David Bailey of Goldman Sachs
May 23, 2008
We continue to expect Apple to beat its 10 million unit goal for calendar year 2008 driven by broader global distribution and the availability of third-party applications, which should keep Apple well ahead of the competition.
Our analysis shows that Apple will almost double its available subscriber base in calendar 2008 vs. 2007, with 100% of that growth coming from outside of the US as Apple signs up carriers in more than 40 new countries in Europe, Asia, the Middle East, and Africa.
We have only assumed contract subscribers in our analysis, as we think pre-paid customers are not prime candidates for the iPhone. While this reduces the available market for iPhone -- it would triple in 2008 if all subscribers were included -- we think it is more realistic to use the smaller subset given iPhone’s higher-end characteristics.
We also expect Apple to continue to drive Mac unit growth 3 times the PC market this year."
Bailey upped his price target for AAPL to $220 from $185 and maintained his Buy rating.
Bailey also added AAPL to Goldman's “Americas Conviction Buy List” to
...capture the catalyst around the 3G iPhone launch next month and the upside potential from sharply higher projected iPhone sales in the back half of the year.”
February 29, 2008
Even with the recent strength in all of Apple’s product lines, there continues to be significant opportunities in all three [of its business] segments. Our estimate [for Macs] is for 25% unit growth in 2008."
Regarding Apple's 10 million iPhone unit sales target:
While we expect those shipments to be more back-loaded, we continue to look for 11 million units for the year. We remain a buyer of Apple shares as Apple has the fundamental and valuation underpinnings which should allow the stock to outperform on an absolute and relative basis longer-term."
January 4, 2008
Although we expect most of the hardware introductions at this year's MacWorld to center on new notebooks and a greater emphasis on software and content for iPods, iPhone, and Apple TV, there will probably be enough hints of what is to come later in the year, including the next generation of the iPhone and the introduction of a sub-notebook, to keep shares in check before Apple reports its holiday-quarter earnings.
At the same time, coming off another strong performance in 2007 with the stock up 133%, we do not think Apple shares will be as explosive in 2008, and upside moves are likely to be more measured."
December 12, 2007
Re iPhone upgrades:
[The next generation iPhone launching in the second half of 2008] is expected to have a similar form factor as the current version although it could have a different look and will probably include 3G capability. A smaller upgrade with more flash memory may come earlier in the year."
Re AppleTV:
Apple will be making changes to AppleTV which could include an LCD display."
October 11, 2007
We would buy Apple shares into year-end as market momentum and earnings upside drive the shares higher.
Better-than-expected component pricing, mostly in DRAM, and a richer mix of Macs on the back of the Adobe CS3 upgrade cycle, should push gross margin to around 32%.
Although details are few at this point, we expect Apple to announce a new model of the iPhone, at least one new iPod and, with lesser conviction on our part, a sub-notebook at MacWorld on January 14.
Goldman Sachs raised its price target to $190 from $165.
August 29, 2007
Coming at least a week ahead of our expectations, the almost certain launch of a new family of iPods next Wednesday, September 5th, creates another opportunity for upside in the back half of the year and provides another reason to own Apple shares.
The product announcement is likely to include a full line-up of revamped iPods with significantly greater functionality at current price points, including the much-anticipated full screen video iPod,
Together, we see the Mac and iPod product cycles as strong enough to generate higher volumes and upside to our current earnings estimates.
As its product cycle story unfolds, we continue to recommend that investors buy Apple shares, especially on company-specific or broader market pullbacks, as new product announcements and higher earnings should keep the stock moving toward our $165 12 month price target."
August 1, 2007
Our supply chain checks suggest that Apple has pulled down its build plan for iPhone.
It's important to bear in mind that what is going on with the supply chain now follows a well-established pattern for Apple that we have seen play out several times already with iPod, in each instance not a good indicator of actual demand
Pullbacks in the stock such as we have been seeing in the last few days are exactly the sorts of buying opportunities that investors should be taking advantage of."
July 26, 2007
In the September quarter, Apple will finish up a refresh of its entire Mac line-up, rounding it out with a redesigned iMac.
Stronger-than-expected retail traffic, a virtually complete revitalization in education, and the impact of Adobe’s CS3 in the commercial space should continue to drive better Mac sales and higher market share. On the iPod side, we’ve changed our view about the level of cannibalization from iPhone based on early indications, particularly from the supply chain, about the much-anticipated full screen video iPod which should be capable of driving an accelerated upgrade cycle."
January 2, 2007
Macworld introduction and a [first quarter] release for the full-screen video iPod which is noticeably more innovative than the current generation and should not be considered as a simple refresh."
Bailey expects Apple to to launch the iTV digital media hub at Macworld. He believes the iTV will help Apple sell more video iPods and generate a new revenue stream.
Apple
announces that the appletv will ship in February 2007.
Regarding the "iPhone" launch in 2Q/2007:
Indeed, Apple is already in early discussion with multiple suppliers regarding next generation models of cell phones with no decisions made yet as to which direction they’re going in.
We are more confident that expectations have come down to more realistic levels for Macworld and earnings, creating an environment where fundamental strength should move the stock higher near term. We think that investors should increase their exposure to Apple shares before these events."
September 11, 2006
After an 11-month hiatus when almost all of Apple's announcements centered around new Intel-based Macs, we expect Apple to begin to revamp its iPod line-up at its September 12 special event with new higher-capacity flash-based models (replacing the nano and shuffle) and potentially a refresh of the video iPod as well."
The
2nd generation iPod nano with aluminum casing is released. Nano capacities remain
at 2GB and 4GB with a new 8GB model that only comes in black. 2nd generation
iPod shuffle is released, which is smaller but has the same 1GB capacity.
The adoption of Apple's movie downloads in the living room is probably gated by the size of the downloads, particularly if Apple begins to offer movies with a higher resolution than what it offers with its TV show downloads today."
Apple
announces movie downloads at the iTunes store and increases the max video resolution
from 320x240 to 640x480. Even though video file sizes have increased, Disney
sells nearly 500,000 movies via Apple's iTunes Store in less than two months.
Carrying less buzz than iPhone, but potentially adding another revenue stream to complement iPods and Macs is Apple's introduction of a digital hub. The company has created a platform for a digital hub with its Front Row software but would need to add a device to connect iTunes to home theaters to further penetrate this segment."
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