Factors Working for and Against Apple
The question remains to be seen, however, whether Apple can continue robust sales of its Macs and operating system upgrades after Microsoft releases its own much-anticipated next-generation operating system, Windows 7, on Oct. 22. A number of analysts have predicted that the release of Windows 7 will have little effect on Apple's sales. "We have concluded that no negative correlation exists [with Apple's] hardware sales when Microsoft launches a new OS," Brian Marshall, an analyst with Broadpoint AmTech, wrote in an Oct. 12 research note. "Ironically, we believe new OS launches from [Microsoft] may have even acted as a 'delayed accelerant' to Apple's computing sales. However, we believe Apple's success (or failure) in the computing market is largely idiosyncratic (or company-specific) in nature and not dependent on others in the industry.However, Marshall cautioned, factors such as cannibalization of iPod sales by the iPhone and sustainable carrier subsidies from AT&T could affect Apple negatively. Apple also has products in its pipeline that could affect its guidance for the next quarter. During the Q&A session following the upcoming Oct. 19 earnings call, an analyst or reporter may ask Apple executives about the company's anticipated tablet PC. While Apple has refused to comment on the possibility of such a device, reports and speculation have abounded that it could be introduced sometime in early 2010. In an Aug. 7 research report, Piper Jaffray analyst Gene Munster predicted that an Apple tablet PC would sell in the $500 to $700 range, feature a multitouch screen and run on either the iPhone OS or else a modified version of the Mac OS X. Munster also estimated that the device could potentially sell 2 million units during its first year of release, generating some $1.2 billion in gross revenue for Apple. The company's last earnings call, on July 21, saw Apple Chief Operating Officer Tim Cook fail to issue a denial about the possibility of a tablet PC. "I never want to discount anything in the future and never want to specifically answer a question on new products," Cook said. Nonetheless, Apple filed a patent application in June for a touch-screen interface with a screen capable of being manipulated with not only the fingers of both hands, but also palms-in theory, opening a device to a broad range of activities including drawing and typing. Reports in The Wall Street Journal indicated that Apple CEO Steve Jobs had focused much of his attention since returning to the company on the tablet. Jobs had spent much of 2009 on medical leave, receiving a liver transplant in April for a still-undisclosed condition.
"It is our view that Apple has the ability to potentially double its computing market share on a global basis from 4 percent today to 8 percent over the next few years," Marshall added, citing the iPhone's presence in 80 countries, Apple's business model and its high cash flow as reasons for an optimistic guidance.