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.

13 Comments

  1. “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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