My dear friend over at
Tips are for Waiters and Herb Greenberg over at
MarketWatch don’t think Apple’s earnings were all that impressive. As an Apple holder and an Apple user ( 1st Gen Mac Mini, 3G iPod, 2 iPod Minis,
video iPod, and
MacBook ), I think that Apple investor contrarians typically compare Apple to companies like Microsoft, Intel, and Cisco. These companies have dominant positions in their market. Apple, is a small niche player. It has lots of room and lots of momentum behind it. However, I don’t think even the move to Intel chips will allow Apple to put a dent in Microsoft’s hold on the desktop computing environment. It’s unfortunate, but it’s true.Most people buying Apple computers will be students, web designers,
media pros, some programmers and Linux geeks (like myself). I tried convincing my father-in-law and wife to buy an Apple for my mother-in-law but they were extremely hesitant. They wound up buying a 17” HP laptop for $749 from Best Buy. The point being, though Apple’s earnings might be better than last year, the stock is down considerably from the high. The product pipeline move to Intel is almost complete. The remaining
Power Mac G5 is expected to be transitioned during the
Apple Work Wide Developer Conference in August. Once the Power systems are migrated, Apple will probably see a small bump in people moving to the new Intel Power systems, however, Apple will also probably see a bit of a drop in the other Intel based products due to the Mac faithful having made their initial switch from PowerPC to Intel chips.
With the right marketing, Apple does have a chance to convert casual Windows PC users, like my in-laws, over to a Mac if the price points are comparable to a Windows PC (Macs are still not at the same feature-price point as Windows Desktops and Laptops). This will exert pricing pressure on their product line but it can allow them to sell more Macs and iPods. We all know Apple is famous for rolling out a new version of OS X every 12 to 18 months, and coming out with new iPods every 12 - 18 months as well. I surmise, the move to Intel will allow them to do the same with their Mac hardware. Who knows, possibly Apple will sell Macs with iPods or iPhones bundled in. 
I’m still bullish on Apple and plan to continue holding my position, at least while Steve’s running the show. Sorry Nusair.
Were Apple’s earnings really that impressive? Herb doesn’t think so.
Read more at Nusair’s blog, Tips are for waiters
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