Applevine: Mac Sales Ahead of Projections? Subscription iTunes?
Apple’s broken sales records in many of their recent quarters including the last but when forecasts were given for the current quarter, Apple was particularly conservative. Citing a “product transition” widely believed to involve Macbook notebooks, the company forecast only a Q4 earnings result of $1 per share on sales of $7.8b. Analysts were looking for $1.24 a share on sales of $8.3b. Midway through the quarter, some analysts are now starting to set out projections that turn Apple’s conservatism upside down.
The investment banking division at the Royal Bank of Canada sent a note to investors saying the quarter ending in September (Q4) could boast a tally of 3.04m units sold. That would represent a new record for the fourth quarter and a 44% year over gain. (22 percent sequential growth)
RBC Analyst Mike Abramsky built his model around proprietary data that involved a survey of 4,400 people. Reportedly, a staggering 34 percent of the respondents were intending to buy a Mac notebook within 90 days. Another 30 percent indicated interest in desktops.
Many of the respondents appear to be motivated in part by Apple’s back to school promotion. The company is currently offering a $299 rebate toward an iPod Touch (effectively a free MP3 player) for customers buying a qualifying Mac system by September 15th.
Based on his sales rate projections, Abramsky is predicting Apple’s global PC share will rise to 4.2 percent in 2009 from 2.9 percent in 2007. He projects each 25 basis point gain will equal near 15 cents a share in earnings.
Considering the Mac accounted for 61% of Apple’s total revenue in Q3, if Abramsky is on track, many watchers may end up adjusting their targets for the company.
(Note: In Q3 the Mac accounted for 61 percent of Apple’s total revenue. Apple shipped 2,496,000 Macs, a 41% unit increase and 43% revenue increase year over year. Sequentially the company was up 9% over the prior quarter in total units sold. Breaking out the categories: desktops accounted for 943k of the total. Laptops accounted for 1,553,000. Desktop unit growth was up 49% year over year while portables were up 37%.)
In other news from the Applevine…
A rumor about a subscription music service from Apple is starting to make the rounds. Started apparently from an anonymous tip sent to multiple Apple-centric news outlets, the whistle-blower is claiming Apple is set to launch a US-based music subscription service by late October. The offering will cost about $129.99 per year (less if you subscribe to the iPhone Mobile Me service – either as part of a bundle or as an existing subscriber).
According to the rumor, the music will be available in a subscription-encrypted (e.g. time coded) 256kbs files. Approximately 50% of the iTunes library would be available at launch.
The service, in theory, would be offered to support the growing legions of iPhone and iPod touch users who are able to “connect” with their devices on an easy, consistent basis.
Apple, as is course, said they “don’t comment on rumors and speculation.”
So is there any truth here? …. I’d lean toward guessing NO and quote Steve Jobs directly on the subject (from a report in May 2007). He said: "Never say never, but customers don’t seem to be interested in it. The subscription model has failed so far."
Like many rumors, rumors of iTunes subscriptions have swirled and circled for a long time. Sources as respected as the Financial Times have reported on it. Last March, in fact, the FT reported Apple was in discussions with the Big 4 music labels to bring just such a service. The rumor at that point was that an “all you can eat” pricing model would be bundled into the price of the iPod mp3 player itself. So far, there’s been nothing to suggest that earlier report was on the right track.
One thing is certain, someone definitely wants this bit of rumor out there and has made an effort to circulate it widely. An organized tip-campaign has to raise suspicions. Who the anonymous tipster is, and if they have a reliable inside story remains to be seen.
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