“JMP Securities analyst Samuel Wilson wrote in a research note that his checks with 30 retail stores – 20 Apple stores and 10 Best Buys – found most sales people steering customers away from the MacBook Pro and toward the less expensive MacBook. ‘We were repeatedly told that that Pro is designed for the design community, with a high-end video card and large screen, and that we would be better with a MacBook for the cost,’ he writes,” Eric Savitz reports for Barron’s.
“Meanwhile, Wilson also writes that Apple has canceled memory orders recently with Asian suppliers. He thinks it could indicate that sales have not met forecasted demand. Wilson also notes that growth is slowing in the computer business overall, and that ‘with much of the world on the brink of or entering a recession, it is just that much more difficult for Apple to put up high growth rates,'” Savitz reports.
“Finally, Wilson thinks low-cost small form factor netbooks from competitors on the PC side ‘could create a real challenge for high-priced Apple products.’ Concludes Wilson: ‘At this point, valuation is not compelling,'” Savitz reports. “He maintains a Market Perform rating on the stock.”
Full article here.
MacDailyNews Take: Mr. Wilson is either confused or something else. Either way, the conclusions he seems to have drawn are wrong.
“One factor for next quarter’s guidance and [lower] gross margins is a future product transition which I cannot discuss today… We are very confident in our product pipeline… We will be delivering state-of-the-art new products that our competitors will not be able to match going forward.” – Apple CFO Peter Oppenheimer during Apple’s Q308 Conference Call, July 21, 2008
So-called “analysts” really should listen in to conference calls of companies that they’re supposed to be “analyzing.”
Hey MDN… do you read all this crap?
Tired of Retards, you’re one moronic douchebag, aren’t you?
<smack!> JMP Securities analyst Samuel Wilson, you’re genius!
Tired of Retards? Tired of political junkies inflicting their off-topic diatribes on innocent Mac News Junkies.
By the way, ToR, nice job on the name-calling and rehashing today’s Sean Hannity show, must take a lot of intelligent thought to regurgitate radio talk show host opinions. We’re all real impressed. Go back to your News/Talk and call in where your opinion is actually ON topic instead of wasting our time.
As to Mr. Wilson, it certainly doesn’t take a genius to call the “safe” thing and read the tea leaves that a recession might hurt even Apple if people buy less computers, but I have to think that Apple is certainly more recession-proof than the Dell or HP business model.
Let’s face it, a lot of companies and individuals buy the lowest cost Dells because they really don’t have a lot of money they can spend, or want to spend on computers. And if those consumers were already stretching to buy a $500 laptop, and the economy gets worse, guess what? They’ll probably avoid buying the next cheap item. Whereas Apple consumers tend to know the value of what they’re getting, and budget for it. I think Apple is well positioned myself.
Is Apple absolutely and completely recession proof? Of course not.
But they are certainly in better shape than just about any other tech company around. Think about how important it is that Apple has over $20 billion in the bank. Money with which it can invest in continued innovation, continue to build Apple Stores around the world, and possibly purchase companies that add value to the company.
People will always pay for products they view as desirable and valuable. Right now, Apple’s in the driver’s seat when it comes to music players, cell phones, and computers.
Oh, and I’m just as political as the next person, but let’s keep this forum on topic.
@ Tired of Retards,
I’ve said all along that there are enough white supremacists and Rednecks in this country, that Obama’s running mate would end up running for the top spot.
Having said that, 90% of all statistics are made up on the spot.
I’m personally looking forward to President Palin.
journo
No, try the idiots posting the political crap. Is it that hard to spot?
It is easy to identify the historical turning point that marked the beginning of the end.
Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission’s chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie’s position on the relevant accounting issue was not even “on the page” of allowable interpretations.
Then legislative momentum emerged for an attempt to create a “world-class regulator” that would oversee the pair more like banks, imposing strict requirements on their ability to take excessive risks. Politicians who previously had associated themselves proudly with the two accounting miscreants were less eager to be associated with them. The time was ripe.
Greenspan’s Warning
The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn’t be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie “continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,” he said. “We are placing the total financial system of the future at a substantial risk.”
What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.
Different World
If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.
But the bill didn’t become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn’t even get the Senate to vote on the matter.
That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: “It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.”
Mounds of Materials
Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.
But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.
Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.
Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix.
There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.
Oh, and there is one little footnote to the story that’s worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.
Hey, Now Voting for McCain-Palin, you’re just showing how much of a moron you are for selectively choosing your facts.
How about this FACT, as you like to put it:
http://www.nytimes.com/2008/09/22/us/politics/22mccain.html
“Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.”
Ooh, what you gonna say now, big boy? McCain’s own campaign manager was a lobbyist FOR Fannie and Freddie, and AGAINST regulation. And he got paid for over FIVE YEARS to be their lobbyist.
You think McCain and Palin are some kind of “reformers”? I got news for you buddy-boy, they are not. And you’re dumber than you appear in print if you believe any of their propaganda.
“For the money you spend on a Prius you could purchase a Ford Focus or Kia and purchase gas for the next 3-5 years.”
Our attitude should be about conserving our resources, not what is necessarily the most cost effective. The people buyings those cars are paying more in order to actively conserve. That’s like the people buying “hybrid” Suburbans that get 14 mpg instead of 7 thinking to themselves I’m helping! All just to take the two kids to soccer practice…
Ok, to stick to my own request, I will refrain from rebutting any more rubbish from “Now Voting…” or “Proud Democrat” or anyone else who posts political verbiage in this forum.
Readers, please just keep in mind that these people are NOT telling the whole truth. The whole truth is that there is plenty of blame to go around among all the parties.
Don’t fall for the old trick of selectively citing one or two facts while ignoring a mountain of evidence pointing in the opposite direction.
As I wrote before, let’s all get back to Macs and iPhones and why AAPL is dropping.
Click on Apple->Restart
(boot chime)
I drove by an Apple store last week in the middle of the night and noticed there were no lines of people camped out hoping to buy an iPhone or any other Apple product. Therefore, based on my comprehensive analysis of the marketplace, I conclude that Apple is not recesson proof and that the valuation is not compelling at this point.
While my short-term aspiration is to become an analyst, my career dream is to work for the enderle group.
Hi
Im not sure why this turned party political on here, also a lot of people (not everyone obviously) are posting that this report is a load of crap without saying why they think its so – you may have a valid point but unless you explain your view you seem nothing less than a lemming apple fanboy.
MacDailyNews take itself as usual is fanboyish, the conference call does shed light that important new products are on the way and as yet Apple have held up extremely well during the credit crunch, the general consensus is that we haven’t seen the worst of the financial crisis and that petrol prices and unemployment are going to rise further, if this is the case people will hang onto their ipods or macs for that bit longer before upgrading, no matter how compelling an apple product is (and on the whole i love them) they are a luxury product, they are a want rather than a need and this is going to be a period of time whereby the majority are going to have to prioritise.
This said Apple can still ship more Mac units in a shrinking computer market by switching those about to buy pc’s, this is perhaps the crux of the argument, The analyst doesn’t think Apple can continue to convert enough PC users to continue growth and offset the stallers that arent buying until the world financial uncertainty improves, MacDailyNews does, I’m personally on the fence somewhat as it depends how compelling the new products are and the price points. Of course its tempting to lay my bets with Apple but contrary to what MacDailyNews says the conference call provided no information to say that continued growth is guaranteed, in fact its fair to pose the question would Apple be cutting profit margins if it thought it wasn’t going to have problems growing its business in future quarters.
The Ipod business poses the most concern, whereas macs and iphones can grow in shrinking markets by converting buyers from other companies, the ubiquious ipod has no potential customers to steal and the new products aren’t different enough to drive conversion.
Actually, the Tahoe hybrid is rated 20 mpg highway/city. My old Suburban gets 16 mpg whether pulling a load or hauling 6 kids skiing. Can’t haul with a Prius unless you make multiple trips, and that would not be efficient.
Brit
Every year there are more kids having birthdays and therefore a continual pool of iPod buyers.
Nothing and nobody is Depression-proof (think we’ll skip right over the recession into depression). But now ppl are hooked on computers. Gas is too expensive so there will be far more telecommuting. Computers have become a necessity. And Apple makes the best computers and software, so Apple is in a good position, even in a Depression. Apple makes an excellent necessary.
Hi MikeH
Thanks for the reply, I understand what you are saying but if the parent is buying and they have less disposable income, the child has last years nano and this years isnt that different then I feel they are likely to choose either something that is less expensive or more of a need such as clothes chosen by the child.
Also those children had birthdays last year as well you know so by buying them for this years present doesnt constitute growth, unless we are suddenly being awarded a second birthday this year? which is a proposal I would most welcome.
Hi Cascadians
Thanks for the reply, Computers have indeed become an important part of our lives, you argue that they are a necessity i will leave that up for debate, but in these cash strapped times a number of people are going to hold onto their computer for longer, owning a computer for some people may be essential but upgrading certianly isnt, necessities are making sure you have a roof over your head and feeding and clothing your family.
I do agree that Apple are the best placed to ride out the recession, strong balance sheet, growth and great image but things are about to get a lot more challenging.
sick republicans! Your brains are diseased. You are self loathing liars. Anyone who seriously believes that mcain and caribu barbie have acted in a positive way in this campaign are sub human. He has lost any integrity that he may have once had. The guy with 13 cars and 8 homes is gonna help out joe sixpack. What a joke. W is responsible for the greatest transfer of wealth since the invention of money. For u right wing whacks that is just days after dinasaurs. We now owe almost if not more than the entire Worlds GDP. And now we give fatcats more. Yes master can I have another? I think at this point in history I would rather have a guy that finished at the top of his class at Harvard than a guy that fimished 5 from the bottom. Call me an elitest guys and gals, but we need a guy that can count the number of homes he or she has or number of million dollar plus planes he’s wrecked.
An anonymous forum like this is the perfect place to let your true feelings show.
Americans in their ‘free’ society are anything but free to do such crazy things as speak their minds. Online forum anonymity provides an outlet for their pent up opinions.
This ‘Tired of Retards’ person is a classic example. He really thinks he has it all together while everybody else is a fool, so he comes here and vents his spite on anyone who disagrees with what he thinks is right.
to be honest this topic isnt a political issue, this isnt a political forum and the republican/democrat arguments on here aren’t rational discussions, purely bile filled rants, the reason so many people are put off politics is exactly because of this negative behaviour, if you can’t discuss these issues calmly and logically in the appropriate outlet then why should anyone respect your opinion?
. . . Well in that case . . . This just in – Gates does Obama !!!
would that make him obummer?
and gates + obama = spindows
and would gates imprrison mccain in a the blue screen of death camp?
This guy just like Shaw Wu!
Wow. A politically charged year indeed. Remember one thing. The people running these firms saw this coming. They based their multi-million dollar bonuses on unrealized profits and ran with the cash. What we are seeing is basically a redistribution of wealth to the wealthiest people at the expense of pension funds and individual retirement accounts. Sure these bankers have lost money- but if I derive a hundred dollars profit based on BS, and then loose $60- of it, I’ve still made 40- on BS. Small investors took $100- in blood -sweat money, and lost $70 of it and that is more significant. The small investor always seems to loose a bit more than the big guys, doesn’t he?