updated 01:25 pm EDT, Mon May 23, 2005
Merrill Lynch on Intel
In its latest report on Apple, Merrill Lynch weighs in on today's headlines regarding a possible . Analyst Steven Milunovich says a Wall Street Journal report that Apple might switch to Intel processors may hold some truth. "What is the benefit to Apple and consumers? One might be in notebooks, where Apple has said that heat dissipation makes it difficult to put a G5 into a laptop." Analyst Steven Milunovich points out that "this wouldn't have been a lead story a year ago," showing how far Apple has come in terms of cultural importance.
"Historically, changing chip architectures has been very difficult and painful. The article suggests that Apple may have already done most of work porting OS X to Intel Still, we'd be surprised to see a wholesale switchover to Intel processors with Mac momentum finally kicking in."
iTunes Video Store
Milunovich also comments on the possibility of a iTunes music video store. "The music industry doesn't have an outlet to sell music videos and likely would cooperate with Apple." In addition, Netflix said that given Apple's recent hiring and lease of space, the company "has designs on subscription video of some kind." And Apple has "expressed interest in high definition video." Milunovich says concerns about what Apple does next to maintain its level of success "seem premature."
"I want my V-iPod."
Merrill said that selling videos via iTunes may be a precursor to a video iPod. The new features within iTunes allow users to download full versions of QuickTime music videos. Merrill had previously speculated that iPod video capability for short clips could be available by the start of the holiday shopping season.
Best Buy off to slow Mac mini start
Store managers told the Merrill analyst that PC users are reluctant to make the switch to Mac and are opting for low cost PCs, such as Gateway's eMachines. Some store associates said they are at a disadvantage with Macs because Best Buys don't carry software for Apple, according to the research report. However, the firm says that "Mac mini sales appear solid at Apple stores."
Merrill Lynch reiterated a 'Buy' rating with a price target of $51 per share.