Monday, December 11, 2006

Calls of Note Part 1

- Piper Jaffray comments on Apple (NASDAQ:AAPL) after speaking to 20 Apple specialist over the last several days:

With 3 weeks left in the quarter, 60% of the resellers in firm's checks are anticipating Dec-06 Mac units will be up from Sep-06. Piper is modeling for Mac units to fall 1% q/q in Dec-06. . If Mac sales grew 5% q/q in Dec-06 vs. firm's currently modeled down 1%, we estimate it would add $0.03-$0.04 to $0.73 EPS estimate.

Apple's VARs indicated that iPod supply has been somewhat patchy in the Dec-06 quarter, while Mac supply has been very solid. Specifically, 75% of specialist stores said that they have had good supply of iPods, while 95% said they have had good supply of Macs in the quarter. Those that were missing iPods were typically missing the shuffle or the nano. iPod shuffles were scarce over the last several weeks, but 85% of Apple specialist stores in our sample said they now have it in

On average, the 20 Apple VARs said that ~25% of customers buying Macs are new-to-Mac and they expect this number will keep rising due to the iPod halo effect and Boot Camp. Apple stated on its last quarterly call that over 50% of customers that bought Macs in Apple retail stores in the Sep-06 quarter were new-to-Mac. Apple specialist stores have a lower new-to-Mac average given they typically serve more of the professional users and existing Mac faithful customer base. The firm sees, therefore, the 25% new-to-Mac number at these stores as a fairly high number.

Maintains Outperform and $99 tgt.

Notablecalls: Not actionable but good to know category. Looks like Dec qtr will be an OK one. Still, considering how leveraged AAPL is to iPod story I continue to cautious on the stock.

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