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That $499 iPad only costs Apple $270; Wall Street analyst is elated
Apple is well-known in the consumer electronics world for relatively large margins on products. According to a bill of materials (BOM) breakdown on the iPad recently performed by BroadPoint AmTech analyst Brian Marshall, the iPad should be able to add a sizable chunk of money to Apple's bottom line. For the 16GB Wi-Fi iPad (US$499), Marshall found that the total BOM cost was $270.50. Manufacturing adds $10 to the cost, and warranty service costs add up to $20. In case you're wondering, the flash memory and the aluminum case both cost about $25, and the Apple A4 processor adds just $15 to the total cost of the iPad. While the entry-level iPad may appear to be a cash cow for Apple, the 32GB and 64GB Wi-Fi models add even more margin to the mix. The 32GB model costs only $25.50 more than the 16GB, but the suggested retail price is $100 more. Apple will really make money on the 64GB model, which costs $76.50 more than the 16GB device but sells for $200 more. Marshall had a chance to use an iPad, which led him to believe that "...this will be another grand slam product for Apple. The ergonomics and the 'media' experience of the device stood out the most to us." His original estimate was for Apple to sell about 2.2 million units in 2010. He's now expecting sales to be much higher. As an example, he feels that if Apple sells seven million units, calendar year earnings per share for Apple would rise from $12 to over $13. Marshall is definitely bullish on Apple, having rated AAPL a "buy" with a target price of $264 per share. Considering the trashing that Apple and most other tech stocks have taken recently, the company has long way to go -- and a lot of iPads to sell - before reaching that target price. [via Hardware Central]
Analysts project iPad sales
Some people hate it, some people love it and some people attempt to predict its future.* Members of the last group include Shaw Wu of Kaufman Brothers and Needham's Charlie Wolf, both of whom are cautions about the iPad's performance. Wu brandishes the obvious like broadsword, noting that the Wi-Fi iPad will probably sell better than those with a data plan because it will cost less and that 3G users can expect slower speeds that those with Wi-Fi. He feels that Apple's prediction of 10 million units sold in 2010 won't be realized. Instead, Wu surmises, they'll sell about 5 million. Kaufman holds that the iPad is "...not a revolutionary product" that won't take off without certain 3rd-party solutions, like books and customized iPad apps. His sales prediction is even more conservative than Wu's at 4 million units sold. They both like the entry price however, and we agree with them there. When the pundits were saying $1,000 before the announcement, we knew that wouldn't jibe with Steve's ambition to get one in as many homes as possible. Wu notes that the displays alone may be costing Apple $100 each, yet they've been very aggressive with the pricing. Here's my prediction: Apple will sell a mountain of these things and by this time next year, the nay-sayers will be downloading Humble Pie 1.0. *But none have USED it, so let's keep that in mind.
iPad: Investors shouldn't think short-term
No doubt about it, Apple stock has been on a wild ride since yesterday's iPad announcement. Investors were hoping Apple would deliver big, and while many Wall Street analysts believe they hit a home run – thanks in large part to not just the technology, but the price point of the device – the stock took a large dip today. On news of the iPad, AAPL closed at $207.88 yesterday. Today the stock lost over 4% to close at 199.29. Why? Well, most of the time there's a huge sell off after Apple announces something new. A majority of the sell off is because people generally price the stock according to the rumor. It's the old "buy on the rumor, sell on the news" mentality. I've already stated in the past that I believe AAPL is headed past $300, and their latest earnings certainly seem to be pointing in that direction. But how does the iPad fit into all of this? Frank Cioffi Founder and editor of Apple Investor News has written an interesting editorial for The Huffington Post about what the iPad should mean to investors. Cioffi (who's long on AAPL) admits that while he's a huge Mac fan, he probably won't be buying the iPad because he's not sure how it would give him anything he doesn't currently have in his iPods, iPhone, or Mac laptops. He goes on to recognize that if one veteran Apple fan doesn't see the iPad as providing something his other Apple devices don't, it can't bode well for the short-term outlook for the iPad, which many investors are expecting to be an iPhone-like megahit. But then he brings up a critical point: the iPad is a slow-growth device. Apple has just reinvented portable entertainment and mobile computing. No, it's not "magical," as Apple claims, but it is an elegant form factor that will engage niche industries to create apps for their businesses. It will likely become a hit with educators... just as Apple started the decade with the iPod, which grew slowly into an iconic device, I predict the iPad, after initially underwhelming investors, will also grow over time and indeed create a new device category. But it will take time... Apple is planning for the long haul. This company has moved beyond an e-reader and created an e-entertainment device. Cioffi also points out one thing investors should be even more ecstatic about than the Apple tablet – Steve Jobs' weight. He's looking like he gained some (not a lot, but some) and IMHO is looking much better than last we saw him. But what say you? Are we going to be seeing dissapointing iPad Q3 numbers? Will the iPad eventually become the next "must have" tech gear like the iPod and iPhone? Tell us in the comments! Disclaimer: This author owns shares in AAPL. Opinions in this post are those of the author only and should not be considered as investment advice.
Gene Munster: 2010 is the "Year of the Mac," sales up significantly
When Gene Munster talks, people listen. The Piper Jaffray analyst delivered one of his missives this morning stating that his analysis of Mac retail sales in the U.S., based on numbers tracked by NPD Group, are up about 26% year-over-year for the December quarter. This is higher than the average Wall Street estimate of 19% year-over-year growth. What does that mean in terms of units sold? Munster, who is not pictured at right, believes that translates to about 3.1 million Macs sold in the U.S. last quarter. Munster's last estimate was for Apple to sell around 2.9 million Macs, so even his own estimates are turning out to be somewhat conservative. Munster believes that Street estimates for 2010 will need to come up. The Street shows about 14% year-over-year growth in Mac sales this year, which is well below the 20% or so growth that Apple is demonstrating. In his note, Munster wrote that "2010 is shaping up to be the year of the Mac." Munster concluded his note with a statement that he's confident in his estimate of 9.3 million iPhone shipments last quarter. We'll all find out for sure on Monday, when Apple reports the actual December quarter results. We'll liveblog the financial fun right here on TUAW, so stay tuned next week. [via Business Insider]
Apple shares jump on news of Jan. 27 event
The news that Apple is going to announce something on January 27th has the stock market in a tizzy. At one point this morning, Apple shares were up to $214.16, up $8.23 or about 4.0%. Apple set a 52-week high with a share price of $215.59 on January 5, 2010, up 275.6% over the 52-week low set on January 20, 2009. The Dow Jones Industrial Average, by comparison, was up only .95% shortly after 1 PM ET today, and the NASDAQ index was up about 1.17%. It should be noted that Apple share prices traditionally fall after an announcement, but it will be fascinating to see if AAPL is able to hit a new high prior to the January 27th event. [via MacDailyNews]
Apple announces Q1 financial conference call
It's that time again. Apple will be live streaming their Q1 financial conference call on Monday, January 25, 2010 at 2pm PDT/5pm EDT. To follow along (Quicktime required), visit this page on the 25th. Of course, TUAW will be live-blogging the event with commentary, so feel free to join us for all the announcements plus a lively discussion. If the analyst's predictions are accurate, we should anticipate a blockbuster report. For example, Brian Marshall at Broadpoint.AmTech has estimated that Apple sold 3.3 million Macs during the last quarter, which would be an all-time single-quarter sales record. Meanwhile, estimates of iPhone sales during the same time period range from 11.30 million units sold (according to Brian Marshall at Broadpoint AmTech) to 8.17 million units (according to Mark Moskowitz, J.P. Morgan). The interesting thing is that the low estimate, 8.17 million iPhones sold, would represent a 10.8% increase from the last September's record of 7.37 million if true. We'll have all the facts in a few days.
App Store tops 3 billion downloads
Apple announced this morning that App Store downloads have officially broken 3 billion, and it happened in less than 18 months. In a press release issued today, Steve Jobs said, "...this is like nothing we've ever seen before. The revolutionary App Store offers iPhone and iPod touch users an experience unlike anything else available on other mobile devices, and we see no signs of the competition catching up anytime soon." The App Store broke the billion-download barrier in April and hit 2 billion in September. With all the new iPhones and iPod touches (estimated) sold in the holiday quarter, this number should only climb higher. Part of the store's success is perfection of the impulse purchase. It's ridiculously easy to find an app while you're in line at the bank for instance, do a bit of poking around and hit "buy!" Why not, it's only two bucks! Competitors have been launched, some more successful than others, but Steve's right in saying that nothing else has matched the App Store's success. Congratulations to Apple!
Estimates emerge of Apple's Q1 iPhone, Mac sales
Apple typically reports their 1st quarter financial results in late January, so we'll have to wait a few more weeks for the official word. However, the analysts have begun to share their estimates and the numbers are very impressive. Brian Marshall at Broadpoint.AmTech has estimated that Apple sold 3.3 million Macs during the last quarter, according to MacNN. Here's a little perspective: Apple's all-time sales record for Macs, set during the previous quarter, is 3.05 million. That record was a 17 percent jump from the 2.6 million it sold in the same quarter a year ago. Marshall also suggests that laptop sales could be up as much as 19 percent year-over-year at 865,000 units. Meanwhile, Philip Elmer-DeWitt has begun gathering estimates of iPhone sales and posting them at Brainstorm Tech. They range from 11.30 units sold (Brian Marshall at Broadpoint AmTech) to 8.17 units (Mark Moskowitz, J.P. Morgan). The interesting thing is that the low estimate, 8.17 million iPhones sold, would represent a 10.8% increase from the last September's record of 7.37 million if true. Despite would could have been a rocky year for Apple -- Steve Jobs was out for serious health reasons and a lousy US economy -- they did very well. Are you optimistic for 2010 or waiting for the other shoe to drop?
MarketWatch: Keep your eye on Apple in 2010
In an article on MarketWatch, Frank Cioffi explains why he believes Apple will deserve the investor's attention in 2010. First off is continued strong iPod sales, and we've got to agree. After sustaining a rate at or above 10 million units sold per quarter, you've got to wonder, "Doesn't everyone have one already?" But seriously, the annual updates are compelling enough to prompt people to upgrade (iPod touch, nano with video) or cheap enough to warrant a second unit (iPod shuffle). Apple knows how to sell iPods and the trend should continue in the new year. Also notable is Apple's seemingly renewed commitment to the Apple TV. Once described as a "hobby," Apple released version 3.0 of its software late last year. Also, there are rumors about that Apple is pursuing a subscription model with the major television networks. Expect to hear more from the Apple TV team in 2010. Additionally, Cioffi focused on Steve Jobs himself. "...Jobs' determination is as extraordinary as his ability to create compelling products." After missing half of the year to recover from a liver transplant, Steve returned to work in June as promised and, from an outsider's perspective at least, is back to business as usual. As Cioffi pointed out, what happened in Steve's absence is even more important for Apple's future: The stock continued to climb despite rumors of his rapidly-declining health and Apple demonstrated a strong bullpen of talent beyond Jobs. Cioffi goes on to list strong Mac sales, the App Store's performance and the ever-present tablet rumors as additional points of note, so go and read the rest of the article. Here's to a prosperous 2010! [Via AppleInsider]
China Unicom: we've sold 100,000 iPhones
Amid claims of poor iPhone sales, Dow Jones reports that China Unicom (CU) has sold 100,000 iPhones since the official launch in October of this year. While this represents a pickup in sales numbers -- CU reported selling just 5,000 units in the first 4 days -- it isn't incredibly impressive. China is the world's largest wireless market by subscriber accounts, and CU is the country's 2nd-largest carrier (China Mobile is first), representing some 144 million users as of October of 2009, according to Paul Wuh, an analyst covering China Unicom for Samsung Securities. "iPhone sales have been disappointing," Wuh said. "For China Unicom, with 144 million subscribers, 100,000 iPhone users aren't going to do anything for their revenue." What's behind all of it? As we've said before, the lack of Wi-Fi, strong black market and high prices are hindrances. Back in August of this year, China Unicom and Apple announced a 3-year deal. CU buys the handsets from Apple on a wholesale basis and does not participate in revenue sharing. China Unicom hopes that this deal will give them a leg-up on industry leader China Mobile. [Via Macsimum News]
The App Store unofficially breaks 100,000 approved apps
It's another milestone (unofficially) met, as Apple has passed the 100,000 threshold of approved apps in the App Store, according to App Shopper. If you're unfamiliar with App Shopper, they list all of the apps that are in the store, tracking updates and price changes. As of this writing, they're listing 101,847 apps approved for sale and 93,118 actually available. We imagine Apple will make an announcement when the latter number officially hits 100,000. Just last month, Apple announced that there were upwards of 85,000 apps available for purchase with sales figures in the billions -- 2 billion apps sold in fact, though there's no word on the mix of paid vs. free. Despite the (often significant) bumps in the road, the App Store continues to grow at an incredible pace.
TUAW Liveblog: Apple FY09 Q4 earnings call
Apple's earnings report came out just a few minutes ago, and the conference call is coming right up! Join us for the liveblog below as we follow along through the conference call. Apple FY09 Q4 Earnings Call
Munster predicts: Apple to sell 7 million iPhones in September quarter
Piper Jaffray senior research analyst Gene Munster, who is not pictured at right, is continuing his love affair with all things AAPL. In the last few weeks he's told us that the iPhone will be picked up by another U.S. carrier in 2010, that Steve Jobs will be on hand at the September 9th Apple music event, and that there would be an AppleTV announcement at the event (this was quashed by Jim Dalrymple at The Loop). Now the Munster-man is back with even more good news. He believes now that manufacturing capacity for the iPhone 3GS has ramped up and supply is adequate, Apple is on track to sell 7 million iPhones during the quarter ending September 30th. According to Munster, tight supplies of the 3GS at launch led AT&T store managers to recommend the less pricey 3G to customers. Now that supplies are adequate, store managers are recommending the 3GS, which remains the best selling device at AT&T outlets. Piper Jaffray's figures indicate that during August, the iPhone took share from BlackBerry, the Nokia E71x, and other competitors. Munster's last prediction isn't so rosy, but is based on historical precedent -- he expects Apple's stock price to dip after tomorrow's event by about 1 percent. [via AppleInsider]
Apple's 10K filing shows $3.34 billion in 2008 iTunes sales
Apple's annual SEC 10K filing showed that music-related sales increased by US$844 million (or 34%) to $3.34 billion in fiscal 2008, up from US$2.5 billion in 2007. Apple cited "heightened consumer interest in downloading third-party digital content" as the reason for the hefty increase. Apple noted increased net sales from the iTunes Store in each of its geographic regions. An increase in the amount and types of content available at the iTunes stores was pegged as part of this growth. Apple is the largest U.S. music seller, having knocked Wal-mart from the #1 spot in April of 2008. The revenue figures for the music-related business do not include iPod or iPhone sales.[via eWeek Apple Watch]
Apple's Q4 earnings estimates looking good
Just a reminder: Apple will hold their fourth quarter financial conference call tomorrow, October 21st at 2PM Pacific time. We'll be live blogging the call, so be sure to check back for our up-to-the-minute report and analysis.What should we expect? According to estimates from research firm NPD, it's good news, especially regarding Mac sales. Piper Jaffray analysts suggest, after examining the NPD data, that Mac sales grew by 25% - 29% in the fourth quarter. That's 25% yearly growth and represents nearly 2.8 million Macs.It has also been suggested that iPod sales numbers will be slightly better than Wall Street projections. We'll know soon enough.
Apple announces date for Q4 conference call
Earlier this week, Apple announced that their fourth quarter financial conference call will take place on October 21st. The live audio stream will begin at 2PM Pacific time.We'll be liveblogging the call, so check back on the 21st for up-to-the-second information and analysis. Apple's stock took a significant dive last month, as did the rest of the market. Still, Apple's overall market share continues to be strong, and retail stores continue to open across the globe. It will be an interesting report.[Via MacNN]
Apple Q3 2008 results liveblog, 5 PM EDT
This liveblog will be relaying and discussing Apple's Q3 financial results. Apple's third fiscal quarter encompassed sales between April 1, 2008 and June 30, 2008. Apple reported a record-breaking quarter, with revenue up 38% year over year and Mac sales at an all time high!You can listen in live here. Please join me in the blog to discuss the results, speculate
Apple will announce Q308 financial results today
Here's a reminder to our readers. Apple will announce the financial results of 2008's third quarter at the end of the day today, approximately 4:30pm EDT.Shortly thereafter (approximately 5:00 PM EDT), Apple will hold a live conference call to discuss the announcement. We'll be live blogging that call right here, so be sure and check it out. Also, you can follow along with Apple's live audio stream here.Dust off your portfolios, stockholders! It's time to see what you've bought yourselves.
Apple To Ship 2.5 Million Macs Thanks to Vista?
With all the current hype surrounding the imminent release of both the upgrade to Apple's .Mac service, now to be forever known as MobileMe, and Friday's launch of the new, improved iPhone version 2.0, let's not forget that Apple also makes other types of hardware that seems to be selling pretty well these days. In fact, according to a recent article up over at AppleInsider, Apple is apparently poised to ship 2.5 Million Macs in the Spring -- thanks, in some measure, to the poor reception of Microsoft's Windows Vista.According to BMO Capital Markets analyst Keith Bachman, Apple's potentially strong quarter, which ends in June, can be attributed to several factors. Among them, user dissatisfaction with Vista. "Thus far, user satisfaction ratings for Vista have been weak, and startup times for Vista have been known to be much slower than the Mac OS X," Bachman said in the article. "Thus, more than 50% of recent customers buying Macs in Apple retail stores are first-time buyers."In addition, the analyst added that this problem could help Apple's bottom line well into 2009 and could potentially improve the company's current world market share, raising it to 3.9% or higher. This is good news for those of us who remember the time, not so long ago, when most in the press and analysts like Bachman predicted Apple's certain demise. Still, even with this good news, we still need to hope Apple doesn't do something to hurt itself -- like bungle the .Mac to MobileMe transition or run out of shiny new iPhones at 8:30AM on Friday. That would not be a good thing.
TUAW liveblogs the Q1 2008 earnings call at 5PM ET
Apple will be reporting its 2008 Q1 financial results today at 5 PM EST. After yesterday's worldwide market plunge (U.S. exchanges were closed for Martin Luther King, Jr. Day), Apple shares dropped as much as 8% as the markets opened this morning. Though the stock has largely rebounded (thanks to the Federal Reserve's surprise emergency cuts in lending rates), this will certainly make for an interesting backdrop for today's earnings call.We'll be live-blogging the call (it is streaming live via QuickTime here) and trying out the CoverItLive service to see how it performs.Join us back here at 5 PM EST for all the action.
