPod sales. He believes that DRM restrictions on iTunes music downloads had been a "significant barrier" to many music customers.

As for the keynote, the firm said it believed the lack of what it called any significant updates was reason Apple CEO Steve Jobs did not deliver the keynote, instead having Apple VP Phil Schiller do the honors.

"If Phil Schiller had made a significant announcement," Mr. Munster wrote, "we would have seen that as a sign of a changing-of-the-guard, but that was not the case. In other words, Steve Jobs remains the primary spokesperson for the company and we expect him to continue to appear at special events for all major product announcements. More importantly, this is another sign that Steve Jobs remains the active leader of the company, in our opinion."

Though shares in Apple traded higher during the keynote itself, they gave ground afterwards. AAPL ended the day at US$93.02, down $1.56 (-1.65%). * The lack of significant announcements adds clarity to Steve Jobs'

*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.  

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The stock moved up in anticipation of new products and then dropped when they didn’t appear. Nothing new here.

I think the move to eliminate DRM and simultaneously increase the quality of music at iTunes will stimulate sales. Just removing the DRM probably wouldn’t have done much because many of the people most offended by DRM are also concerned about paying lossless prices for lossy compressed music. Now the convenience factor can play a larger role because it’s difficult to hear any difference between 256 bit AAC and lossless. My lingering concern remains forward compatibility. In 20 years will anything still support the current AAC codec or will I have to convert all my music to a new format? All conversions from one lossy format to another come with a cost in quality, often significant. For that reason my iTunes library is mostly filled with Apple Lossless files ripped from CD.

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