Revenue growth will be driven by strength in the iPhone, iTunes, and software segments. Mac units sales will be up (Y/Y), but Mac ASPs will be down resulting in slightly lower Mac revenue (Y/Y). iPod revenue will be down 10% due to lower unit volume and ASPs.
Earnings growth will be driven by the higher sales mix of high-margin products such as iPhones and software.
Disclosure: Long AAPL
good call !
ReplyDeleteI have never pretended to predict the short-term, but I believe Apple's long term is shaping up nicely.
ReplyDeleteEfforts to chase Apple by parroting its retail style can't be taken particularly seriously, because they are founded on a misunderstanding of why Apple's stores work. Apple's high-overhead stores work because Apple is selling high-margin products. Period. Nobody I know succeeds with a grocery store in the highest-cost retail space in a community, but Dell and Microsoft are apparently working to do just that.
Apple's high-margin products mean that Apple's profit share easily eclipses its market share. Your estimates of growing software and other post-hardware-sales revenue reflects something other vendors lack: the ability to continue making money from customers after they walk out the door. Apple has been steadily building an array of applications -- pro apps for thousands, consumer apps bundled free or offered to support hardware sales, with upgrades much cheaper than competitive products -- designed to make Apple's hardware so much more valuable than a PC commodity vendor can offer, that there's little prayer that falling component prices will drive Apple out of the market due to lack of high prices.
By contrast, falling hardware prices will make hardware capable of running Apple's applications so cheap that nobody will consider buying a computer without them.