Analysts search hard for signs of trouble with Apple Computer

“To some analysts, Apple is so last year. The computer company was the ‘in’ thing in 2004, thanks to the megahit iPod line of music players. But some analysts are wondering whether Apple may be a one-hit wonder. The iPod’s ability to drive Apple’s stock is already fading, and unless the company finds another chart-topper, it could be yesterday’s news,” Troy Wolverton reports for TheStreet.com.

“‘It’s just a different ballgame this year than last year,’ says Shaw Wu, who covers the company for American Technology Research. Wu doesn’t have a position in Apple’s stock, and AmTech does not do investment banking. Apple continues to post strong iPod sales, of course, and is the leading vendor of digital music devices. But Wu and other analysts see signs of trouble,” Wolverton reports.

Full article here.

MacDailyNews Take: Just because some analysts see signs of trouble doesn’t mean there’s trouble. Some analysts seem as if wouldn’t be able to analyze their way out of a wet paper bag. Read the full article to find out how some are searching hard for any negatives to grab onto, even going so far as to dredge up the G4 Cube and wrongly comparing the iPod to the Mac’s history. It’s funny how wrong some people can be when they misunderstand lessons of the past and don’t clearly realize what’s really happening today.

The Macintosh platform required and still requires huge investments by developers to create compatible software. So, when faced with budgetary contraints, developers chose and still sometimes choose to go with the most popular platforms. The iPod simply plays music that can be encoded, for very little cost, in any format the “developers” (musicians and labels) desire: AAC, MP3, WMA, etc. The music doesn’t need to be rewritten, recorded, and remastered. It’s like writing Photoshop once and then pressing a button to translate it for use on Mac, Windows, Linux, etc. Any analyst who draws an analogy between Mac OS licensing and the iPod/iTunes symbiotic relationship is simply highlighting their ignorance of the vast differences between the two business situations.

44 Comments

  1. I’m not too worried about it. Once someone has a preconception, it’s difficult to shine the light on their own misunderstanding. The light is shining, and people are beginning the let go of their misunderstanding of Apple Computer. It’s just gonna take some longer to realize the truth than others. And the truth is this: Apple kicks the shit out of MS. Now, if AAPL has the ability to gain, say 20% marketshare, how much will that be worth? Hell yeah.

  2. Well, the stock’s down 25% in the last 3 weeks, so obviously Apple’s all washed up and headed for bankruptcy. Oh wait, ALL the stock markets worldwide are down….
    Too bad the analysts and financial gurus can’t see fit to reward a company that is poised to DOUBLE its marketshare this year.

  3. More “analysts” trying to call the top in AAPL’s share price to get the credit. And talking out of their arses, as usual. The article makes some valid points, but completely fails to address the fundemental fact that Macs are selling like hot cakes, are not “pricey” as the article states, and that Apple already has a hot new product: the Mac Mini.

    Watch them crawl back under their rocks come June’s results.

  4. The analysts haven’t yet grasped the fact that every single PC user who also happens to try the iTunes Search function (and there will be many because Apple will most certainly make it abundantly known) will immediately come to the staggering realization that they could have the same stunning capability for their entire computer … every minute nook and cranny of it … if only they had a Mac with OS X 10.4.

    Give it a few months. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  5. Hmm. I beg to differ.

    The fact that after almost 2 years there have been little advancements in the Powermac line and today pro user were treated to an embarassing 200mhz speed bump indicates that there are signs of trouble.

    Blame IBM, blame Motorola, blame anyone. It still means trouble for Apple and Powermac sales. Apple should have at least given price cuts if nothing else. Come on. The “pro” hardware line is 2 years old with no major improvements. That’s trouble if you ask me.

  6. – Wu doesn’t have a position in Apple’s stock, but does he have a position in M…?
    – This kind of “analysis” and “autorized opinions” will be more and more frequent until december 2006
    – Frequent almost like the increase of Apple share in pc’s market
    – This is the price for success
    – I love success

  7. Trouble: “The “pro” hardware line is 2 years old with no major improvements. That’s trouble if you ask me.”

    So, besides a big jump in processor speed, what “major improvements” would you like to see Apple bring?
    bigger HD –>OEMs
    different screens–>OEMs
    more ram–>OEMs
    Blu-Ray–probably on its way

  8. Trouble,

    Apple’s growth won’t come from its pro-line, but the consumer lines. I agree the lack of huge leaps forward in the pro-line is bad, but it doesn’t impact much on Apple’s bottom line. Less and less so, in fact.
    having said that, when they finally do deliver a significant upgrade, you can bet they will shift record numbers of them ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  9. I agree Trouble.

    The iPod has done great, but what about us core Pro users. Apple needs to do something about the slumping sales in it’s Pro lines. A price cut would have helped, I don’t think 200mhz and a $90 dual layer burner is gonna be reason for anyone who bought a Dual Powermac 2 years ago to upgrade.

    Apple can no longer claim the powermac as “The world’s most powerful computer” because, well.. it simply isn’t.

  10. Apple now has two business with two business models. One is the iPod/iTunes business which is a volume market, the other is the computer business which is a quality market*.

    The Street understands volume markets but not quality markets, The Street believes a quality brand should be brought down market to achieve greater volumes. All the fluctuation in price / analysts comments are based on the music market which they ‘understand’, the computer business is treated as more or less a constant.

    *Apple’s comnputer business has become a volume play recently but for the most part The Street hasn’t noticed yet. Years of R&D and great management at Apple contrast with Wintel companies struggling with incompetant design, poor quality manufacturing and appalling quality software. So great is the mess on the Wintel side that Apple now produces better quality hardware, software, support and service at LOWER prices than those companies who benefit from economies of scale.

  11. Fill me in, Anaheim.

    What IS the world’s most powerful computer?

    From the Apple website: The dual 2.7GHz model packs so much power into tight quarters that Apple designed a liquid cooling system for it, resulting in a cool tower that runs Photoshop nearly two times faster than a Pentium 4-based system.

    Are they blowing smoke here? Again, and for the rest of us, what IS the world’s most powerful computer?

  12. What are next months articals going to say. When Apple does have success with Tiger, the Mini, new IMac and PowerMac lines etc.

    Apple does it again. But, is it just luck or are they onto something. We’ll have to wait and see, but this analyist has his doubts. With Longhorn just around the corner, Apple had better have a few more tricks up their sleeve or they’re going out of business.

  13. CaptnKirk,

    First of all there was not a big jump in processor speed. The jump was 200 mhz and is still liquid cooled which means it has an approximate life of 2 years before trouble begins. (No pun intended!)

    For what Apple is offering Price-cuts were definitely in order.

    Secondly the Ram should have been upped to 512 long ago. Even 512 is extremely minimal for a Pro machine.

    And yes, I was expecting Blu-Ray.. This is the year of Hi-Def afterall.

    Dual core processors.

    Still using PCI and PCI X

    I am a Pro user, I want Bleeding edge technology from Apple and I’m not impressed that after two years today’s lineup is all they can offer for their top of the line Macs.

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