Apple bulls believe Apple CEO Steve Jobs has more iPod magic up his sleeve

“Money managers who own shares of Apple Computer Inc. — and the Wall Street analysts who follow the company — believe firmly that Chief Executive Steve Jobs has more iPod magic up his sleeve,” Rex Crum reports for MarketWatch.

“If Jobs is out of tricks, and Apple’s sales start to slow, many of the growth-fund managers who’ve bought its stock may become sellers,” Crum reports.

“Growth in the media-player market will slow to about 10% annually over the next four years, down from current rate of about 50%, according to Prudential Equity Group analyst Jesse Tortora,” Crum reports. “Apple is also swimming against the law of large numbers. With the company’s revenue reaching nearly $20 billion for the fiscal year ended in September, the company must generate ever-higher sales to maintain a growth rate that satisfies Wall Street.”

“Even Jobs is apparently feeling the pressure for more product-design magic,” Crum reports. “Amid reports of strong iPod holiday sales, and with the annual Macworld conference in San Francisco just a month away, the company took the rare step of showing off one its new products, the iTV, months before it was set to hit the market.”

“Apple intends to release the device, which can beam digital content from a computer to a television via a wireless link, in the first quarter of next year,” Crum reports. “Still, most of the recent buzz surrounding Apple is focused on a product that Jobs, true to form, has yet to confirm even exists: the so-called iPhone.”

Crum reports, “Jobs is expected to make a big bet on the iPhone — or whatever Apple calls it — and is gearing up to produce anywhere between 11 million and 16 million of the devices in 2007.”

“Even as Apple looks to flashy new products for growth, it’s seeing a resurgence of interest one of its earliest, the Macintosh computer,” Crum reports. “Sales of the venerable product line rose even faster than that of the iPod during the quarter ended in September, climbing 37% to $2.21 billion. Taken together, Apple’s laptops and desktop unit sales are growing more than four times faster than the global PC market as a whole and have Apple closing in on third place in the U.S. PC market. While iPod sales contribute nearly 40% of Apple’s revenue, Mac sales still kick in more than half, which means the product’s renewed vigor is goosing Apple’s sales and bottom line.”

Full article here.


  1. Don’t Drink the Koolaid said: “Apple is a sell. Period. I’m shorting as much as I can as I’m sure it will tank after Cultworld, er, I mean MacWorld.”

    Hey, if your so set on offloading your shares as quickly as possible, I’ll buy them for 2¢ a share.

    Thinks: if he’s idiot enough to want to sell shares in Apple now, the fool might accept silly money for them…

  2. Shorting stocks won’t work unless the hedge funds are shorting. They already shorted aapl earlier in the year. Though trading has slowed on the upside, the uptick isn’t over by any measures. If the Stock gets back to say $85, I am back in and will sit through the split. And yes a split should be coming because their revenue is double from a couple years back. So that conclude ” don’t drink the Koolaid” comment, which showed that he/she’s stupidity is only preceeded by the ignorance.

    Now to iTV, As usual alot of you have some parts of the story, but not the needed. iTV preview was intended to show everyone ( industry, consumer, movie studios and the like) that they (Apple) has a very large plan that is going to be dribbled out in small doses. Apple is a growth market by themselves, basically their very own industry, so as long as their margins stay high and they make money their stock will do what it’s done, which is following (or lead) the markets up.

    So in short, quit being short sided about what Apple is doing, and quit making fun of analyst’s for being short sided.

    MDN word “Dead” , What Apple won’t be.

  3. Why do some analysts reduce Apple accomplishments to “magic” and “tricks”? There’s a lot more room for growth in both iPod and Mac. Media player device sales may stall if the device does not change. Right now, having a computer is a requirement for using an iPod or and other digital media player. That’s a big obstacle to adoption, because there are plenty of music loving customers out there who do not want to buy or learn to use a relatively new computer in order to use a music player device.

    Now, along comes a wireless iPod, otherwise known as the rumored “iPhone.” Apple would not create such a device without the ability to buy songs from the iTunes Store directly from the device. That’s an iPod that does not require using a computer; you can use it with a computer, but it’s not required. That would just change the whole market for digital media players. So the iPhone is not about the device being a phone, it’s about the iPod becoming a stand-alone product that does not require a computer. That’s the “big thing” Apple is hiding behind the iPhone rumors. As an expensive phone that plays songs (like the Motorola products), its market is limited. As an iPod with a continuous wireless internet connection (that also happens to be a phone), its market is huge.

    On the Mac side, Apple can go from 5% marketshare to 20% in the next few years. That’s a lot of space to grow. I don’t think Apple is losing its momentum any time soon…

  4. “As an iPod with a continuous wireless internet connection (that also happens to be a phone), its market is huge.”

    Phones with continuous wireless Internet, having been out for a few years, are big hits. Not.

    “As an expensive phone that plays songs (like the Motorola products), “

    Yes, those phones are pretty expensive, $75 with contract for the SLVR after mail in rebate and 25 free iTunes songs, or about the price of the shuffle.

    Of course competitors to Motorola have phones from $9.95 and up, with contract.

    A year from now, the small flash player market will have shifted strongly towards phones. Apple had better get it’s shit together in this area and quickly.

    “On the Mac side, Apple can go from 5% marketshare to 20% in the next few years.”

    For now they are at 2% worldwide. To get more than 5% worldwide will be a big achievement. Over 10% is likely impossible until they start preloading Windows, and even then would be an extraordinary achievement.

    So despite the current rosy news and predictions, Apple’s prospects for growth are overrated. iPod sales growth rates have peaked and are now very modest, Mac growth is showing blip with the Intel introduction and will slow.

    Apple NEEDS the next big thing to even maintain their current position.

    Steve’s biggest problem is that what they’ve got in an iPhone probably isn’t that innovative and the’re trying to figure out what to do to make it not be an iFlop. If the iPhone is an iFlop, Apple is toast in the MP3 player market long term.

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