In a research note published this morning, Analyst Keith Bachman of Banc of America Securities maintains his “neutral” rating on Apple Computer and mentions that “the company is poised to witness customer base expansion in the forthcoming quarters. The analyst expresses his concern, however, regarding Apple Computer’s limited presence in the low-end markets.” The company’s fundamentals remain healthy, Banc of America Securities adds. The target price is set to $35. Full article here.
In related news, analysts at Merrill Lynch yesterday reiterated their ‘buy’ rating on Apple Computer and raised their target price from $32 to $38.
So this guys oppinion is what? He is too cheap to spend the money for a decent computer so he is neutral. The fundamentals remain healthy, so this means they know how to make money.
Is his view of Apple an oxymoron?
First post with something to say other than I am a loser. lol
No, oldmacfan:
” width=”19″ height=”19″ alt=”smile” style=”border:0;” />
There is no necessary conflict between a “neutral” rating and this analyst’s comment that Apple is poised to expand its customer base. He’s suggeting that the recent (large) run up in Apple’s stock price has already baked in an assumption that Apple’s customer base will expand to some extent. CURRENT prices usually reflect the market’s expectations for a company’s future, not just where the company is today. Given the relatively high price for Apple stock (for the current level of profit), he may be right. My sense, however, is that the market has only been optimistic about new successes with iPod and iTunes. If Apple really does start to expand its customer base in computing, I bet we’ll see another substantial bump up in the stock price.
Gentlemen, and gentleladies, place your bets!!
So what you are saying is that I have been an idiot all along?
No, I am the idiot Sputnik?
oldmacfan,
From his statement that Apple does sell inexpensive computers, how do you twist that into thinking that the guy himself is cheap.
Mac fans make know great computers but in general they have the reasoning skills of an evangelical polemist.
hopefully everyone remembers Jobs’ QA remarks stating that a few years ago they decided to focus on iPod/iTunes rather than expanding marketshare via cheap Macs.
The reason is logical. One is a helluva lot easier and also alot more effective at helping the other.
In other words.. iTunes pushes iPods, it spreads Apple style and ease-of-use to Windows users, it pushes Quicktime and even pushes AAC, stalling a Microsoft monopoly… it EVEN helps people find Macs.
Add in some incredible things like the Airport Express, linking iTunes to a .mac account for iChat goodness(wait a few months for this one…) and the iPod in your car means Apple can really do well by selling $300 computers after all–they’re called iPods.
Why does this particular financial analyst feel it necessary to “remain neutral” because Apple isn’t as interested in the “low-end” market as he feels they should be? Would he be equally “neutral” about the companies making the Maserati or the Lotus and chide them for their lack of direct competition with Ford or Honda? I know, I know, another car analogy, but it sure seems to me to fit in this case.
the funny this is they maintain neutral but keep raising their targets. LOL
What I am saying about the analyst is that his belief that Apple needs more cheap systems to compete for market share or even cheaper systems is bunk. I think his perception is askewed by his belief that profit is driven by cheap beige boxes.
Apple doesn’t have the 256 shades of cheap beige boxes like Dell, and they don’t need to to compete. One inexpensive desktop and one laptop is enough.
Apple makes it simple. Dell, doesn’t.
It is my belief that Dell only hurts their long term customer base, by selling the cheap stuff, and when the cycle of people needing to replace their aging cheap beige box comes around again they will be less likely to buy from Dell again.
It would be cool to see Apple’s market share expand a bit. And the best thing would be that it would be expanding because it is better, not due to business shenanigans on Bill Gates part or just to save a few bucks.
Well I was at the apple store and who was at the genius bar but a Windows using iPod lover. And while we waited (and waited) for our respective turns, there were movies on the big screen of the G5. Then somebody started showing off Final Cut Express and some other stuff and I was interested in the PC using dude’s reaction to the Mac stuff.
Steve may say that Apple’s decision to release iTunes for Windows heralded Apple’s not using the iPod to lure Windows switchers, but I think it will happen anyway. Maybe even better if Apple had not released the iPod for Windows.
The iPod is bringing the Windows users into the Apple Stores.
“Neutral” is good at the current price levels of the stock. I don’t think it’s a good time to buy given the current run up so I’d be bearish — remember that the current stock-price discounts (takes into account) the latest news plus insider news of the WWDC, if any. So the outlook of the company may be great, but the price may already take that into account, or have already overshot an estimate of future earnings per share. But the fellow says “neutral.” That means he’s not sure of the downside of the stock in the short term; sort of a hedge in case it doesn’t drop or makes a next surge.
As to the justification (the lack of presence in the low end of the market), I don’t think it means anything. Selling new products to upgraders and switchers is where the silver lining is.
I think to be fair apple doesnt need to sell cheaper conputers, just needs to put more in the expensive computers it sells, so we can justify paying more for them.
The eMac is Apple’s cheap computer, and at $799, with iLife software included, offers way more than the $650 Celeron box. Maybe they should advertise a little more so that people know what they could do for $800.
But Apple really needs a solid iMac in the $1000 to $1500 range. A 17″ LCD, G5, and built-in WiFi at $1299, I think, would do the trick. Of course, Apple needs to advertise that the iMac and Airport Express (plus great speakers) simply creates a neat home music network.
Kev, the emac is better than the imac. The emac has a REAL g4 proccesor and to get the emac to normal standards I’d say it would cost about $1,200 with a super drive, 512 mb of memory, and 160GB hard drive. With a student discount you can get that down to about $1,050. Over all the Emac is a better deal than any wintel machine for this price.
damned lemming wrote:
‘The iPod is bringing the Windows users into the Apple Stores’
Damned Straight!
I’ve hooked a 21 year old potential switcher, and I’m reelin’ him in.
He’s a college student, and works as a companion (babysitter) for my 11 year old boy.
He’s a PC user who, until now, i COULD NOT get to look at a Mac. Which is difficult to do, because I have 14 Macs in my house.
BUT, he loves iPods (buying one soon), and viruses just ate his Pee-Sea, so he’s READY to switch. Macs are looking pretty good to him now, and I attribute the iPod and all the good PR for Apple lately in changing his mind.
I’m working on helping him into a laptop, and if necessary I’ll run interference against his Dad (who is a Pee-Sea user).
I think the ascendance of the iPod, and all the good press that Apple is getting is working. If you ask me.
DV
The only drawback to the top-o-the-line eMac (and the reason I went with the 17″ iMac instead of the eMac) is the screen resolution – there’s a limit that the eMac’s CRT has, and even with the large screen just doesn’t work for what I needed it to – I felt (and have discovered true so far) that I could make better use of the 1440×900 screen on the 17″ iMac with 512 MB RAM and 160GB hard drive – yes, it ended up being close to $2K even with the education discount, but it was for work and I wasn’t paying for it myself. When it’s time, and depending on what’s available with the Mac’s low end, such as it is, I would definitely consider the eMac as a viable option for the second Mac at home (currently have a 14″ dual USB iBook w/640MB RAM).
And if this financial guru has more reasons than to just “be concerned” about Apple’s “low end” offerings, as is implied by others above, then we should know about it, shouldn’t we? Otherwise, I think he’s wrong.
And isn’t he sitting on the negative side of the fence when saying “low end” in the first place? Couldn’t he have used wording like “entry level machines for the budget-minded” instead?