Correct
prediction 
Brian Marshal of Broadpoint AmTech
January 15, 2009
The next six months are going to be basically a trial period for Tim Cook to be CEO. If that period goes well, my expectation is that Steve will pass the baton over to Tim in June and basically Steve will be his senior adviser."
Marshal raised his rating on AAPL to Buy, from Neutral with a $100 price target.
January 13, 2009
Marshall believes that China may see the iPhone nano's initial release before the U.S.:
Obviously, the best-case scenario here would be a China launch, but we have no definitive knowledge of this and are working on identifying the locale of launch and other pertinent details."
Shaw Wu of American Technology Research
September 12, 2008
While we continue to see fairly favorable unit trends in the September quarter with back-to-school, our supply chain checks indicate low visibility in the December and March quarters, which we believe will likely impact build plans.
In addition, our supply chain checks indicate a mix shift towards low-end and mid-range Macs as it appears that more affluent consumers may be feeling the effects of a tighter credit environment. MacBook Air sales and build plans appear more modest after more robust levels.
We are leaving our Mac assumptions intact at 2.8 million for the September quarter, but lowering our average selling price (4% quarterly decline vs. our previous view of 2% decline) and gross margin assumptions (32.5% vs. previous view of 33%).
September 5, 2008
While there is always room for surprise, it seems this event may be somewhat underwhelming versus previous expectations and events. Over the past several days, Apple shares have pulled back as expectations have likely come down.
[We expect] modestly redesigned 4th generation iPod nano and slimmer 2nd generation iPod touch with lower price points and higher storage capacities. Pricing needs to be adjusted downward toward market conditions. We are in a tougher economy. That's what makes most sense.
In addition, we are picking up that MacBook Air could see a minor refresh and potential price cut to increase its value proposition as build plans have slowed from earlier robust levels as customers have opted for MacBook or MacBook Pro instead."
Potential wildcards:
1) an advanced Apple TV with DVR and TV tuner capabilities and/or 2) new touch form factors (iPod-Mac hybrid) with larger screens."
June 5, 2008
As most investors expect, our supply chain contacts suggest new iPhones, including new 3G models and a lower cost 2.5G refresh. We anticipate pricing for 3G hardware similar to current price points and 2.5G versions to see a US$50 to $100 discount. Signs indicate Apple has become more focused on driving volume, raising the possibility of carrier subsidies.
In terms of features, we are picking up on an improved virtual keyboard with haptics giving it a more tactile feel, GPS and improved location services, and thinner and lighter casing that is more durable and inexpensive to produce.
Having just a 3G version to offer doesn't make much technical and economic sense. The components in a 3G phone are more expensive, not to mention consume more battery power and generate more heat.
While we believe it makes logical sense for Apple to introduce new Macs at WWDC, our sources indicate radically refreshed portable Macs most likely won't be ready for volume production until the September quarter. We believe we could end up with a 'special event' in calendar quarter three to announce these new Macs.
Our sources suggest new form factor touchscreen devices (4-inch and 7-inch) are beyond prototype stage. We see a 50% chance these are announced at WWDC. These devices appear to be a hybrid between a Mac and iPod touch. Timing is not clear, but we believe these devices will eventually be brought to market.
With new products widely anticipated, we do not have a good feel for how the stock will trade on new product announcements, which are sometimes 'sell the news' events. We would take advantage of weakness to add to positions."
Wu maintains his Buy rating with a price target of $220 for AAPL.
May 15, 2008
Last week was busy for new carrier agreements. Vodafone, Telecom Italia, America Movil and Roger Wireless now expect to launch iPhone later this year.
We continue to believe unlocked iPhones will play an important role in driving sales, but lower than the 55-60% contribution we estimated for the December quarter. We see it trending towards 25% over the next couple of quarters as more carriers are signed up, particularly in Asia-Pacific."
The price target for AAPL was raised from $210 to $220.
May 5, 2008
Shaw Wu raised his rating on AAPL to Buy from Neutral with a new price target of $210.
We overestimated the potential negative reaction on the quarter, concerned with high expectations, a typically conservative outlook and the extreme sell-off following December results. In hindsight, we should have maintained our BUY rating and moderated our position rather than downgrading. While AAPL shares will likely remain volatile and we may see a better entry point from here, we need to align our rating with our longer term view on fundamentals of the company.
Our contacts also suggest a radical redesign of MacBook and MacBook Pro, with styling closer to the new iMac and MacBook Air. While MacBook and MacBook Pro have done well, there has not been a form factor refresh since 2001-2002.
In addition to a 3G iPhone, our contacts indicate that the 2.5G model could see a minor casing change and lower price point closer to $299-349 vs. its $399 price today. We believe Steve Jobs will likely unveil new models at his WWDC keynote in early June.
We estimate Mac had about 3% share of the worldwide computer market in 2007, up from about 2.5% in 2006. We estimate that every incremental 50bps of incremental share gain (around 1.5m units) would be $0.45-0.50 per share in earnings.
The spread of Wi-Fi, 3G cellular and future generations of wireless technologies will have a profound impact on media consumption and distribution. With a multi-platform approach, AAPL is positioned to benefit more than any other supplier.
Considering our bullishness on the macro trends and assuming great management execution continues, Apple has earnings power significantly beyond consensus estimates. We think calendar year 2009 earnings is more likely closer to $7.50-8.00 than the $6.59 consensus estimate."
AAPL stock price
has risen from $160.20 on April 22 to $184.73 on May 5, an increase of 15.3% since
Wu's downgrade.
April 22, 2008
We are downgrading our rating on Apple shares to Neutral from Buy for four key reasons:
1) The risk/reward is not compelling. The stock is no longer expensive trading at 32x calendar 2008 EPS and 28x 2009,
2) We are concerned that expectations may be too high with the stock rebounding over 45% in recent weeks. While we believe Apple will report a strong quarter relative to guidance and published consensus estimates, we are concerned whether it will be good enough and whether investors will be as forgiving with conservative guidance.
3) We are concerned there could be a [product] vacuum. Our supply chain checks indicate 3G iPhones will not likely ship in volume until July and new Macs until the September quarter, likely putting stress on the June quarter.
4) While we maintain our longer-term fundamental positive view on AAPL, from a stock perspective, we find it difficult to recommend purchasing at current levels. The reality is that AAPL shares are very volatile and trading action suggests investor focus on near-term results. Arguably, shares should not have hit as low as $115 and as high as $168 in such a short period of 7 weeks, but it has.
This was a very tough decision as we have been bullish on Apple for the past several years, watching the stock more than triple.
Recall that in only the past year, Apple stock has been below $100, more than doubled to above $200 and fell more than 40% in less than two months to $115, only to move more than $50 to $168 in about seven weeks. We find this trading action amazing and indicative of the trading environment despite Apple shares being arguably universally loved.
As investors are clearly more focused on near-term results from Apple, we believe the stock has a good chance of underperforming from these levels for the next few months until investors again begin to focus on the future, and a robust second half pipeline of products. At lower levels, we would be very inclined to build positions in Apple; however, we are in a market in which valuation matters, and we believe the stock at current levels is ahead of itself."
April 2, 2008
Our checks with supply chain sources indicate that the iPhone is likely to undergo a product transition in the June-July timeframe, about a quarter earlier than expected. We had previously thought a 3G version would be available in mid to second half of 2008. Besides a software upgrade to version 2.0 in late June, we now believe we will likely see new hardware as well.
We believe Steve Jobs could unveil these new iPhones at his WWDC keynote in early June. In addition to a 3G version, our sources indicate that the 2.5G model could see a minor casing change and lower price point closer to $299-349 versus its $399 price today.
What gives us higher conviction in the accelerated timetable is that iPhone inventory levels appear fairly lean, which is consistent with Apple's tendency to wind down inventory ahead of an update."
March 14, 2008
We estimate AppleTV to be a very minor contributor today at around 0.3% to 0.4% of revenue or $100 to $125 million annually. We believe adding the ability to watch and record live TV could turn this into a billion dollar, if not multi-billion dollar business.
We (as well as many others) have been clamoring for DVR and/or TV tuner capabilities since the introduction of Apple TV 1.0 in January 2007 and even Apple TV 2.0 with movie rentals in January 2008. We are pleased to see Apple listening to customers similar to what it has done with iPhone, with adding native access to Exchange server.
Thus while near-term trends look difficult with a looming recession and a slow-down in consumer spending, we continue to believe Apple is well-positioned to weather the storm better than most with its strong fundamentals."
March 7, 2008
We believe Apple's implementation of ActiveSynce is superior to existing ActiveSync implementations out there. We continue to believe it is difficult to replicate Blackberry's robust push e-mail, as iPhone is being touted as having a simpler [push email] architecture. It makes the iPhone now a viable alternative to the BlackBerry. While this is important, Apple has a long road ahead in making inroads in enterprise [markets]."
February 28, 2008
Regarding iPhone compatibility with Microsoft Exchange server and Lotus Notes, to be announced on March 6:
If true (which we believe is), this will prove key in having more enterprises and SMB adopt iPhone as their mobile platform. What isn't as clear to us is how Apple will accomplish this, whether this is from internal development (most likely), third-parties including Microsoft (next likely) with its ActiveSync technology, or Research in Motion Blackberry Connect (possible but less likely), or a combination of two or more.
We do not think it will be easy to replicate the robustness of Blackberry push e-mail, but nonetheless, we view improvements as positive. Other enhancements we are picking up including improved security, better support of VPNs, and enterprise applications such as CRM."
January 16, 2008
On the surface, the announcements look underwhelming and somewhat expected; however, we think when looking back several years from now that the iTunes Movie Rentals announcement will likely end up being a landmark event and potential game-changer. We think movies will ultimately help in driving more users to the Apple platform (iTunes, iPod, iPhone, Mac, Apple TV). In fact, this announcement reminds us of the launch of the iTunes Music Store back in late April 2003 which helped ignite a multi-year 'digital music cycle'. We believe we may be at the beginning of a 'digital video cycle' where there is a fundamental paradigm shift to online video from physical DVDs. In our view, Apple is well-positioned to become a key destination for movies much like it is for music, music videos, and TV shows.
While we are impressed with the new MacBook Air and its industrial design, it is not as clear if it will drive incremental buying as has Asus' Eee sub-notebook. To us, there may be too much overlap with its existing MacBook and MacBook Pro. But then again, Apple has proven fairly adept with product placement, most recently with iPhone and iPod touch where there has been minimal cannibalization despite overlapping functionality.
We see [AAPL stock] upside to $210 in 6-12 months.
January 3, 2008
Re Macs with Blu-ray support:
Our sources indicate that Apple will outline its high-definition video strategy with the support of Blu-ray as opposed to HD-DVD. We believe this is a key announcement as current Macs ship with the DVD format and Sony gains a strong ally in Blu-ray.
[There is] a smaller chance Apple may use a combo Blu-ray/HD-DVD drive to ensure full compatibility and not get involved in the format wars."
Re an Apple sub-notebook:
We believe Apple will re-enter the sub-notebook market, but this time use NAND flash as primary storage to improve battery life, reliability, and reduce weight. Our sources indicate that the possible names of this new product include 'MacBook mini' or 'MacBook slim'."
Re iTunes rentals:
Whether these movies expire based on time and/or usage is unclear to us, but we do believe that rentals are a significant change in its philosophy with its current iTunes download business model. The positive implication from this is that Apple enhances its video experience and makes it more compelling to move and/or stick with the iTunes + iPod + Mac + iPhone + Apple TV ecosystem."
Re the AppleTV's lack of direct internet connectivity and TV tuner:
"Our sources indicate that Apple is working on fixing these weaknesses to make Apple TV a much stronger product. We are unsure of the timing of these enhancements but believe we will likely see these later in 2008 or perhaps 2009."
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