“This year has been very good for Apple. The stock jumped to a four-year high in November after a Wall Street firm doubled its price target from $52 to $100. Absent any sales update from the company since the last earnings report, this Fool wondered about the substance behind such a bullish price forecast,” Kelvin Taylor writes for The Motley Fool.
“However, that success has yet to cause a surge in sales of Apple computers. In fact the company is selling more music players than its signature Macintosh computers, for which demand has been slowing. According to a report out by Merrill Lynch, PC unit growth will likely peak in 2004, with yearly revenue growth expected to slow from 6% to only 2% over the next two years. Compared to other computer makers, Apple had a 4% decline in unit sales worldwide from the previous quarter while its competitors gained an average 14%,” Taylor writes. “No other home computer vendor in the top 10 posted a decline in year-over-year unit growth worldwide except Apple. The one bright spot was the 74% rise in unit sales of the iBook… So is Apple really worth more? Let’s take a look and see.”
Taylor then looks at selected Apple technicals and concludes, “There is no question Apple has a strong product line with the iPod and is poised for solid growth. Yet Foolish investors need to consider entire product line and not just one or two hot-selling items. The continued exponential growth of the wildly popular music player is questionable in my book. With competing players being introduced at a rapid pace, the iPod’s market share could fall, and with it Apple’s stock price.”
Full article here.