Wall Street’s ‘disappointment’ with Apple won’t last

Longtime Apple watchers say Wall Street’s “disappointment” with Apple CEO Steve Jobs’ Macworld Expo won’t last. Jobs on Tuesday introduced iTunes Movie rentals with all major Hollywood studios, a significant free upgrade to Apple TV software, iPhone and iPod touch updates, Time Capsule, the new MacBook Air, and more.

Peter Burrows reports for BusinessWeek, “Ultimately the new lineup will help Apple take fuller advantage of the demand it’s already created among both Mac fans and the swelling ranks of consumers weighing a jump from PCs to the Mac. ‘Even in a year where there were no tsunamis coming out of Macworld, the company showed that it can still make waves,’ says Jupiter Research analyst Michael Gartenberg.”

“More than ever, Apple is offering a complete slate of products that share Apple’s aesthetics and ease of use; there’s even a new Time Machine gizmo that can back up all of your Macs or PCs. ‘One of the digs on Apple at past Macworlds was that they were preaching to the choir,’ says Gartenberg. ‘But they’ve broken out of that mold. They’re creating products that hard-core fans and new customers can love, too,'” Burrows reports.

“Case in point: the svelte MacBook Air… Analysts including Jupiter’s Gartenberg say the new computer will bring people into stores. ‘Even if they don’t buy one, they may leave with a MacBook instead,'” Burrows reports.

“What’s more, the new products will reinforce an already widely held perception that Apple stands for products that are tied together by the iTunes store and its ever-widening selection of entertainment content. ‘They are building an entertainment ecosystem, and that’s going to be a major driver of the stock,” predicts Piper Jaffray’s Munster,'” Burrows reports.

“For that ecosystem to flourish, Apple has needed to extend its influence to the TV, by far the most-used screen in most homes for entertainment. The company went a long way toward that goal with the improved Apple TV and movie rental service unveiled at Macworld… ‘When Steve came to us with this idea, it was a no-brainer,’ says Jim Gianopolus, CEO of News Corp.’s 20th Century Fox. While he admits there are many other ways to get movies, he thinks Apple can cut through the clutter. ‘I think this will be a transformative version of the rental model,'” Burrows reports.

Burrows reports, “Yet, Apple doesn’t have to dominate the digital living room to benefit from Apple TV. The real win is if more customers—existing and potential—decide that Apple can meet the range of their digital entertainment needs. Once people make the shift to Apple’s universe, they’ll be tough to win back.”

Much more in the full article here.

22 Comments

  1. Here’s a thought regarding “30 days after DVD rental” policy: worldwide simultaneous release of titles.

    Jobs did say that the rental store would be launched internationally later in the year, which would make the iTunes Movie Rental service the first and only truly international online service in history, as Netflix, Blockbuster, TiVo, Amazon Unbox and VuDu don’t work outside of US borders. He also hinted that movie rentals would be available in different languages, as witnessed in the demo of the new iPhone and iPod Touch video features. In continental Europe DVD titles usually come out no sooner than a month after their US release dates (in the UK I believe it’s 2 – 3 weeks after the US release date) due in part to language synchonisation, region coding, etc., so the delay, seen in this context, makes sense, if that is indeed what they have planned.

  2. @Artist

    Time capsule on a PC would be like the time capsules you buried in your backyard when you were a kid, which took no thought to waterproofness or anything else.

    Basically a cardboard box full of drawings and baseball cards and old gum and stuff. Pretty much what you get when you time capsule a PC.

  3. Where’s the new MacBook Pros? Where’s the new Cinema Displays? Where’s the matte screen option on iMacs. Sheesh! All Jobs wnats to do is play the big shot in Hollywood. C’mon. Listen to the faithful or your stock willl continue to decline. Get back to the basics that made you. Or do you just prefer hot [MacBook] air?

  4. I’m not sure that language synchronisation, region coding or any of the similar technical issues has any meaningful part in the 3 – 4 week delay of the EU/global DVD release. By the time DVDs are readied for the US market release, dialogue dubbing has long been finished (for the foreign theatrical release), and region coding is a single check box in DVD Studio Pro.

    More likely, the reason is distributing revenue evenly, to avoid periodic drops.

    AppleTV is now officially a great device. News needs to trickle down to the consumers. As soon as they find out that their ‘blockbuster’ (or Holywood, or local video shop) can now be in their living room, on their new HD TV, they’ll search long and hard for excuses. A plausible one: the box will pay for itself through the difference in movie rental price between Blockbuster and iTunes (as high as $6 in some places, vs. $3, no tax on iTunes) – two movies per week and it pays off for itself in a less than a year. After that, you’re saving money!

    The Wall Street’s disappointment should turn to love affair just around Tuesday evening…

  5. Preston: Relax. I’m thinking that Jobs knows better than you. “The Apple Faithful” isn’t what’s controlling the stock price. Sorry, Apple needs to win over the others – if people stuck with Apple through 1997, they ain’t leaving them now when things are getting good!

  6. I would like an all you can eat for one low monthly price movie rental service.

    With only 1000 titles that dog won’t hunt.

    The Movie Studios and The Record Labels are both missing the boat. Why isn’t every decent quality recording or decent quality movie digitized and available to rent and/or buy?

  7. The rental pricing is fucking retarded. Why would I shell out MORE for a labor free, postage free, rental mechanism that puts the burden on me to watch the movie in agiven time frame? The answer is NFW Apple…Now my Netflix DVD I can return at my own damn pace.

    Just my $0.02

    P.S. Sometimes I think you guys are just looking for new excuses to send SJ your money.

  8. “All Jobs wnats to do is play the big shot in Hollywood. C’mon. Listen to the faithful or your stock willl continue to decline.”

    Stop saying ‘faithful’, its not a cult.

    The stock is declining because of overall market weakness, not what Apple is or isn’t doing. The market doesn’t care what uber -rabid Mac fans want. As a percentage of the Mac market, the Mac nuts are becoming a smaller and smaller percentage.

  9. “Jobs did say that the rental store would be launched internationally later in the year, which would make the iTunes Movie Rental service the first and only truly international online service in history”

    This only gives the critical edge to Apple. End of discussion.

  10. @ gzero

    “We are rolling this out in the US starting today and internationally later this year,” Jobs said. “We are dying to get this international as well.” – Steven P. Jobs

    gzero, you couldn’t have gotten that more right. All is said by the boss himself. End of discussion.

  11. Ray,

    I honestly have no idea what you’re talking about. My local BlockBuster charges close to $6 for a movie rental. NetFlix is way too expensive for me; I don’t watch that much TV in order to push more than 2 – 3 rented DVDs through in a month, month after month. I rent a movie when there’s nothing on HBO that I like and when it’s cold outside so I decide to stay indoors.

    iTunes movie rentals are cheaper than any average video store and for majority of NetFlix customers, cheaper than NetFlix (I read somewhere that an average NetFlix subscriber watches 1.7 DVDs per month. “No late fees” is an amazing gimmick to get them to not bother returning those discs right away!).

    Now, on the issue of 24-hr viewing; how many people begin to watch a movie, then stop it in the middle, then continue two days later? Wouldn’t you say that when you decide to watch a rented movie (as opposed to, watch what’s currently on HBO), you set aside 2-3 hours, make your popcorn, pop that disc in and sit back. Movies are about 2 hours long. The 24-hour clock begins when you start watching it. Even if some unforseen calamity forces you to paus the movie mid-way, you can come back to it within the next 24 hours and finish it. Just as with FairPlay for music, this restriction is most reasonable and will be practically invisible for vast majority of people.

    If you look at it rationally, you’ll see that AppleTV and iTunes movie rental are more elegant, more efficient, cheaper and easier solution than BlockBuster OR NetFlix. No driving to the store/post office. No going out/going downstairs to your mailbox. You don’t have to get yourself into the mood for watching Spiderman III just because that was the next one on your NetFlix list and it had just arrived in the mail. It’s by far the best. Simple scenario: you return from work. It’s raining/snowing/cold outside; you’re tired. You’re in the mood for a movie. Your NetFlix is on its way out and won’t arrive until next week; besides, the next one on the list is that stupid frat comedy and you’re not in the mood for that today anyway. BlockBuster is 5 miles (or 5 blocks) away – no way you’re going out in this weather. Where DO you rent your movie? Even if it’s HD, you can purchase your rental now, get yourself some dinner, change and by the time you’re ready to watch, good part of the movie (if not the whole thing) is already downloaded on the AppleTV.

    This device will sell extremely well.

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