Analysts are not impressed with Apple’s new Power Mac G5 and overall business model.
“At a developer’s conference, Apple touted upcoming new desktop computers as “the world’s fastest.” The boxes will contain the new PowerPC G5 chip manufactured by IBM, which can process twice as many bits of data at a time compared to existing desktop processors. Apple also previewed the new version of its desktop operating system, ‘Panther,’ which will be available by the end of this year. Yet fund managers seem unmoved by speculation about Apple’s pending product rollouts,” reports K.C. Swanson for TheStreet.com.
“‘Apple clearly has great customer loyalty. But they just can’t compete with Microsoft and Intel,” says one fund manager who asked to remain anonymous, calling Apple ‘a classic example’ of a company on the losing end of long-term competitive pressure. ‘It’s been a value stock for a long time. I think we made the decision a long time back on sticking with winners,’ says the manager,” reports Swanson. “Analyst John Park, who covers the stock for Independence Investments, says buysiders are likely to stay on the sidelines until Apple can show progress on profitability and market share.”
“…the G5 chip likely won’t be enough to force a turnaround. After all, prices for the gussied-up computer that incorporates the silicon — the PowerMac G5 — start at $1999. ‘Given how weak the market is, I don’t see the volumes being very exciting, no matter how good the product is,’ says Vincent Colicchio, co-manager of the All-American Equity Fund. I mean, this is a niche company, and where the niche is weak it’s not going to get a lot of interest from the Street,’ he says of Apple. ‘Not to mention that from the competitive standpoint it has higher costs than Wintel,'” reports Swanson.
Swanson reports, “At Merrill Lynch, Michael Hillmeyer has been equally skeptical on the expenses front. ‘Apple’s higher costs force it to charge more for its products than similarly equipped Wintel boxes, thus limiting the company’s ability to retain market share,’ he said in a research note Monday. Hillmeyer has a sell rating on the shares and Merrill has not done recent banking for Apple.”
“As for Apple’s online music venture, analysts are generally taking a wait-and-see approach, though most assume sales won’t offer much of a lift to a total revenue base of nearly $5.8 billion over the past year… The same fund manager who sees Apple as a marginal player says he’s ‘kind of intrigued’ with the potential of a new market, though it’s not enough to make him purchase shares. But Colicchio, another buysider, says it just shows Apple is ‘grasping for growth. The fact that they’re looking in that direction tells me they’re in search of a business model. Which is fine; they should do that — but it tells me there’s a lot of risk,’ he says,” reports Swanson.
Full article here.
Missing a super drive and slower RAM (400MHz DDR is dirt cheap).
Lets just be honest and say we use Macs because we like em better and leave it at that.
This article was probably written by peecee junkies. Die-hard MS-Excel and Word users, who’s knowledge of applications probably ends with MS office.
I have bought a single pc and a single pc laptop all my life before changing back to Mac.
This time, it’s forever.
Since that , I earned myself a $ one million house. I drive aPorsche for week-ends and a Saab Turbo for week-days, a Volvo AWD for bad weather.
Best of all, I’m happy not having to go throug the pains of anything MS or Windows.
I spend a lot less time working.
But I understand these guys; they only get adventureous with other peoples’ money.
They’re the same analists who drew people in in droves to buy tech stocks just before they evaporated right above the brew they were stirring.
Analysts,…………Nah…
I don’t understand how the collective ignorance of the masses can continue to believe and fluff up the “Macs are more expensive than PCs” argument.
Is the public just really stupid? Are analyists who are suppossed experts in their field just REALLY stupid?
Any joe blow consumer (or joe blow expert) can visit the Apple Store and spec out a comparibly priced Mac versus a PC machine.
Mac and PCs have been close to equal in price/performance for years now. What gives?
Even if I wasn’t a Mac user – I wouldn’t be someone out there making broad statements like “Macs are too expensive” and skinning my ignorance like that.
I just don’t understand it.
Do most people REALLY not think for themselves?
It’s apparently obvious now, that Apple’s main focus has been to develop a better mousetrap, rather that “increase it’s marketshare”. Personally, I applaud all the folks at Apple for making sure that the personal computer technology is being pushed to the limit. I shudder to think of the type of computer we would all be using had Apple not taken the bold steps it did long ago (and continues to do so today). If Apple ever does decide to go after the marketshare, all they need do is create a model that beats the pants off the cheaper Wintels, and is priced under $1000; which is what Joe Citizen always looks at first.
Great work Apple! Keep it up!
Proof the analysts are wrong: I just got laid off and I’m saving up my unemployment checks to buy a Dual 2GHz G5. Why am I going for the high-end machine? Because the G5 was made for dual processing and I think this machine’s architecture is just amazing in terms of speed and expandability.
Am I a graphics professional? Nope. I make web sites with PHP/Apache and I write games and music software in C++ and Objective-C.
So what’s the attraction for me? I hate waiting for things to finish, whether it’s booting up or starting an application or running a filter. The quicker it happens the happier I am.
The analysts’ statements about 64-bit machines being somehow fundamentally different from 32-bit machines are completely off the mark, especially in the case of the PowerPC family. But remember, their expertise is in skimming cash, not in thinking critically. It reminds me of Bill Gates’ statement so many years ago that users will never need more than 640K of RAM.
Note to the analysts: I don’t care what the freaking bus width is, I just want excellent performance and a rewarding user-experience. I get both with the dual-processor Macs. I will never, ever buy a Wintel computer because frankly the drones in Redmond (and Santa Clara) just aren’t as wise or considerate as the geniuses in Cupertino.
Aren’t these the same “analysts” that told us to keep buying Enron stock? The whole approach is whacked out in my opinion. If we were talking about cars the text would read like this:
“‘BMW clearly has great customer loyalty. But they just can’t compete with Honda and Toyota,” says one fund manager who asked to remain anonymous, calling BMW ‘a classic example’ of a company on the losing end of long-term competitive pressure. ‘It’s been a value stock for a long time. I think we made the decision a long time back on sticking with winners,’ says the manager,”. “An analyst who covers the stock for Independence Investments, says buysiders are likely to stay on the sidelines until BMW can show progress on profitability and market share.”
“…the 330i likely won’t be enough to force a turnaround. After all, prices for the gussied-up body that incorporates the engine — the 3.3 litre — start at $19999. ‘Given how weak the market is, I don’t see the volumes being very exciting, no matter how good the product is,’ says the co-manager of the All-American Equity Fund. I mean, this is a niche company, and where the niche is weak it’s not going to get a lot of interest from the Street,’ he says of BMW. ‘Not to mention that from the competitive standpoint it has higher costs than Ford,'”.
Sound ridiculous, doesn’t it? Well it is.
This may have been covered here but these analysts are not talking about what we talk about. We talk about what a great machine the G5 is… How sweet it will be to own one etc.. They talk of what kind of return, short or long, that they can gain from owning Apple stock. They talk about nothing we care about. We care if Apple will be in business and innovating so we can buy their stuff… Seems like Apple has that base well covered (the future only looks brighter in that respect). So, now, we can all finish our work, smoke a fatty and sync our iPods… no worries.
Personally I think there’s lot’s of money to be made with Apple stock. I don’t mean to insult anyone’s intelligence here but: As with any stock you buy low and sell high. If you are aware of the market and aware of Apple’s product cycle it’s pretty simple stuff. A couple of weeks ago AAPL was trading at around $13.00. At that time I read a lot of financial news that said AAPL was undervalued. I agreed. AAPL now trades at over $19.00. I’m not so good at math but this seems like a reasonable return.
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