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AAPL Stock: 439.66 ( -3.27 )

http://www.macnn.com/articles/05/06/07/merrill.lynch.aapl.intel/

Merrill Lynch: AAPL still a "Buy," Apple media center

updated 09:00 am EDT, Tue June 7, 2005

 

Merrill Lynch AAPL-Intel


Merrill Lynch today maintained a Buy rating on Apple, with a price objective of $51 per share. Although the stock didn't react favorably after the , that could be due to "hang over left from last week's battery failure lawsuit and higher inventory reports." Analyst Steven Milunovich said some may insist that Apple is "giving up its competitive advantage using IA's." However, Apple's Steve Jobs said, "more than even hardware innovations, the core of the Mac is (still) the operating system." Milunovich also commented on an Intel-based media center, the transition to Intel, and Mac OS X sales.

Apple media center?

The relationship between Apple and Intel could open the door to a low cost TV-based "Mac media center," Merrill Lynch said today. "The new device powered by a more cost-effective chip from Intel could be the way station for digital media such as photos, music, TV, and movies. Apple's new iTunes upgrade includes codec to run MPEG-4 movies and clips."

The Transition: timing is critical

A "tough task" lies ahead for software developers, but Microsoft is ready for the challenge, Merrill said. Jobs said the "catch up is not done yet."

"Thousands of software applications will now have to recompiled to run on both PowerPC and IA Macs, which could turn into a difficult endeavor. Microsoft said its plan to create future versions of Microsoft Office for the Mac that support both PowerPC and Intel processors: timing here is critical."

Tiger sales

"Apple's Tiger update doubles our conservative expectations," the investment firm said. Apple announced it expects to deliver over two million copies of Mac OS X version 10.4 "Tiger" by the end of this week, including Macs shipped. "We estimate Apple could pull in almost $150 million from the upgrade in the June quarter, which would add an additional penny to our estimates. We originally expected that only 6.5% of the installed Mac base would upgrade, but that figure now may be in low double digits. We have increased our fiscal 3Q estimate to $0.30."


by MacNN Staff

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  1. dave a

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    06/07, 09:44am | report spam | Reply |

    I wonder...

    ...what will happen. Sales could shoot up briefly as people grab G4s and G5s to run their legacy apps, then fall to nothing (think Jeep Cherokee after the Liberty was brought out - then again, Cherokee sales didn't fall to nothing! I think chrysler just couldn't bear the thought of ten more years of the Cherokee, which was supposed to disappear when the Grand Cherokee showed up.)

    On a personal level, I'm still dithering on an ibook. I'd get something slower than the ones coming out just a year from now, and sure to be left behind within its useful lifespan (I am using a clamshell model now, from 1999), but it would be a useful tool for running my Classic and PPC-only apps after the move to Intel!

  1. denim

    Mac Elite

    Joined: Jun 2000

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    06/07, 09:46am | report spam | Reply |

    Re: I wonder...

    I hear that. I'm running a 6 year old Powerbook (Wallstreet) which is definitely due for replacement, but I wanted a G5 replacment. Now it looks like that's not going to happen. We'll see what [b]does[/b] happen.

  1. dave a

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    06/07, 09:47am | report spam | Reply |

    More...

    ...and I just found out that if you don't use a subject, your message doesn't get posted.

    BTW anyone notice how MacRumors' "great new system" failed to operate past the first give minutes?

  1. dave a

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    06/07, 09:56am | report spam | Reply |

    Denim,

    We're on the same page I guess. 333 MHz is fine for OS 9 though Explorer takes forever, but like you, I suspect, I find any G4 a bit sluggish with OS X. Though they do about the same on speed tests, my dual 1.25 G4 tower is absolutely in the dust compared with an iMac G5 in terms of the user interface. Strange... well, I was going to get a G5 as soon as the G6 came out, which I and I suspect mostpeople thought would be around this year, but now I'll have to wait for the Pentiums.

    On the lighter side, I do know some trustworthy people who say that the new AMD chips and perhaps the new Pentiums are FAR better at power conservation, and I'm talking desktop and well as laptop. Could be that as Intel and AMD have been designing for efficiency, IBM has been acting like Ford with giant SUVs... "nobody cares about power efficiency."

    Mac Mini and G4 laptops aside, the newer Macs are massive heat generators, just like my AMD Athlon XP box which I use as a space heater in the winter and try to keep off in the summer. Even my G4 tower seems to expell gobs of heat at all times, whether it's being "used" or not. Just sitting there it's a hair dryer (albeit a very quiet one).

    One thing is certainly good for us - we'll be off the see-saw of performance.

    One thing may be bad - using the same processor will show how terribly inefficient OS X is at certain tasks (see the recent speed test in ars technica or some other similar techie webzine). I mean, that's kinda obvious if you've ever run X and OS 9 on the same single-CPU machine, but still... I hope they clean up more of the underlying base code. Maybe that's part of the focus of Leopard - that and fixing Spotlight. (I used 10.3 the other day and was amazed at how fast and efficient searching for filenames was! and Easyfind has become a necessity.) (Didn't they user-test 10.4?)

    Anyhow... moving to Intel provides another benefit, assuming they don't have a custom-designed version of the x86 chips: being able to use standard chipsets, albeit with their own modifications. It'll save 'em tons of engineering dollars. Jobs must've hated seeing Dell's costs so low from merely repackaging the results of others' engineering. If Apple can do something similar, using identical chipsets but with a different BIOS...

    How long, I wonder, before we get a new VirtualPC - if ever? How long before we get open-source virtual PCs to run Linux and Windows? (Will WINE work?) How different are these new boxes? These are all questions nobody has answered... and how much of the shareware/freeware will work?

    For that matter...are Classic apps finally dead? I'm still using Cricket Graph (1988)... wonder if this'll give a kick in the butt to vMac?!

  1. the Rebel

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    06/07, 10:59am | report spam | Reply |

    Virtual PC

    It is entirely possible and likely that WINE will developed to run Windows apps on an Intel based Mac. That certainly does not mean that ALL Windows apps will run or that they will run well. WINE has existed for Linux for almost as long as Linux has, but still, running Windows apps on Linux is not so great.

    Another thing to remember is that OS/2 was able to seamlessly run Windows apps. In fact, it ran Windows apps better than Windows did. Then Microsoft released an update for Windows which broke compatibility. Microsoft released an update to MS Office that broke compatibility. IBM released updates to OS/2 to address the incompatibilities, but Microsoft capitalized on their ability to keep changing Windows so that IBM always had to play catch up. Microsoft ran a marketing campaign which criticized OS/2's inability to run Windows apps consistently (conveinently ignoring the fact that the only problems were due to Microsoft changes). The ignorant public bought the negative hype. Unfotunately since OS/2 could run Windows apps as well as it could, software developers decided that they could just keep writing Windows apps instead of investing R&D for writing native OS/2 apps. OS/2 was superior to Windows (32 bit, multi threading, multi tasking, robust graphics) but it had much less marketshare than Windows. Software companies decided that if they could develop one version of an app that they could sell for both platforms then that was more cost effective than writing 2 separate native versions of the app. This was a major factor in the death of OS/2.

    The exact same thing could happen to OS X once Apple has converted to Intel. If a decent version of OS X WINE is made then software companies may decide that it is more cost effective to just develop Windows apps that run on both Windows and OS X WINE. Why spend extra R&D to write native OS X apps for a relatively small OS X marketshare when the OS X users can just purchase and run the Windows version?

  1. tonalsickness

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    Joined: Feb 2005

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    06/07, 11:29am | report spam | Reply |

    heard

    i hear that WINE should be a Mac app about 2 days after intel chips are put in macs... also heard you can just dual boot with OS X or Longhorn/XP

    I personally needed a new computer, and was going to get a dual 2.7... now I'm thinking about trying to download a pirated x86 10.4.1 in a few weeks test it on someones Dell to see if it works and then if it does just buy a Dell... I guess I can deal with my 700MHz iMac until then for most stuff... naw probably gonna go with a 2.3 GHz... my biggest pain is the whole not being able to run my programs on the new machine anyway... at least I can run the stuff i currently use on a 2.3 GHz... already test my apps on a friends 1.8GHz g5 to check for g4->g5 errors

  1. testudo

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    Joined: Aug 2001

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    06/07, 01:49pm | report spam | Reply |

    WINE

    I thought WINE was a library set that people could use to compile their Windows apps onto Linux, not an emulator for the chip or the API. Or does it have various functionality?

    Oh, and being able to run Windows apps might be nice, but, to me at least, I'd want them running like an OS X app (using the menu bar, that kind of thing), rather than the stupid "windows" way of menu-bars everywhere.

  1. webraider

    Forum Regular

    Joined: Nov 2004

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    08/12, 10:25am | report spam | Reply |

    No Offense

    But the key to a Media Center is Hardware Encoding, and this would be better handled by a Graphics Card with Encoding Acceleration, Than a new Processor. I have a G4 1.2 GHZ and I tried an Alchemy TV card in it. The encoding from recording was horrible, and the video Clipped all the time. I then returned it and purchased and Eye TV. Incredible difference when the Processor doesn't have to encode and display at the same time. Some Video Cards actually help PC's do this, but Apple didn't want that feature in their hardware. They simply didn't have to wait for a pentium to do this.

    That also said... a dual Pentium (or G5) may help the matter some.. but there would have to be an application from Apple written to specifically take advantage of such a thing.

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