“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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Analyst: Yahoo’s music entry threatens Napster and RealNetworks more than Apple – May 12, 2005
Yahoo’s music play hurts Napster, RealNetworks; may force Apple to offer iTunes subscription service – May 12, 2005
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J.P. Morgan: Yahoo music service ‘does little to break Apple’s tight grip’ on digital music market – May 11, 2005
Yahoo launches Napster To Go, Rhapsody To Go killer (takes aim at Apple’s iTunes Music Store?) – May 11, 2005
RealNetworks drops 21%, Napster plummets 30% on Yahoo music news – May 11, 2005
Apple debuts iTunes Music Store in Denmark, Norway, Sweden, Switzerland; over 400,000,000 songs sold – May 10, 2005
