“Apple on Wednesday again showed its unparalleled ability to think and execute the unconventional, says American Technology Analyst Shaw Wu, who in a note to clients argued that earnings per share (EPS) may no longer be the best way to value the consumer electronics maker,” Prince McLean reports for AppleInsider.
McLean reports, “Wu, who maintains a $145 price target on shares of the Cupertino-based company, says there were “three notable surprises” in the firm’s March quarter report. Specifically, its ability to capitalize in a favorable component pricing environment, its strong Mac shipments despite evidence of a pause ahead of Leopard, and its grander plans with iPhone and Apple TV.”
“While the new accounting allows Apple to state only 1/8 of a [iPhone and Apple TV] hardware sale each quarter, over the longer-term, Wu believes it will improve the company’s linearity and his ability to predict future revenue streams. It may also be a sign of future initiatives on the subscription front,” McLean reports. “‘We believe Apple is in the midst of building a more serious effort in the subscription business where it could enter the ‘rental’ space with video games and music, TV, and movie content,’ he told clients. ‘We would not be surprised to see Apple compete with the likes of Netflix and Blockbuster in a bigger way.'”
Full article here.