“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.”
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