Apple's new iMacs viewed as boon for sagging desktop sales
Piper Jaffray
Following the announcement of new hardware from Apple on Tuesday, Piper Jaffray Senior Research Analyst Gene Munster issued a new note to investors, in which he predicted that the new iMacs will help Apple's desktop market rebound during the December quarter. In the September quarter, desktop Macs saw a year-over-year decline in sales of 16 percent.
"The headwind that existed in the Sept. quarter due to aging Mac desktops has now been turned into a tailwind for Mac units in the Dec. quarter," Munster told investors.
In all, he expects 2.86 million total Macs to be sold in the company's first quarter of its 2010 fiscal year. That would put sales up 13 percent year-over-year — a number that Munster said could prove conservative, given that total Mac sales of portables and desktops were up 17 percent in the September frame.
Given Tuesday's releases, he believes that Wall Street expectations for Mac sales could also be conservative.
Apple this week released new, thinner 21.5-inch and 27-inch redesigned iMacs; a new MacBook with a unibody polycarbonate design and LED-backlit display; and faster Mac minis, including one new Mac OS X Server option. The company also released a new multi-touch mouse known as the Magic Mouse that will work across the Mac lineup.
Munster said Apple's guidance for the September quarter of $1.70 to $1.78 earnings per share under the generally accepted accounting principles is conservative, though slightly less than usual. However, he said, the release of new Macs so early in the quarter means it is still likely well below what the hardware maker will actually earn.
Piper Jaffray once again reiterated its overweight rating on AAPL stock and has maintained a price target of $277.
Kaufman Bros.
Similarly, analyst Shaw Wu with Kaufman Bros. said that the new iMac and Magic Mouse are the most intriguing products announced by Apple Tuesday. He said the new iMac offers value to consumers and is positioned to be a "sleeper hit."
In his note to investors, Wu said it was particularly interesting that Apple decided to launch so many new products without holding a special event. He called the timing of new products "sooner than expected and somewhat curious."
Wu, also, said the new iMac is poised to provide a boost to the desktop Mac business, which struggled last quarter.
"We believe this refresh will ensure that strong Mac momentum is maintained and allow desktop Macs to once again be a growth business," he said.
In addition, the new Magic Mouse was viewed as another example of "horizontal integration," with Apple employing its multi-touch technology across numerous products. This strategy, Wu said, allows the Mac maker to leverage its research and development investments, and also makes it easier for new customers to learn to use other Apple products.
"We believe the Magic Mouse could serve as a key differentiator for the Mac, bringing its multi-touch technology from its iPhone and iPod touch," he said.
Kaufman Bros. restated its buy rating for AAPL and has maintained a price target of $235.
151 Comments
While not taking anything away from the new iMacs, they are really great. However, many still crave a mid sized, well priced desk top (as in a tower) so they can 'tinker' with cards yet don't need the high end Mac Pro. I am lucky enough to own a Mac Pro but I often wonder if I didn't need one for work if I'd go for an iMac after always being able to change cards. I also suspect many PC Geeks may prefer this approach too and be more likely to switch if they can mess with the insides at a price they can afford.
Apple's timing with these updates was perfect.
I think Apple is in for another record quarter, thanks to the hardware refresh + Christmas.
My kids broke my 24" iMac last week, they snagged the power cord and it went flying off of my desk and smashed the screen. My insurance company picked up the iMac this week with the view to repair or replace it. Kinda hoping they replace it with the 27" one now, seeing as it is cheaper too.
Also, beware, Apple didn't use safety glass so. If your iMac glass screen breaks it shatters and is razor sharp.
Many still crave a mid sized desk top
Who is "many"? Many on Apple fansites? Which means a minority of a minority of Apple's market.
If there was actually enough demand for it, we might have seen one already. Desktop sales are horrible in the entire industry. Apple isn't going to spend time developing a hole into which they can throw money.
While I really like the new iMac and even want one to replace my current Aluminum 24", there is not enough there to entice me to do this. The SD card slot is way over do, the 16:9 ratio is nice and I would love to have the extra width when doing my CAD work, and the LED is another one of those nice things that I just can live without until something happens to my current machine. The only reason worth upgrading IMHO is the quad core option.
However, I am not going to pay a high premium for the quad core during this economy. I am in Fusion all day long with AutoCAD and while the extra processors would be nice, I don't think this will move those with an aluminum display to move now.
It might entice new buyers though.
I will tell you what would have been nice and made me make a purchase. A quad core in a 13" MBP.