"I simply don't like Apple and want them to falter, and here are some [incredibly vapid] reasons that I think they might."

I mean, c'mon... NAND prices fall and so Apple's overall margin should increase? Yathink maybe there might be more to the equation than NAND prices, Renck?

And he goes against his peers when they say a full, successful Intel transition is assumed, but than goes with them when they predict lower iPod numbers.

But the most inane statement is saved for last, with the monopoly barb. It's such an ill-informed, thoughtless comment that it is truly shocking to hear from someone who calls themselves analytical. Articles like this make all analysts look like buffoons.

"... is Apple on its way to becoming the very monopoly for which it assailed Microsoft?"

God I hope so. But at least they earned it through fair competition and real innovation.

"With the "closed system" nature of iTunes, which makes it hard for current Apple customers to switch to competing products,"

Why would they switch?

A "monopoly" in the US, at least, is a legal term. Microsoft was (probably still is) an "illegal monopoly" because a federal court declared that it is. Their "market share" of PC OS installations is a teensy bit more than Apple's. Look at it this way: Non-Windows PCs make up maybe 6% of the PC market. Non-Apple music players make up maybe 25-30% of the market. That's a 4- or 5-to-1 ratio of "competitiveness." On top of that, Microsoft was found to be an illegal monopoly because it had used illegal tactics (intimidation, kickbacks, etc.) to attain that position. It actively sought to undermine other companies, including Netscape. Apple's attitude, on the other hand, has been rather like Dubya's infamous statement, "Bring 'em on!"

People are just fickle about AAPL. Look at how the Boot Camp announcement jumped the price from $60 to $70, then it has crept back down to high 50s. And those of us who follow the Apple market knew about Parallels and the difference between a boot manager and virtualization. When the market gets that excited about news blown out of proportion and perspective, it's time to short the stock.

Apple's high market share in iPod space is good. Apple needs to defend it. However, it has nowhere to go but down over the long term, and it appears that the frantic growth of the MP3 player market is slowing. Gone are the days of doubling units quarter over quarter because the market isn't growing that fast! Feature-wise, what else can Apple do? My video iPod is cool, but the video only gets used to hook up to a friend's TV or perhaps in a training setting I can envision. The form factor for handheld video is less iPod and more UMPC, while the price point is the other way around. That new Vaio UMPC would be perfect, except that it's $1800.

Apple's market share in PCs is horrible. If advertising can fix that, we should see significant gains in September. The "I'm a Mac" ad is ubiquitous now. I'm not so bullish on it having much of an effect, just as I doubted the "halo" effect. Apple will only increase marketshare by licensing the Mac OS to other manufacturers. The problem there is that most plans would cannibalize Apple's computer sales. So market share gains would kill revenues. The $60 license fee would replace the $1500 computer.

But a way around that would be to license the Mac OS for niche designs. Apple keeps the Mini, the iMac, MacBooks, and MacBook Pros. Apple may even keep a base tower and XServe. Apple licenses Mac OS for form factors like UMPC or bigger Tablet PC. Or perhaps Apple licenses Mac OS lite (sans iLife) for competing boxes, with an a la carte upgrade path. I don't doubt that the market is envious of and would love Mac OS X, especially now with all the uncertainty about Vista. But the segment of us willing to pay a premium for Apple hardware design and quality is BMW-ish at best. It's never gonna grow in the computer business. AAPL has to figure that out to ever get out of this high 50 range.

Quote

Bosco wrote:
Gone are the days of doubling units quarter over quarter because the market isn't growing that fast!

Those days were always few and far between but they are not gone AFAIK. Apple doubled its sales from the previous quarter on several occasions, this normally happens during fiscal Q1, the October-December quarter, aka the holiday buying season. The launch of the 4G iPod in july 2004 allowed them to double their sales during the July-September quarter, but this is the only occurrence.

- Q1 2004: 730,000 (118% sequential units growth)
- Q4 2004: 2 million (134% sequential units growth)
- Q1 2005: 4.58 million (127% sequential units growth)
- Q1 2006: 14.04 million (118% sequential units growth)

To summarize: a doubling of iPod sales will only occur during the holidays or after the launch of a new generation.

Note that Q1 2006 was a very strong quarter because the iPod nano was announced in September and the video iPod in October, just in time for the holiday buying season. New models + holidays = amazing sales numbers.

Normally sales will at least stabilize after the holidays but this time Apple sold 8.52 million iPods during Q2 2006, the sharp sequential decline left business analysts underwhelmed, but on the other hand in two quarters iPod sales have already topped sales for the whole of last year, indisputable proof that the iPod market is still growing fast.

- Fiscal 2005 iPod sales: 22.49 million units
- Q1+Q2 2006: 22.56 million units

Analysts are currently forecasting about 7 or 8 million units for Q3 (April-June quarter), if it turns out to be accurate and if Apple is again selling 8 million units during Q4 (July-September) due to the lack of new iPods, then total iPod sales for fiscal 2006 will approach 40 million nonetheless.

Mac Observer reported that according to analyst Shaw Wu new iPods will likely see delays. Wu is quoted to say: "For the new nanos, we now anticipate the December quarter as more likely... On the widescreen vPod, we are picking up that battery life continues to be the key gating factor that could delay its release until 1H07 from Q4."

I think Apple will do well if at least one of those rumored new iPods is ready before the next holiday buying season.