updated 10:55 am EDT, Tue June 7, 2005
Long term benefits
Apple's transition to Intel chips will allow it to provide improved performance, better heat and power management, and lower price points, especially for mobile platforms, according to Banc of America Securities. The research firm, who rates Apple at a 'Buy' with a $44 price target, said that the announcement was a " for the next five years: "Further, we have always believed that Apple's value has rested with its software development (for its OS and applications), rather than the hardware," according to the Forbes report. In a research note, research firm Piper Jaffray said that despite the possibility of pushback from its current developer community, Apple has three major benefits from Intel transition: better consistency in processor supply, improved CPU pricing, and a larger potential developer community.
"Over time, we believe an Intel-based Mac would lead to a larger developer community, potentially providing for greater breadth of applications," according to Piper Jaffray Senior Research Analyst Gene Munster.
Munster continued to focus on Apple's lead in the digital music industry and said that the company could use that foundation to continue to grow its Mac business using the "halo effect."
"Apple's domination in digital music is a critical piece to the story, but we do not believe that iPod is the only potential growth avenue. Indirectly, we expect iPod to continue to be a foundation for growth in other parts of Apple's business, and we expect that by the end of CY05 more than 35m iPods will have shipped, providing Apple with a greater scope of awareness for various products ("halo effect").
Piper believes the iPod will continue to drive sales for the rest of the fiscal 2005 year as well as 2006 based on the assumption that iPod owners who are PC owners will increasingly migrate to the Mac.