The Mac Observer has six different articles on Apple’s Q2 financial results. First time buyers are up 50%, while Apple says the interest in Boot Camp is high. Apple reported a revenue of $4.3 billion, strong iPod sales, and 40 new Apple Stores in 2006. However, pro users are hesitating on buying new Macs because they are waiting for Microsoft’s and Adobe’s universal binaries.
Once those Universal apps get released then look out!
Buy stock NOW! Buy Intel Macs later.
Even if Apple is overestimating switchers by a factor of two and even if we only “keep” 95% of them, things are looking up.
And he said Apple should go open source, see now the results Mr. DVorak.
Apple will finally announce PowerMac Workstations with Merom/Conroe CPUs in WWDC06?
Someone on the Ars forums did a nice graph of Mac unit sales in the past six years based on their financial statements:
http://www.pegasus3d.com/macsales9904.gif
Combined with total PC sales numbers from Garther he gets these graphs for market share trends:
http://www.pegasus3d.com/macmarketshare.gif
there’s an interesting article over at motleyfool too
http://www.fool.com/community/pod/2006/060420.htm
1) To Windows fanatics; is this Apple dying? I’d love to be a shareholder in this dying company!
2) Apple has enough money to purchase Adobe; whats holding Steve back? imagine the leveraging when it comes to getting customers, ‘oh, want to go to Dell? ok, we’ll throw in the software for free then!’.
3) The point is, with the switchers, even if they do move to using Windows, they now have the ability to pull them back to using MacOS X through some compelling features.
What I do think is holding them back are lazy software companies, and their focus on big expensive executive parties rather than investing those profits back into speeding up product development and shipment to market.
I agree, Apple should buy Adobe…if it’s even for sale. I work at a Fortune 500 company that is a total Windows shop through and through. The only Apple software you’ll find there is iTunes and Quicktime on some people’s computers. However, lots of people have Photoshop. If Apple re-branded it “Apple Photoshop”, it would go a long way toward getting their name and reputation into the Fortune 500 space.
I agree, Apple should buy Adobe…if it’s even for sale. I work at a Fortune 500 company that is a total Windows shop through and through. The only Apple software you’ll find there is iTunes and Quicktime on some people’s computers. However, lots of people have Photoshop. If Apple re-branded it “Apple Photoshop”, it would go a long way toward getting their name and reputation into the Fortune 500 space.
Why even wait for it to go on sale; snap it up in a hostile take over; they’ve got the cash in their pocket right now; go for it; heck, I’m sure offer some Adobe shareholders the ability to pick up a few Apple shares in the process, and I’d doubt they’d turn down such a good offer.
It would be a graphics powerhouse; everything one needed, under one roof, and the ability to also muscle out Windows once and for all from the graphics space.
Edited 2006-04-21 07:54
…if Apple advertised its computers and its OS on television. (I don’t think the recent “dull little boxes” ad counts, because it sounds more like an ad for Intel.)
I remember back in the late ’90s when the iMac was introduced, there were TV ads for it all the time. Even more ads when they introduced all the colors. Their marketshare during that time was the highest it’s been ever since, even though now they have much better products with a much better OS and software. Don’t tell me they couldn’t come up with some slick ads to advertise the mini as hard as they do the iPod and iTunes. Why have they been holding back? Just because the “switch” campaign wasn’t a success? I think that had more to do with the weird ads that didn’t show the product than anything else. Please, Steve, tell the world about Apple’s products and OS X. And do it during prime time.
…if Apple advertised its computers and its OS on television. (I don’t think the recent “dull little boxes” ad counts, because it sounds more like an ad for Intel.)
Better still, how about Apple realising that the world doesn’t revolve around the United States; fix the damn supply issues so that new Mac owners in New Zealand and Australia aren’t waiting 6 weeks for a damn computer! its shocking when there is a waiting list on products that have been out for months!
Another good advice, how about fixing up the damn localising, because its crap on MacOS X; could someone *PLEASE* inform Apple that New Zealand uses the British dictionary for spelling (Australian includes US’isms it their spelling, which NZ doesn’t use (Labor being one example)), metric for measuring and A4 for paper size.
Also, how about some Apple stores IN ACCESSIBLE LOCATIONS; in Christchurch, MagnumMac is where donkeys dig for daylight, and Harvery Norman have a couple of Mac’s, out of date and being sold by people who don’t have a clue about Apple, MacOS X or the hardware.
But.
First, the number of converts.
If you read through all the information that has come out, it seeems that 50% of their US retail branch purchases are now first time Mac buyers, and this is up from about 40%. The actual number of purchases through this channel in this way seems to be 77,000. So the incremental gain is of the order of some tens of thousands. Total Apple computer shipments are about 1.1 million.
The gain is in the noise. Now, whether that 77,000 is a big or a small number, its hard to say. It depends how many leavers there are. If you look at total market share trends, they are barely maintaining market share of shipments. I don’t have access to the detailed numbers, but from the releases, the two companies in this space that you have to watch are Dell and Acer. Acer because it is growing very rapidly. Dell because, unlike Apple, it has a consistent record of growth over nearly 15 years. Dell is, by the traditional criteria, a classic growth stock. Apple, by those same standards, not a growth stock at all, but one characterised by erratic swings of revenues, profits, and management competence, and with no consistent record of growth.
Second, the market performance last quarter. If you compare quarter for same quarter performance, you find that the 1.1 million shipped is an increase of 4%. This sounds pretty good. If however you compare what happened to shipments from last quarter to this quarter, and compare that to what happened to the industry during this same period, the picture is a bit different. Apple sales dropped 142,000 from the previous quarter, which is an 11% decline, whereas the market as a whole rose 13% in the same period.
I’d also add, if you check out the Pegasus links given by an earlier poster, you’ll see that since ’99 what has happened is a fall and then a recovery to ’99 levels. Yes, its a recovery. But over 5 or 6 years its static, in a period in which the industry has been growing. This is not growth stock or industry changing performance, any more than a 2.3% global market share is.
Third, the real significance of the results must be how they record the changing nature of Apple. Some 40% of revenues (in some accounts 50%) now seem to come from iPods. This is the company metamorphosing into a consumer electronics company, which is a market with much shorter product life cycles, and much more subject to swings of fashion, and more open to competition based on brand and channel. In this space, Apple is a one product wonder. Its a fabulous performance, but it is only one product line. It can turn on a dime, and if it does, what is the replacement?
Some people on this and other threads are arguing that the news means the stock is a great buy. Apple stock has indeed been a great buy in the past, and probably will be again. The time to buy Apple however is not when the good news is out. The time to buy historically has always been when the bad news is coming out, and it is entering another of its historic death plunges. Which, history shows, it will do. Right now, Apple is selling, allowing for the cash mountain, at 26 times projected earnings. Rich, very rich. Very hard to make money paying this much, whether its Apple, Dell, GM, whoever.
This is not investment advice. But I confidently expect that Apple will sell at less than a quarter of its present value within two years. No, I don’t know what they will do to screw up. But they will find something!
Edited 2006-04-21 08:31
> This is not investment advice. But I confidently expect that Apple will sell at less than a quarter of its present value within two years. No, I don’t know what they will do to screw up. But they will find something!
They seem confident enough to build a whole new campus:
http://www.mercurynews.com/mld/mercurynews/business/14382130.htm
Not to disparage your thoughtful analysis, but I think at some point people will tire of having to deal with Windows. At some later point, so will businesses. THEN the upgrade to Mac will begin in earnest. But don’t hold your braeth; businesses move at a snail’s pace because their needs (E-mail and Powerpoint are SO lightweight). I bet a lot of businesses still use COBOL and Win95.