Apple Conference Call
October 23rd, 2007Apple has reported great results for their quarter ending this September (Q4 in their FY).
Even in a post-Reg FD world, some journalists get the quarterly results before the call. Today’s call began after 2 pm PST (after 5 pm EST, more than an hour after the Nasdaq’s normal trading day closed), but the Wall Street Journal story on Apple’s quarter was posted about 15 minutes before the call began.
I own a few shares of Apple, so I’m delighted with these results.
I expect Apple’s strong results to continue. Barring some general economic meltdown, there should be more upside because, inter alia, 1) They’ll have strong holiday sales, especially of the new lineup of iPods. 2) We’ll see continued ramp up in iPhone sales as they begin selling iPhones in Germany and the UK next month, with roll out in Asia and other European countries still ahead. 3) A new version of the Mac OS will be released this Friday, which will drive some incremental revenue, plus 4) Macs are gaining share (reversing a long-time trend of dwindling market share for Macs), partly as a spillover or halo effect from the popularity of iPods and iPhones.
Besides selling more Macs, iPods and iPhones as those devices currently exist (along with lots of music downloads), I imagine we’ll eventually see a larger iPhone-like mobile device, something like the Nokia N800 or what Microsoft may have originally imagined Origami (UMPCs) as being. If so, I know I’ll want one of those.
On the other hand, certainly there is potential downside—there could be an unforeseen product recall, a new competitive product, loss of market share in online music sales (to the new Amazon initiative, or more loss of contracts with the music companies whose content populates the iTunes Music Store), leftover problems from the options backdating mess or even a virulent Apple-specific virus. Most of the upside may already be priced in, too.
But it seems less probable to me that these risks will materialize than the upside factors will. I’m staying long.
The market seems to agree; the shares are trading above $187 from the close of $174. Some of that noise may die down by tomorrow, but the $200 targets some analysts have put on the stock don’t seem at all far fetched.