“It’s open season on Apple these days. The stock is in a tailspin. Worries abound. The iPod market is saturated. The consumer wallet is pinched. It all adds up to an ugly stock chart. But it’s time for a reality check here,” Larry Dignan blogs for ZDNet. “Is all this angst really warranted?”
Dignan reports, “Of all the concerns about Apple, fears about market saturation and the iPod are the most on target. Everyone has an iPod and some folks have three.”
MacDailyNews Take: That last sentence can easily be disproved: Apple has sold approximately 140 million iPods to date. There are currently over 6.7 billion people on earth. Over 300 million are in the U.S. alone. The fact is: 2.1% of the world has an Apple iPod (it’s actually even less that that as many iPod owners have purchased more than one iPod). Let’s say, very conservatively, that 750 million of the 6.7 billion people on earth can afford an iPod and have the infrastructure available to support such a device: that’s still only 18.7% market saturation.
Dignan continues, “Apple’s outlook for the March quarter left a little to be desired, but the company has a history of being conservative. Underpromise and overdeliver is the mantra. Meanwhile, HP delivered a strong quarter that included big gains in notebook PCs. That bodes well for Apple’s refreshed MacBook line-up. Simply put, Mac momentum may be enough to offset any weakness elsewhere.”
“Handicapping whether Apple can hit the 10 million mark for iPhone units is a bit academic. Aside from a few Wall Street analysts, who have fancy spreadsheet models based on 10 million iPhones sold, no one cares if Apple sells 9 million or 10 million units. It’s a successful launch by any metric you use,” Dignan writes. “iPhone worrywarts need to relax a bit.”
“Let’s face it, Macworld 2008 couldn’t have lived up to the iPhone juiced 2007 version. But it would be foolish to fret about the MacBook Air’s demand yet. Apple has a nice cycle going with its MacBooks. Apple dominates Amazon’s best seller list, Best Buy is ramping up its Mac shelfspace and the MacBook Air has been well received,” Dignan writes.
“Add it up and there are reasons to worry about Apple, but let’s not get too overwrought about it. The next two quarters will tell the tale. Stay tuned,” Dignan writes.
Much more in the full article here.
Stay tuned. How perfectly appropriate!
Except for that bit of “everyone has an iPod” goofiness, Dignan is right on target.
Most analysts still haven’t even come close to grasping the iPhone’s impact on Apple. They continually underestimate the future potential of Apple’s Mac business. They fail to grasp that iPod is being transformed into a mobile computing platform. They ignore Apple TV (but they won’t be able to for much longer). They miss so much about Apple, so often, it makes us wonder just what the heck they’re analyzing! Are analysts supposed to simply analyze companies or do they really exist in order to attempt to move stock prices one way or another?
We suspect that – in order to move stock prices in a desired direction – some analysts “play dumb” and provide angst or hope based on half-formed analyses that sound perfectly plausible to those who are relatively unfamiliar with the company in question, but sound like pure idiocy to those who follow the company closely.
“as much as i don’t want to piss on the parade:
– iphone: only sold in 4 countries after 8 month on the market, no new countries, because no other carriers want to go with the revenue-sharing model, sdk delayed”
but slow and steady wins the race, and as the iPhones black market increases some carriers will realize that they want to be the one that takes in that particular market. and as the SDK comes in and apps get added the value only goes up. why try to take the whole market in one year when you can do it right?
“- appl tv: will not take off until there is a decent selection to rent from (360 titles won’t make it apple!)”
yet those who already own them, love them, and as the rentals snowball the movie companies will push to see more and more cash from it, and more movies will be added. patience young one.
“- macbook air: beautiful, an fantastic piece of engeneering, but too expensive for what it can do”
and yet a visit to my local Apple store shows a lot of interest. and most of them roadwarrior switchers. the Air will easily carry its fair share of the notebook lineup, which is still selling far better than industry average.
“- time capsule: wonderful product but probably not a million-seller”
they said that about appleTV too. and as more and more people get notebooks and see how great time machine is, why not upgrade to time capsule? this one will be the slowest to gain traction, yes, but it will.
“- no dividends: in uncertan times investors look for companies who share their earnings with their stockholders.”
and those companies have no cash to spend on R&D;and purchases to get them through uncertain times. and some of them die. thanks but i trust the people running Apple over a bunch of flighty investors……
Talk about catching a falling knife – I’m down two grand in three weeks! This has been friggin painful to watch. And let’s face it – the iPhone was a no brainer for the traders – they got it, it looks cool, tastes great – buy AAPL. The MacBook Air? Eh, not so much. It’s thin but it’s expensive and where the hell’s the optical drive? With companies like Apple, the traders trade on the emotions surrounding the products. The Air wasn’t highly anticipated and when presented to the public most people just scratched themselves. On the floor of the NASDAQ there was a resounding, “Huh.”
It’s gonna take another iPhone-esque product to bring the stock back up. The MB Air and the ?TV ain’t gonna do it. What we shareholders need is either a major advancement for the iPhone or Apple’s gonna have to come up with something really mind blowing.
well done shen. i hope you are right.
p.s. i have an apple tv and therefore the lack of a decent selection makes me sad every night i put on that damn thing. and a lot of people show very much interest in the air but they don’t buy it because they find too expensive for what it does.
http://www.alleyinsider.com/2008/2/apple_could_miss_on_ipod_sales_aapl
Gene Munster just slashed his unit sales estimates for this quarter’s iPod sales based on January data (with the usual caveats.) Looks bad if he’s close to correct.
Apple TV is really the secret weapon. True, not everyone may have an iPod. But everyone who can possibly afford one has a TV.
The platform needs games, though. Apple is really missing out there. The beauty part, I suppose, is Apple could always install them from the Mother Ship.
NO WAY would Marketwatch print this article. They would rather have us all buying Zunes at PicNSave closeout before they will applaud a Mac product.