“In a research note released to clients on Thursday, Merrill Lynch analyst Steve Milunovich said the current weakness in Apple’s stock represents a buying opportunity. The analyst acknowledges that the news flow over the past week has opposed Apple, but said his firm maintains a long-term bullish outlook for the company,” Kasper Jade reports for AppleInsider. “In regards to the pressure from Yahoo, Apple could ‘flick the switch on a subscription model,’ Milunovich believes. He says Apple could debut an iTunes subscription model later this year if it experiences any share loss as a result of Yahoo! Music and similar subscription services. To date, subscription services account for a mere 15% of the digital music download market while iTunes boasts an over 70% share.
Jade reports, “Additionally, Milunovich noted that number of song downloads from Apple’s iTunes are actually accelerating… In the eyes of Merrill Lynch, the Apple story is about more than iPods. ‘Although we think the iPod franchise is safe for at least the next year, the driver of the stock increasingly will be Mac sales,’ Milunovich wrote on behalf of the firm. ‘Management sees more evidence of the halo effect. We model a conservative 15-20% sustainable growth rate for Mac revenue.'”
Full article here.
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