Analyst: Apple’s price points higher than Windows PC people are used to, not many buy $2K notebooks

“Steve Jobs’s announcement on Tuesday that Apple Computer would begin shipping its first computers containing Intel chips six months earlier than expected won predictable applause from adoring Apple fans,” Kevin Allison writes for The Financial Times. “Among some industry watchers, however, there is a sense of waiting for the other shoe to drop… To justify its rich valuation, analysts say Apple will need to come up with several blockbuster products this year. And although the move to Intel chips will give a badly needed boost to Apple’s core computer line, it is, at heart, a catching-up exercise, not the coup needed to sustain the company’s strong sales growth.”

“Intel processors may put Apple on an equal technical footing with its PC rivals but the company faces other challenges as it seeks sell its computers to a broader audience,” Allison writes. “For one thing, Apple computers tend to be more expensive. Low-end models of its new dual-core MacBook laptop will retail for $1,999. ‘The price points are higher than Windows [PC-based] people are used to,’ says Mr O’Donnell. ‘Not that many people buy $2,000 notebooks.’”

“Although Mr Jobs disappointed those at Macworld hoping for a new consumer device, he did treat the audience to a tantalising glimpse of what the software that sits on such a machine might look like. Midway through his keynote speech, Mr Jobs sat down at a computer and demonstrated Apple’s updated version of iLife, a software suite that allows users to create, sort and display movies, photos and music… ‘The way it fits together so nicely,’ Mr O’Donnell said, ‘they’re putting the fundamentals in place so when it is time, you could transfer everything very cleanly and quickly [to a home media device].’ No doubt investors will be keeping a close eye on Mr Jobs as they await news of Apple’s next big thing.”

Full article here.
Would it kill the IDC analyst to click on over to Apple.com and note that the Apple iBook portable starts at US$999? Obviously, he’s avoiding doing so for some reason. Of course, it’s partly Apple’s fault for not having an Intel-based $999 MacBook ready yesterday. Depending on analysts and writers to read beyond a press release (if they even bother go that far) is asking too much in some cases. Also, isn’t it time that The Financial Times updates the Apple logo they use to illustrate their Apple articles? Apple retired that rainbow logo six years ago; it’s almost as old as much of your publication’s thinking. Almost.

“Rich valuation?” Ha! That’s a good one! Not even 10% market penetration for the Apple iPod in the U.S., yet boys. Apple has hundreds of millions of iPods left to sell over the next decade or so. No Apple “blockbusters” are even necessary, although we’re sure they’ll come anyway. In fact, Apple already has a blockbuster called “the Mac platform” that, for some inexplicable reason, they insist on keeping top secret from the general public. This analyst certainly knows nothing about it (it’s the Mac OS and the Mac-only software, stupid). Even with their woeful Mac promotion, no company currently trading may be as undervalued as Apple is today.

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Related articles:
American Technology Research boosts Apple target price to $101 – January 11, 2006
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Soleil analysts hike Apple price target to $95 – January 11, 2006
Banc of America raises Apple price target to $87 – January 11, 2006
CSFB ups Apple target price to $90 – January 11, 2006
UBS hikes Apple Computer share price target to $100 – January 11, 2006
Cramer’s Mad Money: Apple going to $100, two thumbs up, way up! – January 10, 2006

36 Comments

  1. This is where knowing something about technology and being able to have a little vision into the strategy would make sense.

    People like this are why some people get rich because they see the future beyond what happens 20 minutes from now. He obviously doesn’t.
    Add him to the list of people that will be sitting around 2 years from now lying about how he predicted the surge in Apple computer years ago.

  2. Another writer just spills his guts without doing research. It does not take a genius to figure out apple will introduce an “iBook” intel powered laptop in the $1000 range and this laptop will be great for 90% of laptop users. When they introduce the 12-inch intel powered “iBook” (i quote iBook because i have no idea what this new laptop will be called) I will be first in line to buy one as will many others.

  3. The MacBook Pro starts at $1999. There is currently no MacBook. You have to wait a few months until the iBook line becomes the MacBook.
    We should get this guy’s email address and tell him he’s a hack. The state of journalism and financial analysis is very dissappointing.

    Mr. O’Donell is also horrible analyst. You won’t have to copy over your data to a media PC because the Mac is already all of that. If and when the Mac mini gets converted over to the Intel chips, it’s still a Mac using OS X. There is no software change stupid. Unlike Microsoft, Apple prefers to avoid the confusion and code branching of generating OSes like Windows XP, Windows CE (is this still around?), Windows XP MCE, Windows XP server… not to mention transitioning each version to Windows Vista.

  4. Everyone MUST calm down a bit

    First, Gingerbread, there are two models of the MacBook Pro available – see for yourself.

    Secondly, this journalist isn’t realizing that this the the Pro model of the latop line for Apple. They are making a great many implications which is getting MDN all in a twit.

    Yeah, it’s an expensive latop – it’s for professionals who need that portable power. No, Apple isn’t going to try to get a family paying for a kid in college to shell out $2000 for one. That’s what the iBook/MacBook will be for.

    And MDN – you gotta chill a little bit. You may think that Apple has a great bit of potential all bottled up – as do I – but it’s hardly and under valued stock. The reality is apprent when you look at income. Back out the iPod and Apple’s Mac division is growing but far slower. Add the iPod back in because that’s the reality, and the you see the mac division is getting a momentum push from the iPod halo.

    But not all analysts and investors are stupid non-technophiles. They understand there is only a small fraction of the market that is penetraited, but that cuts both ways, there is still, but your numbers, 90% of the market that could swing away from the iPod.

    If a company that had the content and the hardware know how (Sony) were to make a device and some accessories that combatted the iPod’s dominance, it would not be a sure thing that the iPod would rule the day. The PS3 could put them in a position to make that happen. Is it a long shot? hell yeah! Could Sony pull it off? Well I don’t see any one else who could.

    If you read your own press you are just going to be that much more surprised when reality lands in your lap. Try to balance your Apple enthusiasm with some objectivity!

  5. Who says Macs are more expensive then Dells?!?

    Let’s compare like for like:

    I configured a MacBook Pro and a Dell Inspiron 9400 with similar specs:

    Processor: CoreDuo 1.83GHz
    RAM: 2GB 667 DDR2
    HD: 100GB SATA@7200 rpm
    Bluetooth,
    Wi-Fi
    CD/DVD burner

    I used Mac OSX 10.4.4 and WinXP Pro (with the back up CD) (We won’t even talk about the features included in the Mac OSX such as iLife)
    Went with the UltraSharp display on the Dell.

    Differences:
    Dell comes with a 17″ LCD only. The Mac comes with a 15″ LCD only.
    Dell comes with a 53 or 80 WHr battery. ($99 more for the 80. Went with the 53 WHr for this)
    The MacBook comes with a 60 WHr battery
    MacBook comes with ATI x1600 video card, Dell with an NVIDA GeForce Go 7800 (Both with 256 MB)

    Prices:
    Dell: $3,130
    MacBook: $2,899

    A $231 difference just on the hardware.

    Don’t forget the weight too. The Dell gives you an extra 2.5 lbs to carry around.

  6. Though I understand your anger just try to understand that (unfortunetaly)
    the majority of Windows users out there thinks the same way!
    A 2000 Dollar Notebook (even worse: 2100 € in Europe->2300 dollar) is a wrong thing to start with if you want to win over masses..Ok, the iMac’s thrilling but a 999dollar iBook, that’s probably 5-6 times slower than the pro-line doesn’t convince switchers eihter!
    I’m impresses how easily they ignore windows compatibility!
    That’s just stupid and it might cost them a lot of momentum as there are people (e.g. in architecture) that want and need to use their win-programs. Keep in mind that, though there are many apps for OS X, people eventually won’t pay 1200 bucks for a new mac + buy new office or other expensive apps, made for mac.

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