AAPL recession-proofed?

Apple is mostly recession-proofed, claims Kaufman Brothers' Shaw Wu. The analyst agrees with recent views that Apple may not be as dependent on Steve Jobs as has sometimes been thought, and that the company's real threat at present is simply the global recession. Even then, the company should be mostly immune to any serious impact, says Wu.

Part of this stems from the fact that the company does not sell generic commodities; Macs for instance are distinguished by unique software such as Mac OS X, and industrial design that does not resemble typical PC casing. Both computers and smartphones like the iPhone have meanwhile become "necessities," according to Wu, making people willing to spend extra money on enhanced versions.

Apple is also said to be influenced more by product cycles than up- or downswings in the industry. Sales rise whenever a new batch of products is announced, and only tend to slump dramatically when products have gone a while without a refresh, such as the present iMacs. The company also has the ignominious advantage of being a minority player, holding 3 percent of the computer world and 1 percent of cellphones; it has less to lose than rivals such as Dell or Nokia.

An undermining factor is thought to be Apple's average selling prices (ASPs), which are higher than those of many competitors, and may convince people to shop for cheaper devices in a time of economic danger. Apple is nevertheless expected to meet or surpass its guidance for the March quarter, currently set at $7.6 to $8 billion in revenue, producing between $0.90 and $1 in EPS.

by MacNN Staff