updated 01:50 pm EST, Thu January 4, 2007
Analyst on MWSF keynote
Apple's iPhone will almost certainly enter a production phase of 12 million units within the next 2-6 months, and the company will likely launch its iTV wireless media streaming device at Macworld with some improvements over the September debut, according to Piper Jaffray senior analyst Gene Munster. "Despite all of the talk regarding new product announcements, or lack thereof, at Macworld, we continue to believe that the announcement of an iPhone would be positive for Apple shares and no sign of this product would be a negative," Munster said. Investor expectations over Apple's product pipeline have bolstered the company's stock in recent weeks, resulting in significant gains backed by NPD data suggesting a very busy holiday shopping season for the Cupertino-based company. Apple said it was "very excited" about its upcoming products, and industry watchers have watched the iPod-maker move toward consumer living rooms with the debut of its Front Row software that ships with new iSight-enabled Mac systems. "With the release of the iTV, a wireless media streaming device, Apple will continue its slow-but-steady push into the living room." Piper Jaffray maintains its 'outperform' rating on Apple shares with a price target of $99.
Apple's trek into the home entertainment market faces four obstacles, however, as the widespread acceptance of the iTV or similar devices is based largely on the increased availability of downloadable movies. Hollywood studios have proven reluctant to join Apple's iTunes Store for fear of angering large DVD retailers such as Wal-Mart and Target, but say they want to follow in Disney's footsteps to capitalize on the success of pay-for-play full-length movie downloads.
"We expect other studios to offer movies on iTunes within the next six months, potentially at Macworld," said Munster, who recently met with four of the six major film studios to discover four major roadblocks that are limiting the acceleration of movie downloads. Those roadblocks include Digital Rights Management (DRM) concerns, flexible pricing, fears of 'retaliation' from DVD retailers, and licensing library titles.
Addressing the rampant rumors surrounding potential Apple product releases, the Piper Jaffray has addressed the most prominent suspicions to clarify Apple's potential product roadmap moving forward. In the next 6-12 months Apple will likely debut an iPhone with a candy-bar form factor, a widescreen iPod with touch-sensitivity and wireless features, as well as a second 'smartphone' iPhone model with an integrated keyboard, according to Munster. Also likely is an iPhone storage capacity of 4GB or 8GB, alongside an iSight camera and multiple carriers as iPhone providers.
Possible but unlikely surprises within the next 12-18 months include an ultra-portable 12-inch MacBook Pro, a radio-transparent material used for the iPhone casing, an iPhone featuring 'iChat Mobile' video as well as instant messaging capability, and the release of Mac OS X 10.5 Leopard at Macworld.