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Monday, February 1, 2010

Apple's iPad vs. the netbooks

By 2011, Apple will have captured 7% of the low-end computer market, says an analyst

[Originally posted Feb. 1, 2010 on]

"We expect the iPad to compete very well against existing low-end notebooks and netbooks, particularly in the segment of the market where surfing, reading, game playing and emailing dominate the usage model."

So says Deutsche Bank's Chris Whitmore in a note released Sunday.

In fact, he writes, with the release of the iPad this spring, Apple (AAPL) will instantly add more than 50 million users to its addressable market.

"With this product announcement," says Whitmore, "Apple now serves every pricing point from the iPod to high-end MacBook Pro."

While not directly comparable, the $499 iPad will be, he believes, "a formidable competitor" to the netbooks and cheap notebooks that are the fastest-growing segment of the computer market.

Below the fold: Whitmore's tale of the tape comparing -- feature by feature -- the iPad with low-end machines made by Hewlett Packard (HPQ), Dell (DELL), Nokia (NOK) and Asus.

Tuesday, January 26, 2010

Apple's earnings: The Street's big miss

The professional analysts were bested -- once again -- by the bloggers

[Originally posted Jan. 29, 2010, on]

There's a good reason most Wall Street analysts don't publicly review their predictions after the fact. It's called self-preservation. Who wants to advertise how badly they misunderstood the companies they follow?

Case in point: Apple (AAPL), and the quarterly report it issued Monday afternoon. Apple management gave ample warning that it wanted to change its accounting procedures under the rules revised last fall -- recognizing iPhone revenue when it comes in, rather than spreading it out over 24 months (see The day Apple released its revenue bomb).

Yet nearly half the professional analysts we polled missed the boat entirely -- never bothering to publish estimates for the so-called non-GAAP (generally accepted accounting principles) numbers that pushed Apple's revenue to a record $15.68 billion in its first fiscal quarter of 2010.

And those who did were all over the lot, getting as many calls wrong as they got right. None of the professionals hit as close to the mark as our three favorite independent analysts: Turley Muller, Andy Zaky and the blogger who calls himself deagol.

Let's look at the numbers:

Tuesday, January 5, 2010

How many Macs did Apple sell? (Q1 2010)

The second in a series of previews of Apple's results for the first fiscal quarter of 2010

[Originally posted Jan. 5, 2010 on]

On Monday we sampled the Street's expectations for Apple's (AAPL) iPhone sales in the fiscal quarter that ended on Dec. 26. (See here).

Today we look at analysts' Q1 2010 estimates for the product that contributes more to the company's bottom line than any other: the Mac.

As with the iPhone, there is a huge range in the unit sales numbers we've collected, from a high of 3.31 million from Broadpoint AmTech's Brian Marshall to a low of 2.79 million from Technology Insights' Nehal Chokshi. (See below the fold.)

Sunday, January 3, 2010

How many iPhones did Apple sell? (Q1 2010)

A preview of what Wall Street expects from Apple's Q1 2010

[Originally posted Jan. 3, 2010 on]

Apple's (AAPL) first fiscal quarter ended on Saturday, Dec. 26, front-loading the company's 2010 results with what is likely to be its biggest quarter of the year.

We won't learn the actual results until they are released later this month, but most analysts who follow the stock have already made educated guesses about how that quarter went, starting with Apple's fastest-growing product line: the iPhone.

We've gathered some of those estimates below, and will add to the list as more come in. They range from a high of 11.3 million iPhones from Broadpoint Amtech's Brian Marshall to a low of 7.6 million from Morgan Keegan's Tavis McCourt.

Even at low end, that would represent a 10.8% increase from the previous record of 7.37 million iPhones, set last September.

Below the fold: The estimates (iPhone unit sales in millions).

Tuesday, December 22, 2009

Can Steve Jobs unplug cable TV?

CBS and Disney may join Apple's $30 per month TV service, says the Wall St. Journal

[Originally posted Dec. 22, 2009 on]

This could be totally disruptive. Or it could be another "hobby" like Apple TV that never quite takes off.

In a front-page story published Tuesday, the Wall Street Journal reported that CBS (CBS) and Disney (DIS) are "considering participating" in Apple's (AAPL) plan to offer television subscriptions over the Internet.

It was the first hint of interest from TV content providers since the news broke last month -- in All Things Digital, another News Corp. (NWS) property -- that Apple was preparing to offer such a service to its 100 million-plus iTunes subscribers.

As initially described, customers would pay Apple $30 a month for streaming access to the best of TV.  Cable companies charge Americans an average of more than $70 a month for huge bundles of programs, most of which their subscribers never watch and didn't ask for.

Apple's service would be more like a streaming music service that offers all the content you want for a flat monthly fee. Without a critical mass of popular TV shows, it will never get off the ground. But if Steve Jobs can broker enough deals in Hollywood, the company may be, as MG Siegler puts it in TechCrunch Monday night, "on the verge of kneecapping the cable industry."

Sunday, December 20, 2009

Hedge funds: Riding the AAPL slingshot

Jason Schwarz's "Seven Reasons the Shorts Love Apple" is an investor's must-read

[Originally posted Dec. 20, 2009 on]

"If you can keep a good stock down," writes Jason Schwarz, "then you are able to load up for the ride back up. It's like a slingshot -- the harder you pull, the more propulsion you generate."

Schwarz, an investment analyst with a knack for self promotion -- through a newsletter, an e-book, and a new hardcover -- has written an easy-to-follow primer on why Apple (AAPL) has become the hedge funds' favorite punching bag. It was published as a gallery last week in TheStreet by Jim Cramer, a guy who knows a thing or two about manipulating Apple's stock price. (See here.)

For investors who wonder why Apple goes down just when common sense suggests it should go up, it's a must-read.

Below fold, the highlights:

Saturday, December 19, 2009

Video: Three bullets and a MacBook

Lily Sussman is back from Egypt with the laptop that got "blown up" at the Israeli border

[Originally posted Dec. 19, 2009, on]

Three weeks ago, an American student working in Cairo was questioned for two hours at the Israeli border before security officials confiscated her Apple (AAPL) MacBook, called in a sapper, and shot it full of holes.
Lily Sussman, 21, told the story on her blog, where it drew more than a thousand comments and a fair amount of coverage in the Mideast press.

Before she flew home for the holidays, she gave The Daily News Egypt the video interview posted below the fold.

UPDATE: By luck or careful aim, Sussman's hard drive emerged unscathed. "I've managed to recover all the data!" she writes. "Yayy...It's a survivor. I have yet to hear back from the man handling my case about when and what I will be compensated."

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Wednesday, December 16, 2009

Morgan Stanley drinks the Apple Kool-Aid

The investment bank has seen the future and it looks a lot like the iPhone

[Originally posted Dec. 16, 2009 on]

Apple's (AAPL) iPhone was the hero of an hour-long conference-call seminar on The Mobile Internet presented Tuesday by Morgan Stanley.

The report was intended to be a follow-up to Mary Meeker's 1995 "The Internet Report," which became known as "the bible" of the dot-com boom.

Graphics like the one at right charting the rapid growth of the iPhone/iPod touch/iTunes ecosystem -- the fastest new-tech ramp up in history, according to Meeker's team of 27 research analysts -- dominated the 92-slide PowerPoint stack.

This particular slide shows that the rate of adoption of the iPhone and iPod touch in their first nine quarters on the market outpaced NTT's DoCoMo two-fold, Netscape five-fold and AOL eight-fold.

Based on past performance, according to Morgan Stanley, Apple is in the "pole position" in the race to dominate mobile Internet computing, which is supposed to be for the 2000s what desktop Internet computing was for the 1990s, personal computing for the 1980s, mini computing for the 1970s, and mainframe computing for the 1960s.

Sunday, December 6, 2009

The Gray Lady visits the App Store

Apple's controversial software emporium gets a sympathetic hearing at the New York Times

[Originally posted Dec. 6, 2009 on]

Apple (AAPL) only opens its doors to reporters when it needs something from them -- like glowing reviews for a glitzy new gadget.

What it needs right now, apparently, is a friendly account of what's going on at the iPhone App Store, a runaway hit galloping so fast that even Apple -- a company that knows a thing or two about control -- is having trouble holding on to the reins.

And a sympathetic ear is what it got from Jenna Wortham, a former Wired freelancer who joined the New York Times two years ago to cover Web start-ups and mobile communications for the paper's Bits blog.

Apple granted Wortham interviews with two senior vice presidents -- Phil Schiller, who supervises the App Store approval process, and Eddie Cue, who runs iTunes -- which she supplemented with material from Morgan Stanley's Katy Huberty, Flurry's Peter Farago, a handful of developers, and Apple's major competitors.

Her 3,000 word piece is the lead story on the front page of the Sunday Business section, and Apple PR should be pleased. Among the highlights:

Friday, December 4, 2009

Ad wars: Droid manly; iPhone girly

Motorola targets young men with its most testosterone-heavy TV commercial yet

[Originally posted Dec. 4, 2009 on]

Someone had fun writing this ad copy:
Droid. Should a phone be pretty? Should it be a tiara-wearing digitally clueless beauty pageant queen? Or should it be fast? Racehorse duct-taped to a Scud missile fast. We say the latter. So we built the phone that does. Does rip through the Web like a circular saw through a ripe banana. Is it a precious porcelain figurine of a phone? In truth? No. It's not a princess. It's a robot. A phone that trades hair-do for can-do.
The new Droid commercial that debuted in prime-time Thursday night (and is pasted below the fold) opened a new front in Motorola (MOT) and Verizon's (VZ) $100 million ad campaign to take market share from Apple's (AAPL) iPhone.

Earlier commercials had appealed to the fragile male ego with icons of masculinity: stealth bombers, heavyweight fighters, rock-crushing machinery.

This one goes after the competition by painting it -- and its users -- as effeminate.