“The iPod family of digital music players has become seminal icons of consumer electronics, a status that Wall Street analysts believe has finally given Apple the means to preach beyond its small but fanatic customer base of Macintosh computer loyalists,” Benny Evangelista reports for The San Francisco Chronicle. “‘What’s interesting here is that the phenomenon of the iPod has really brought a lot of people into the Apple world,’ said Darcy Travlos, a senior vice president and mobile multimedia technology analyst for Caris & Co. of New York. ‘With people having experience using Apple (iTunes) software and going out into the retail stores and seeing the iMacs and PowerBooks, more people are becoming aware of the capabilities of Apple products. The iPod was really the item that got people to notice Apple again.'”
“When adjusted for stock splits and dividends over the 20 years the company has been publicly traded, Apple’s stock hit an all-time high of $72.10 in March 2000, just before the Internet bubble burst. With Apple approaching that all-time high, how much higher can it go? The run-up in the past two weeks was triggered by a bullish report by Piper Jaffray analyst Gene Munster, who projected Apple’s stock would hit $100 per share sometime in the next 12 months… ‘There’s something different going on here,’ said Munster, who does not own any Apple shares. ‘What’s going on at Apple is based on reality,'” Evangelista reports.
“Apple hasn’t quantified the halo effect the iPod and the iTunes Music Store have on computer sales. However, Peter Oppenheimer, Apple’s chief financial officer, has said between 40 and 50 percent of Macintosh computers sold in the stores are to first-time PC buyers or customers who are switching from Windows-based computers,” Evangelista reports. “A Piper Jaffray survey of 200 iPod users found that 7 percent were PC users who planned to buy a Mac within 12 months, while an additional 6 percent had already made the switch. Another 7 percent said they owned a Mac but planned to buy another.”
“Analysts who have been following the company say the halo effect should show up in Apple’s earnings for the current first quarter and into 2005…,” Evangelista reports. “Apple executives and the company’s ardent core of users have been able to preach only to the choir about how suitable Macintosh computers are as a digital entertainment hub, but the iPod is bringing in new customers who may not have even considered buying a Mac before, said Travlos of Caris & Co…. Apple has been hampered in the past by competitors that have sold computers that cost far less. Travlos said she believes the strong iPod sales are an indication that the consumer pendulum is swinging from cheap tech products to more high-quality technology… Nobody’s expecting Apple to suddenly displace giants like Dell at the top of the computer sales charts, but ‘if they can get up to 3 percent (market share), that would be huge,’ Travlos said.”
Full article here.
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