New consumer confidence seen as boon to Apple
Bolstered by renewed optimism about the U.S. economy, consumers this spring are putting money aside to buy netbooks and Mac laptops, according to a report released Thursday by ChangeWave Research.
The ChangeWave survey of 3,231 high-end consumers was taken in April and showed a 2 point jump in plans to buy a laptop in the next three months — the first uptick in this number recorded by ChangeWave in 17 months.
Nearly of quarter — 23% — of those who planned to buy a laptop said they had their eye on a netbook. That's mostly good news for HP (HPQ), Asus and Acer — companies that sell loads bare-bones laptops in the $400 to $600 price range.
But when asked whose computer they planned to buy, a surprisingly high 29% specified Apple (AAPL) — a purveyor of high-end laptops — down a point from a February survey, but up a point from January.
"The economy is finally starting to move in Apple's direction," said ChangeWave research director Paul Carton in a conference call to discuss the results.
Joining him was RBC Capital analyst Mike Abramsky, who reversed his position on Apple last week and raised his price target dramatically, from $95 a share to $165.
"This tide will help lift Mac's growth," said Abramsky. "The Mac franchise is not dead — in fact, it's likely to rebound."
The challenge for Apple, he says, will be to address the shift toward the low end of the market, either by introducing new products or cutting prices, while preserving its "premium proposition" — the perception among Apple loyalists that while you pay more for a Mac, you get what you pay for.
Addressing the smartphone market, where Apple's share among ChangeWave members continues to grow, Abramsky predicts that Apple will introduce a "pro" version of the iPhone at its World Wide Developers Conference in June as well as a price cut on the current model.
Apple will not introduce a "nano" iPhone this year, he said, despite reports that a low-end phone was coming. But he added that "next year we know that's in the pipeline" mostly for pre-pay markets (low-cost or free) in Asia, Eastern Europe and Russia.
As for that $95-a-share target — and a $70 target that preceded it in January — he admits that it was a mistake. "We were wrong in that valuation call," he says.
He explained that he was worried in January about three things: slowing Mac sales, shrinking margins and Steve Jobs' health.
Mac sales did slow, but margins held up, and he's less worried about Steve Jobs today given "concrete signs" that Apple's CEO remains involved in planning future products.
Apple closed at $125.8 a share Thursday, up more than half a percentage point for the day.
Below the fold: a ChangeWave chart of consumer purchase plans for Macs going back to 2006 and a second chart comparing those numbers with actual Mac sales (as reported by Apple) to show how closely they track.
See also:
From the ChangeWave Alliance Web site:
ChangeWave runs a proprietary research network of 20,000 highly qualified business, technology, and medical professionals — as well as early adopter consumers — who spend their everyday lives on the frontline of technological change. (link)
Yep, he certainly deserves credit for admitting a mistake – others being completely off track (Huberty anyone?) prefer to disappear. But, even more important, he seems to be a lot closer to "getting" Apple now. While I do not know if his predictions will be spot-on, they are certainly very reasonable and do finally take into account how Apple works and what they aim for. Quite an improvement.
With all the hype that's out there, it's tough to recognize the real deal when it comes along. People are finally beginning to recognize that Apple's the real deal, and revaluing its stock accordingly.
You know, when the Titanic went down, it pulled a lot of stuff down with it, even things that float. But eventually the Titanic hits bottom, and then you can tell the floaters from the sinkers.
Apple's a floater.
I give Abramsky credit for correcting his notions when faced with hard data. I read a lot of 'analysts' who draw their conclusions 1st and then pick their data.
Abramsky has seen Apple as a risky proposition till now and kudos for his change of mind.
Abramsky needs to get out more if he thinks the 'Mac Franchise' was in any threat of decline in the past 3 years or so. It's on a completely obvious upward trajectory to anyone who's paying attention. Microsoft, for one, has noticed, hence their latest targeted ads. This guy is a pro? Wow, that's amazing.
It's not all about finance, nickels and dimes. Try looking at the technology itself, to see where it's going.
RBC Capital analyst Mike Abramsky, does not work for you. He is trying to get us to sell stock when RBC wants to buy it and now he wants us to buy it back from RBC after the stock has climbed to a temporary peak. Don't get sucked in again if you missed the bull rally. The institutional buying is ended and they expect us to buy it as it goes down to around $105