Agathon to discuss Apple's stock price

[Arrian]

At what point does it cross over into being undervalued, and thus a good buy?

-Arrian

[Kidlicious]

Asher,

Apple produces high end products. That's why their stock is suffereing more from recession fears.

Man, you need to start threads about different subjects besides business bud.

[Asher]

Originally posted by Kidicious
Asher,

Apple produces high end products. That's why their stock is suffereing more from recession fears.

Man, you need to start threads about different subjects besides business bud.

This has already been discussed in this thread.

Your opinion does not match that of experts in the field, who said Apple is more insulated from recessions than most of their contemporaries.

The people blaming the stock slump entirely on "general market woes" have no idea what they are talking about. There's many factors going into this, which have been discussed. You've not read them, so do that first and reply to them before making an inane, cookie-cutter opinion without understanding the market or the facts about the company

[Asher]

Originally posted by Arrian
At what point does it cross over into being undervalued, and thus a good buy?

-Arrian

I think $100 is fair value right now, but I wouldn't buy it at fair value myself...

[Kidlicious]

Originally posted by Asher

This has already been discussed in this thread.

Your opinion does not match that of experts in the field, who said Apple is more insulated from recessions than most of their contemporaries.

The people blaming the stock slump entirely on "general market woes" have no idea what they are talking about. There's many factors going into this, which have been discussed. You've not read them, so do that first and reply to them before making an inane, cookie-cutter opinion without understanding the market or the facts about the company

I don't know about your experts. Toys like the ipod are going to sell worse in a recession, thus Apples stock is going to suffer. That's basic stuff there.

[Asher]

You don't think it had anything to do with lower than expected European iPhone sales?
Or the fact that the iPod sales have already plateaued?
Or the fact that their new product isn't reviewing so well?
Or the fact that Apple hasn't announced a 3G iPhone yet?

[Agathon]

Originally posted by snoopy369

Apple created the mp3 player market essentially by itself, and continues to lead the mp3 player market by a significant margin. Nobody would argue that the Mac is a significant marketshare, but iPod and iTunes are significant growth markets - still - where Apple is very much the giant leader.

The mac has a significant marketshare in the markets it competes in. People who compare Apple's marketshare with the marketshare of Windows based computers are idiots, plain and simple. Apple doesn't sell operating systems that can be easily installed on any computer. Apple sells computers. Its competitors are Sony, Dell, HP, Lenovo and other such companies. In fact, Apple sells computers only in a few sectors of the market, namely: home, education, "creative professional" and science. Saying that Apple has low marketshare in computers as a whole is like saying that a motorcycle manufacturer has low marketshare in the vehicle market because it doesn't make big rigs.

Apple having massive marketshare in mp3 players is pretty much down to them being the last computer company that designs the whole widget. It's a lot easier to get everything to work properly when you do the whole thing (as Microsoft have lately admitted). Those of us who are old enough can remember when most computer companies were like this. That's basically what gives Apple the advantage in that market. People who suggest otherwise are usually conspiracy theorists.

All this hoo haa is silly. As Drogue has said, makers of luxury items tend to do worse than normal when the overall market outlook is worse. This already happened back in November, and it is happening again now. Whether or not you think that AAPL is a good buy depends solely on how you think the economy as a whole will play out this year. If you are a pessimist like NYE, then stay away.

[Asher]

How can you guys keep ignoring the fact that Apple's simply not doing as well as people expected, including themselves?

Apple has apparently slashed its orders for iPhones, iPods, and MacBooks once again this quarter, according to a research note by FBR Research analyst Craig Berger. The cut is the result of lower sales. "For both iPods and iPhones, we believe Apple was previously targeting a roughly 50 percent quarter-over-quarter decline for first quarter units, whereas, we now think the firm is targeting a 60 percent quarter-over-quarter unit decline for first quarter units," he wrote.

Cue Aggie's "Apple is unstoppable, MS is screwed!" immediately after MS raised their expectations and Apple lowered theirs once again, 2nd time in under a month.

[Asher]

http://arstechnica.com/journals/apple.ars/2008/02/26/golden-aapl-tarnishes-even-as-mac-sales-shine

Was it just December when fanbois were pondering how high above $200 AAPL might go? It was, but since then, AAPL has dropped like a Cube. Steve Jobs even had something to say about it, reassuring employees in a letter, but not everyone has felt better. A few days after one six-figure analyst suggested Apple may not sell 10 million iPhones this year, CNN reports another one has chimed in with similar concerns about flat iPod and iPhone growth.

BMO Capital Markets analyst Keith Bachman on Monday cut his price target on Apple's stock to $140 a share from $160, and said in a research note that " Apple's three growth drivers (iPods, iPhones and Macs) has now turned to one," that being the company's line of Macintosh computers.

Bachman has upped his forecast for Mac sales for the fiscal year ending in Septemer from 8.4 to 9.2 million, as well as the current quarter, 1.87 to 2.06 million. He cites "strength in desktops," which likely means iMac sales. Apple executives have been talking about great iMac sales without revealing numbers in quarterly conference calls since the introduction of the glass-and-aluminum iMac last year. While there is no mention of the MacBook Air, reports are that it has been selling well too, and that coupled with new MacBook Pros and MacBooks, will likely mean good news in the coming months.

Of course, the bad news is the iPhone has not met expectations. Consequently, Bachman has lowered his forecast for the fiscal year from 9.5 million to 7.3 million. Worse, he now projects 8.5 million phones will be sold in 2008—STEVE JOBS' PREDICTION FAILURE ALERT! Bachman believes "the iPhone is too expensive and needs more carriers." He has also lowered his forecast on iPod sales for the fiscal year, from 54.6 to 51.1 million due to "market saturation and weak consumer demand trends."

So, what can we expect? As an idiot fanboi, I am no longer making guesses about stock prices. However, as a Mac user who does not own stock in the company, I'm not-so-secretly pleased that the Mac may once again become the central focus of the company. You may be able to take the Computer out of Apple, but you can't do it without the Mac.

[Asher]

Full CNN article is here:

http://money.cnn.com/news/newsfeeds/articles/djf500/200802252318DOWJONESDJONLINE000718_FORTUNE5.htm

UPDATE: Apple Has Fewer Legs For Growth, Analyst Says
Dow Jones
February 25, 2008: 11:18 PM EST

SAN FRANCISCO (Dow Jones) -- The Mac might just be about to become even more important for Apple Inc.'s future growth plans.

BMO Capital Markets analyst Keith Bachman on Monday cut his price target on Apple's stock to $140 a share from $160, and said in a research note that " Apple's three growth drivers [iPods, iPhones and Macs] has now turned to one," that being the company's line of Macintosh PCs.

Bachman said that Apple's (AAPL) share gains in the PC market are continuing, "with strength in desktops in particular," and raised his Mac sales estimates to 9.4 million units from 8.2 million for Apple's current fiscal year, which ends in September. Bachman also raised his forecast for Mac sales for Apple's current quarter to 2.06 million units from 1.87 million.

The analyst said the Mac's strength will take on more importance because the company is not likely to see the kind of growth from the iPhone that it has projected this year. Also, the iPod is starting to show some signs market saturation, leading to slower growth rates for the iconic digital media player.

The amount of unactivated, or unlocked, iPhones has already caused some analysts that follow Apple to express concerns about the company's future from the combination mobile phone and iPod. And when Apple reported its first-quarter results in January, the 22 million iPods it sold were just 5% more than the prior-year period and short of nearly all industry forecasts.

Bachman maintained his outperform rating on Apple's stock, noting that "more carriers and lower handset [prices]" could improve growth prospects.

But he took down his forecast for iPhone sales for the current fiscal year, which ends in September, to 7.7 million units from 9.3 million. Bachman believes Apple will sell 8.5 million iPhones for its current fiscal quarter.

Apple currently prices the iPhone at $399 and $499, and has an exclusive carrier agreement with AT&T Inc. (T) in the U.S. Bachman said that "the iPhone is too expensive and needs more carriers," but that Apple could fix those issues in the coming months.

Regarding the iPod, Bachman lowered his sales target for Apple's fiscal year to 51.1 million devices from 54.6 million. Bachman said he made the moves because of "market saturation and weak consumer demand trends."

Apple shares fell $2.08, or 1.7%, to $117.31 in afternoon trading.

[-Jrabbit]

AAPL seems to be relatively stable in the low 100s. Which suggests that's about where it belongs. The only thing surprising in the article is the speculation that MacBook Air is selling well. Based on tepid reviews, I assumed it was tanking.

It should be clear to Apple by now that the single-carrier strategy for iPhone is choking off sales. My guess is that both AT&T and Apple are experiencing extreme regret at this point. The geek community's ability to successively crack firmware updates has created a huge grey market, which is a good indicator that there's plenty of demand for the handset's cool factor. (Say what you want about missing features, the people who have these phones seem to love them.) Thus, over 25% of iPhones sold at retail are not "officially" activated, but sent to closed markets (notably China, where they're made) for cracking and grey market resale - at a premium LOL.

[Asher]

In related news, Apple no longer ships the (****ty little) Apple remote with MacBook and MacBook Pros. This <$1 piece of plastic is now a $19.99 option.

[Kuciwalker]

That's ridiculous

[-Jrabbit]

It's a laptop. Whatever would you need a remote for in the first place?

[Asher]

Ask Apple, they're the ones that pimp FrontRow on the things.