The Mac Momentum

By Scott Ferguson  |  Posted 2007-01-18 Print this article Print

Kariithi believes that the Mac still has a lot more room to grow in the next year, possibly as much as a 30 to 35 percent increase. That will help in what Kariithis view will be a pivotal year for Apple as the Cupertino, Calif. company looks to sustain the phenomenal growth it produced in 2006, mostly from sales of its music player.

"I dont think we have seen the full affect of the Intel switch just yet," Kariithi said.
For the quarter that ended Dec. 30, Apple reported that its net income was about $1 billion, or $1.14 per share, compared to $565 million in net income—65 cents a share—from a year ago. Revenue for the first fiscal quarter of 2007 stood at $7.12 billion.
Apple also announced that it had shipped more than 21 million iPods. For the next quarter, Apple executives are calling for revenue of $4.8 to $4.9 billion and earnings of 54 cents to 56 cents per share. Reuters is calling for revenue of $5.2 billion and earnings of 60 cents a share. Richard Farmer, an analyst at Merrill Lynch in New York City, noted that Mac sales for the quarter were below Wall Street expectation—1.6 million shipped compared to a prediction of 1.75 million—but that sales will pick up once Adobe Systems releases its Photoshop CS3 digital imaging software later this year. "Although we concede the Mac result was below our expectation, we still view 28 [percent] growth as very solid against a market growing 8 [percent] and we expect the pace to remain healthy as new Macs are introduced and as pent up demand in the creative professional segment is released this Spring with Adobe creative suite native on Intel/Mac," Farmer wrote in a Jan. 18 report. Munster also agrees that CS3 could increase Mac sales. Analysts have said the release of the Mac OS X 10.5, also known as Leopard, could help sustain Mac growth as well. Shaw Wu, an analyst at American Technology Research of Greenwich, Conn., believes that the Mac will be part of a four-prong strategy that will include the iPhone, Apple TV and the iPod, and Apples desktops and notebooks will benefit from this strategy. "We see several catalysts in the quarters ahead, including Mac OS X Leopard, new movie and carrier partners, lower cost cell phones, and further extension of its core technology franchise into new business areas," Wu wrote. The only real issue that could slow Apple down could be how far the stock backdating probe reaches into the company and if Jobs will be directly affected at some point. "Unless there is direct action, I dont expect [the backdating probe] to bother the day-to-day operations," Kariithi said. Check out eWEEK.coms for the latest news, reviews and analysis on Apple in the enterprise.


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