- Bank of America notes that while consumer worries stalk stocks in firm's coverage, they wanted to ring in with some positive comments on Apple (NASDAQ:AAPL), which they believe support their Buy thesis. In the last 3 months, Apple is +4.2%, while the NASDAQ is down 2.7%. Given Apple's strong product portfolio, the firm thinks Apple's stock can continue to do well.
BAC believes that Apple will introduce a new notebook, with flash based storage in 2H07. Turn on time will be shorter (with flash), and they imagine the form factor will be thinner, than existing notebooks. They do not believe the capacity point has been concluded, but guess will end up around ~30GB.
Similarly, they believe that Apple will introduce a new iPod video with flash based storage in 2H07, that will add to the existing family of hard drive storage based iPod videos. Finally, they have 5 million handsets in their CY07 model, and believe that their estimates could prove conservative.
Apple's flash based products have implications for the hard drive industry. The 1.8 inch drives or smaller (that go into iPods) is about 5% of total industry drive shipments, and notebooks are about 25% of total drive shipments, with notebooks growing about 2x the market growth. However, the firm believes that the ultra portable notebook market (target for flash based notebooks) is only about ~2% of total drive units (or about 6%-7% of total notebooks). Moreover, they have a hard time believing that the notebook market will significantly shift to ~ 30GB flash capacity, since Vista requires ~15GB (Apple's Tiger requires 2GB - 4GB). Firm believes that flash based Vista notebooks would be best suited for business travels that use the network as primary storage.
BAC stays Neutral on both STX and WDC.
Notablecalls: Nothing really new here. A new ultra thin laptop from Apple would of course be another monster seller.
BAC believes that Apple will introduce a new notebook, with flash based storage in 2H07. Turn on time will be shorter (with flash), and they imagine the form factor will be thinner, than existing notebooks. They do not believe the capacity point has been concluded, but guess will end up around ~30GB.
Similarly, they believe that Apple will introduce a new iPod video with flash based storage in 2H07, that will add to the existing family of hard drive storage based iPod videos. Finally, they have 5 million handsets in their CY07 model, and believe that their estimates could prove conservative.
Apple's flash based products have implications for the hard drive industry. The 1.8 inch drives or smaller (that go into iPods) is about 5% of total industry drive shipments, and notebooks are about 25% of total drive shipments, with notebooks growing about 2x the market growth. However, the firm believes that the ultra portable notebook market (target for flash based notebooks) is only about ~2% of total drive units (or about 6%-7% of total notebooks). Moreover, they have a hard time believing that the notebook market will significantly shift to ~ 30GB flash capacity, since Vista requires ~15GB (Apple's Tiger requires 2GB - 4GB). Firm believes that flash based Vista notebooks would be best suited for business travels that use the network as primary storage.
BAC stays Neutral on both STX and WDC.
Notablecalls: Nothing really new here. A new ultra thin laptop from Apple would of course be another monster seller.
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