AAPL hit by outlook

Shares of Apple today slipped to their lowest levels since late last year, as one analyst predicts that the company may not be able to hit Wall Street's estimates for the company's September quarter (its fiscal fourth quarter) amid mounting pressure from soon-to-be competitors such as Microsoft. The company, expected to announce earnings for its July quarter on July 19, could face both revenue and profit shortfalls as it cuts back on shipments of iPod digital music players to transition to new/updated iPod models. Reuters reports that Apple shares slipped to a nine-month low after Credit Suisse First Boston analyst Robert Semple said he expects Apple to forecast revenue of $4.6 billion to $4.8 billion, shy of the $4.9 billion noted by Reuters Estimates. In addition, the analyst said that Apple could forecast a quarterly profit of 50 cents a share, short of analysts' view of 52 cents a share.

"We expect Apple will once again use the September quarter to reduce iPod inventories as the company prepares for a refresh of its product lineup, which we continue to believe will occur in the Sept/Oct time frame," he said in a note to clients.

Along with rumors of delays in the new iPod, the recent spade of rumors about Microsoft's upcoming iPod killer have also put pressure on Apple stock, according to the report.

"We are continuing to hear that Microsoft may be much closer to launching its iPod killer, a wireless iPod. I think that could be behind the pressure we are seeing in Apple," Jon Najarian, co-founder of information Web site insideoptions.com, told Reuters.

Reports have said that Microsoft will start selling a wireless digital music and video player to compete with Apple's iPod by the holiday season. While it is rumored to have advanced features such as over-the-air downloads of movies and songs, it is not expected dethrone Apple's dominate iPod music player; however, any new offering could cut into Apple's marketshare, affecting both profits and revenue targets for the December quarter.

by MacNN Staff