“After Monday’s 2-for-1 stock split for Apple Computer, it may be time to book profits and move on to another computer maker. The question is, which one? Dell? IBM? Hewlett-Packard? H-P may not qualify as a candidate for a long-term tech portfolio according to my screening methods, but it’s the best choice of the four right now,” Richard Suttmeier writes for TheStreet.com. “The key for Apple is the sustainability of the momentum in music downloads, and I think there are compelling reasons for skepticism here.”
MacDailyNews Take: “The key for Apple is the sustainability of the momentum in music downloads?” Is this guy kidding or just totally out to lunch? Apple makes little money on iTunes Music Store song sales and only “slightly” breaks even, according to Apple Chief Financial Officer Peter Oppenheimer’s comments during the last conference call. Hardly a “key.” Last quarter, Apple earned US$177 million on “iTunes Music Store sales and iPod related services and accessories” out of $3.49 billion in revenue of which $1.211 was “iPod” revenue, while $2.102 billion was generated by Macintosh CPU sales, peripherals and software. The iPod family and, more so, the Mac are clearly the keys to Apple’s future success.
Suttmeier continues, “Can Apple maintain its cult status on the strength of iPod sales? Perhaps for a while, but I’d suggest booking profits as Apple’s weekly price chart has gone parabolic with a price pattern similar to five years ago. Sure, Lehman Brothers raised its 2005 earnings estimates for the company from $73 to $94 per share on Monday, but the brokerage maintained its equal-weight rating on the stock. If the good news is built in, why not recommend booking profits?”
“I think Apple and music downloading in general has the risk of losing market share in favor of the portable satellite radio offerings, such as those from XM Satellite Radio. Product cost is lower, the monthly fees are lower and there’s a wide venue of music selections with limited user interface,” Suttmeier writes.
Full article here.
MacDailyNews Take: Give us a call when “portable XM Satellite Radio offerings” sell 4.58 million units in 90 days, as Apple did with iPods in the last quarter, Richard, you nut. Mac units sales grew 26% last quarter, before the introduction of the Mac mini, while the computer industry as a whole grew about 13 percent, meaning Apple gained significant share during the quarter. Each 1 percent of market-share gain in the personal computer market is worth about $1 billion in revenue according to Ron Johnson, Apple’s senior vice president of retail. Those who subscribe to the theory that “without the iPod, Apple would be irrelevant” are missing the real story of the Mac’s resurgence. Those that think “the key for Apple is the sustainability of the momentum in music downloads” are completely out of touch with reality. After reading Suttmeier’s article, we wouldn’t use his “screening methods” on our back porch, let alone evaluating Apple stock.
MDN is sooo gonna be watching this guy… just to nail him when he’s wrong!
“After reading Suttmeier’s article, we wouldn’t use his “screening methods” on our back porch, let alone evaluating Apple stock.”
Ouch!
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another example of the abject failure of the u.s. educational system.
What a turd. I can’t believe this guy has a job as an analyst. This guy couldn’t ANALize his own rectum if his head were dangling off one of his ass hairs.
Another classic “MacDailyNews Take!”
Just goes to show you that any schmuck can get a job as an anal-yst. Knowing what in the hell you’re talking about is obviously an optional requirement for the job…
AAPL stock seems to be taking a rest right now after product announcements and a great quarterly report in January and a stock split in February. Nothing new expected in March and April will have another quarterly report, which will probably exceed expectations. Unless Tiger’s release date is announced in March I doubt if there will be much in March to push the stock up. From April on there is Tiger, possible updates to the eMac and iBook for the education market and maybe even Asteroid.
I’m holding my shares as I think that there will be a lot of good news between now and WWDC.
I’m the guy who ratted out this idiot to MDN. He doesn’t have a clue, and as I said in my email to MDN, he has his head where the moon don’t shine. It’s clueless drones like this that do amateur investors real damage. His statement that “Sure, Lehman Brothers raised its 2005 earnings estimates for the company from $73 to $94 per share on Monday…” doesn’t even make sense. Further he absolutely lies about the “parabolic” price curve for AAPL over the last 5 years. Any newbie can simply pull up the curve for AAPL for the last 5 years and see that he’s lying. Please watch this guy. He’s dangerous.
This guys an idiot
“Research” how appropriate
While there are technically no major Apple events before the release of Tiger, I think that Apple stock will seek boosts via some upcoming market share reports.
If Apple smashes the flash market with the Shuffle as the original iPod did with the drive, that news could be a big boost for the stock. Also, Apple’s Mac mini penetration, as well as iTunes continued domination, could really drive up stock.
“The key for Apple is the sustainability of the momentum in music downloads”
Maybe someone should notify this twit that Apple has sold 85 Million songs via the iTunes Music Store in the first TWO months of 2005! I’d certainly call that “sustainability of the momentum in music downloads.” What a freaking tool this Suttmeier is…talk about not doing your research…
The problem with “analysts” is that they don’t actually look at the products the company has to offer – they only look at numbers, and they miss the point of the companies existence, thereby missing the fact that Apple has been building momentum for the past 6 years or so, and what we are going to see in the next 2 years will be the fruits of those labors while companies like Microsoft and Dell have been asleep at the wheel. This guy is simply missing the point.
Frankly, I don’t think the guy is all that far off (not necessarily for the reasons mentioned). The good news may be built in.
Let’s face it, Apple has historically been unable to keep up with demand. We haven’t had much visibility to see if that is so. I hope Apple has gotten past its supply woes.
And even with the large number of product updates, PowerBooks were merely incremental, PowerMacs are overdue, Cinema Displays are overdue, eMac is overdue, and the iMac should see some bump soon. And we have Tiger – which better nail quality down real well.
If Apple delivers on speculated HD movie downloads with Tiger, demand my sky-rocket. Great! But only if there is a supply of computers to meet the demand.
I’ve seen tech companies (take Juniper Networks, for example) which have had continued sustained growth (better than Apple) yet have seen their stock price slide a bit. It’s a fickle market.
Just my take on it.
“Let’s face it, Apple has historically been unable to keep up with demand. We haven’t had much visibility to see if that is so. I hope Apple has gotten past its supply woes.”
If you can’t keep up with demand AND you miss your sales projections that’s bad. If you can’t keep up with demand BECAUSE you’re exceeding everyone’s sales projections that’s NOT bad. In AAPL’s case it has been the latter.
Noooo … look … a tumble in the stock is good for Apple. MDN readers are among the best informed and won’t get hurt much in the process. It’s a good time to take some profits or hold tight for the ride, and dispose of those itching to sell into the money. We know that this is the decade of Apple; that more good news is coming: Cell, iHome, switchers, Longbone (heheh), so a correction is a good opportunity to load up on stock cheaply. A clearance of weaker investors will make any future runups all the more interesting. So … YES … the easy ride is over … move on! And give Stuttermajor a chance to get in on the ride he’s missed.
Sigh…the stock boys looks at Apple as a music box maker and tunes seller…no longer as a computer company…
Zeke pontificates: “If you can’t keep up with demand BECAUSE you’re exceeding everyone’s sales projections that’s NOT bad.”
Ohhhh…so that´s how business works. You base production and demand on what “everyone’s sales projections” are.
Boss: “What are your sales projections?”
Zeke: “I waiting for `everyone´ to give them to me.”
Boss: “I hope we can´t keep up with demand BECAUSE we´re exceeding everyone’s sales projections”
Zeke: “I hope we can´t keep up with demand, too, sir. Meeting our demand is not important, exceeding everyone´s sales projections is important.”
Boss: “You´re going to go far, Zeke. Where did you last work?”
Zeke: “Enron, sir.”
And it’s because of idiots like this that causes stupid fluctuations in the market because even more stupid idiots sit up and believe him.
I bet this guy barely graduated college and probably doesn’t know the difference between a mean and a median. I bet he would give you the empty brain look if you were to ask him how to calculate regression or standard deviation.
Basically, he’s saying dump AAPL and buy these other stocks so that I can make some money too. His preferred stocks have seen little, negative, or no return in the past few years, and he’s been peddling stories about their imminent comeback with similar stories about Apple’s demise. It truly amazes me that these people are considered professional market watchers. Yeah, they watched as AAPL gave everyone else tremendous returns while they hung on to their precious non-performers like DELL and HP.
Sorry kids, I love Apple, but I can recognize by the dollars and numbers that Apple stock is overpriced now and will soon have a corretion. Sell while it’s artificially high like this, it’s going down soon.
Or perhaps AAPL is only halfway, or a third of the way, or a tenth, or more of the way to its eventual high?
MDN Magic Word = “put”
Sometimes the MDN Magic Word scares me!
From the article:
“it may be time to book profits and move on to another computer maker. The question is, which one?”
If you really need to ask, Gateway. Anybody else who knows anything about the industry can make their own decisions.
I think Apple is in for a stream of more good news. All the pieces are in place. All it will take is more news about them actually getting more switchers due to the iPod and the stock will take a big jump. If they come up with something new and insanely great again like maybe an online movie store or something to do with video (it is the year of HD remember) then the stock will go thru the roof again.
Just my take. I am holding on to my AAPL shares.
Satellite radio? It certainly has its place, but to suggest that people are going stop downloading music, is like suggesting that radio should have killed sales of vinyl and CD’s. Most people want to own their music, and its more accurate to say that satellite radio will most likely kill subscription download services.
Besides which this purported analyst has discounted Apple’s colossal potential in the living room. What, the Mac mini didn’t clue him in?