“Apple’s long-awaited update of its operating system, dubbed Tiger, is coming out April 29. The company had previously said that it expected to release Tiger during the first half of 2005, but there had been speculation among Mac devotees that Apple would start selling Tiger this month,” Paul R. La Monica reports for CNN/Money. “Why is Tiger so important? For one, even though software sales only accounted for about 6 percent of revenues in the most recent quarter, this segment is more profitable than Apple’s hardware businesses, said Shannon Cross, an analyst with Cross Research-Soleil, an independent research firm. ‘Apple’s software side is underreported on Wall Street, but it’s a big positive in terms of margin contribution,’ Cross said.”
La Monica reports, “More important, however, could be the impact that Tiger will have on sales of Mac computers. Shaw Wu, an analyst with American Technology Research, said that Tiger will spur a wave of upgrades. Wu said that the operating system’s new features, such as a desktop search function called Spotlight and the latest version of the QuickTime media playing software, could attract the interest of both the Mac faithful as well as PC-owning iPod users, a much-discussed phenomenon dubbed the iPod ‘halo effect.'”
“‘Tiger could drive a new hardware cycle and that’s pretty significant,’ Wu said, pointing out that despite the dramatic growth of the iPod, sales of Macs still make up nearly half of Apple’s total revenues. And Macs are more profitable than iPods, the analyst said. So even though consensus earnings estimates for fiscal 2005, ending in September, have surged 45 percent in the past three months, projections could still be too low because analysts aren’t yet factoring in Tiger,” La Monica reports. “‘One of the things that has gotten our interest is the fact that Apple only has a couple percentage points of PC market share. Apple doesn’t need to do a lot to have meaningful gains,’ said Zach Shafran, manager of the Waddell & Reed Advisor Science and Technology fund. ‘The new operating system clearly ought to help them.'”
Full article here.
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