updated 10:20 am EDT, Tue April 22, 2008
Piper: Macs push margins
It is Macs that will help Apple most when it announces the results of its latest quarter tomorrow, argues research firm Piper Jaffray. While it is believed that NPD is overestimating Mac growth at 48 percent year-over-year, The Street's prediction of 32 percent is also said to be too low; Piper is anticipating 38 percent, equivalent to 2.1 million computers. Typically, Apple has averaged 26 percent growth in this quarter for the past three years.
Aiding the company should be iPod sales, which are also expected to trump Street figures. Whereas that publication is predicting fairly low unit sales amounting to 10 million, Piper is estimating a range of 10 to 10.5 million, driven principally by the February price cut for the iPod shuffle, which is said to have boosted sales significantly during the month of March.
iPhone sales are expected to rest somewhere between 1.6 to 2 million units, as compared to the precise 1.7 million suggested by The Street. This is said to be a healthy figure, as only sales of 1.3 million or lower would disappoint investors; conversely however, anything about 2 million would be surprising. Piper notes that a number of people may already be postponing iPhone purchases on rumors that a 3G version is due in June.
Piper is predicting a gross margin between 34 and 36 percent; if Apple attains the high end of this, plus sales of 2.1 million Macs, 10.3 million iPods and 2 million iPhones, it should generate revenue of $7 billion with an EPS rating of $1.19. This would surpass not only Street predictions but Apple's own guidance.