Apple has said “it doesn’t do cheap,” but one analyst reckons that Steve Jobs & Co. will address the netbook market at some point–either with an 11-inch MacBook Air priced between $800 and $1,000 in 2009 or a tablet Mac in 2010.
That’s one of the more notable takeaways from a research note by Piper Jaffray’s Gene Munster. He examines 12 questions surrounding Apple’s quarter. On the netbook issue, Munster notes that “Apple could find success with a product in its lineup between the iPhone and the MacBook.” He did note that the iPhone accomplishes much of what a netbook is used for–Web browsing–but could use another multi-touch device. Jason Perlow has noted the same thing and as a netbook novice I’d vote for the Mac tablet.
Among Munster’s other questions:
How’s Apple’s business? Munster says he believes that the current quarter is in line with Wall Street estimates. MacBooks and Macs appear to be selling well. He is predicting Mac units between 2.5 million and 2.7 million units. However, iPod growth is slowing and that offsets Mac momentum.
How’s Apple managing the downturn? Munster says Apple is most likely working component costs based on daily sales reports from its retail stores and channel partners. That approach means that Apple is tightly managing inventory since it has little visibility. A separate question from Munster focused on gross margins–the analyst is predicting 31 percent gross margins in fiscal 2009, up from Apple’s guidance of 30 percent.
How are MacBooks selling? Munster says:
We believe the new aluminum MacBooks ($1,299) are selling well. While we do not believe sales are exceeding Apple’s own internal estimates, as the stores have had ample supply throughout the launch, we now believe the Mac unit number for the Dec. quarter may exceed our and Street expectations of 2.6m. We note that the new product will likely lift Mac ASP’s (average selling prices); during our in-store checks we found that the new aluminum models (priced $200 higher at the entry point than the previous white plastic MacBook model) are vastly more popular than the newly priced white plastic model ($999). We caution that our in-store checks do not reflect the direct sales to the Education market where the $999 model is likely finding more success.
What’s Apple’s iPhone gross margin? Munster reckons that the average selling price of the iPhone from Apple to carriers is $630, but the company should be able to lower that price by about $150 over the next six months, but maintain margins. Bottom line: iPhone gross margins are in the high 30 percent to low 40 percent range.
And how’s the iPhone international rollout going? Munster says the iPhone international rollout is in the early stages. Munster writes:
According to our checks on the iPhone international website, availability will grow from a subscriber base of about 660m subs in 44 countries in late Aug. to about 989m subs in 73 countries by the end of the year. This represents 50% growth in addressable subscribers ahead of or during the holiday quarter.
The other wild card for the iPhone is China. Munster predicts that Apple will launch the iPhone with two China carriers in 2009–most likely China Mobile and China Unicom.
Will the iPhone be a gift this year? Munster writes:
Due to changes in the activation process (in-store instead of at home), the iPhone 3G is more difficult to purchase as a gift. AT&T offers gift cards for the iPhone 3G and voice and data plans, but a simple gift card is not as exciting as the phone itself. To solve this, it would make sense if Apple follows AT&T footsteps and offers an iPhone 3G gift cards this holiday season. If this is successful, we see it as a positive for shares of Apple given most investors are not expecting a strong holiday period for the iPhone.
Will there be a new iPhone? Most likely. Munster says it’s likely that Apple will launch a cheaper iPhone at $199 or so and then keep a premium model that tops the $299 16GB iPhone. Munster notes: “Apple could lower the price by removing features like 3G and GPS; alternatively, Apple could make a premium SKU with a sleeker design using higher-end materials, more processing power, better graphics and more storage.”
Is iPod growth over? Munster says growth in the iPod business “is clearly under pressure” and in fiscal 2009 units will decline 12 percent.
How many retail stores will Apple open? Apple opened 50 in fiscal 2008, but Munster reckons there will be 20 to 30 stores opened in fiscal 2009. Why? The economy and Apple is saturating top tier malls already.
