Analysts have shine for Apple

Bajarin's optimistic take on the once-beleaguered company was echoed by other financial analysts after Apple Computer Inc. (aapl) announced stronger-than-expected financial results on Wednesday. Professional Apple-watchers lauded the company's successes with Mac newcomers and pro users alike during the quarter, which ended April 1.

Bajarin said Apple's second-quarter profit of $233 million -- including $73 million in after-tax income from the sale of 1.5 million shares of ARM Holdings PLC -- was "very healthy," but "what we look at is growth in general." And Bajarin said he saw no disappointments there, either: Every indicator in Apple's financials saw a 20 percent to 30 percent growth over the same quarter last year.

"What we're most impressed with are the new users" attracted to the Mac platform, Bajarin said, quoting Apple Chief Financial Officer Fred Anderson's statistics that 28 percent of iMac buyers were first-time computer buyers and 17 percent were "converts" from Windows-based PCs. "It's not just the same customers buying the same products over and over."

Company (aapl) Bajarin also lauded the "phenomenal" increase in Apple's margins. That Apple could increase its average unit margins to 28.2 percent, up from 26.3 percent a year ago, was significant, he said, especially since other manufacturers have seen their margins shrinking over the course of the past year.

Bajarin agreed with Anderson's upbeat expectations for the upcoming quarter: "Internet content, such as youth sites and sites like ThirdAge.com, are driving PC sales, and Apple is perfectly situated to take advantage of this."

David Bailey, a research analyst for New York-based Gerard Klauer Mattison, also painted a rosy picture for Apple.

Bailey said he was particularly interested that Apple's professional line of desktop Power Mac G4s and PowerBook laptops constituted such a large part of the company's total sales for the past quarter. Bailey said this strong demand (about 100,000 PowerBooks and 350,000 G4s, according to Anderson) led to higher average selling prices for Apple's entire line. "This ends a common worry among PC vendors about declining ASP," he said.

Bailey said these numbers should ease worries that Apple is focusing on the consumer market to the detriment of its professional users. "Apple is doing a good job reaching consumers with the iMacs," he said, but he pointed out that a majority of Apple's profits come from the sales of professional-level systems.

Addressing Apple's announced two-for-one stock split, Bailey said that such a move is "very common among tech stocks," even though Apple has not enacted a split since 1987.

"It's a strong signal that the company feels positive of the results and of how the company is going forward," he said.

Bailey also is sanguine about Apple's next quarter. "This next quarter will be the start of the K-12 education purchasing season," he said, so the quarter should see a resultant increase in iBook and iMac sales. Bailey said Apple's Worldwide Developers Conference, in May, should provide news of Mac OS X, Apple's forthcoming, next-generation operating system, giving another kick to Apple's stock. Furthermore, he said, this summer's planned release of that OS should bring nothing but good news for the company.

"Everything seems to be working well for Apple," he said.