updated 05:30 pm EST, Wed January 25, 2006
Strong Intel Mac sales
Sales of new Intel-based Macs may be stronger than expected, according to a new report. Despite anticipation of lagging sales of Apple's new Intel Mac computers, Apple is have having some difficulty meeting demand for its Intel-based Macs, according to analyst Shaw Wu at American Technology Research. Sales of the Intel-based iMacs are being fueled by consumers who waited for the release of the new Macs to purchase computers, according to Wu. In a note to clients, he said that there was a noticeable purchasing trend in the K-12 and higher education, content creation, and consumer end markets. Meanwhile, pre-orders for Apple's new MacBook Pro are also strong.
Following Apple's strongest quarter in its history, sales of iPods continue to flow, despite the traditional after-holiday taper in consumer purchasing. Sales of PowerPC-based Macs, iMac G5s, PowerBook G4s, iBook G4s, and Mac minis appear to be lagging; however, Wu beleives this is due to Apple's marketing message that the Intel chips in the new Macs are so much better than PowerPCs, and has refused to discount the previous generation PowerPC-based iMacs, which are still available at the same price points as the new Intel-CPUs.
"We are seeing some customer confusion in the field but we do not anticipate this to last," Wu said.
Wu expects Apple will quickly migrate the PowerPC product line to Intel processors in the next 1-2 quarters to forgo any further customer confusion in Apple's product line.
"We continue to believe it is in Apple's best interest to migrate the rest of its PowerPC product line to Intel within the next 1-2 quarters as selling two processor families and marketing one as superior to another adds to customer confusion and isn't a sound long-term strategy, in our opinion."
The firm says that Apple's fifth-generation video iPod sales also remain strong. The newest iPods have seen the lowest decline in sales, compared with sales in the other iPods. The sales trend could increase in the average selling price of the iPod from $207 last quarter to $210 in the March quarter.
Given the strong Intel-Mac sales (and pre-orders) as well as strong iPod sales, the firm believes strongly that Apple will deliver on its guidance for one of the strongest quarter's in the comany's 30-year history: "We remain comfortable with out above guidance March quarter estimates of $4.4 billion in revenue and $0.42 cents in earnings-per-share (EPS), above Apple's guidance of $4.3 billion and $0.38 cents."
Wu has set a price target of $101 and maintains a 'Buy' rating on Apple.