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Apple Inc. is fast becoming the apple of analysts eyes.

Following the breaking news of Apple's 67 percent growth, UBS Investment Research is predicting big things for Apple in 2008.

UBS is counting on the so-called "halo-effect" to continue to drive Apple's sales. The "halo-effect", now in "halo 2," started with "halo 1" which referred to the increase in Apple's PC sales following the wild success of the early iPod.  Now after the release of the iPhone, Apple has entered into "halo 2" mode, where its iPhone and its iPod are driving each other's sales and driving sales of Apple computers.

UBS cited these effects as a major reason for Apple's torrid last quarter.  UBS analyst Ben Reitzes raised the outlook on Apple's stock to a hot $220.  Ben elaborates:

We continue to believe Apple is in the process of creating another version of the 'multiplier effect,' which we call 'Halo 2'.  Apple’s fiscal 4Q results show that the build up to the launch of the iPhone and its ongoing excitement is driving sales of accessories, boosting retail traffic, and helping drive sales of iPods and especially Macs. As a result, we believe shares can continue to move higher into Macworld [Expo] in January.

Apple's success in its fourth quarter was chronicled at DailyTech.  It included PC sales jumping 10 percent over predictions, making Apple currently the third largest home PC maker behind Dell and Compaq.  iPhone sales was also high despite less than flattering media coverage of various developments with Apple.

The only slightly disappointing fact for Apple was while their iPods sold well, they were slightly below the last quarter's sales.  UBS feels this only a temporary thing and is predicting strong iPod sales over the holiday season, driven by the new iPod lineup.

UBS cites that other factors which will drive strong holiday sales included the new Mac OS X Leopard, the recently updated iMac, and European iPhone.

UBS also speculated at some new possibilities that may be coming from Apple:  an ultraportable device, similar to the old Apple Newton; gaming initiatives to bring gaming to Macs; and an iTunes video rental service.

Still more significantly, UBS believes Apple will release a significant expansion to the iPhone in the next few months and that the iPhone will see a springtime refresh.

If true this would keep the "halo-effect" going strong. While UBS refused to provide any specific details, it did say this, "We expect Apple to make an announcement on additional international iPhone carriers in the coming months, and our contacts in the supply chain point toward a new iPhone model to be released by March."

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iPhone to iPod?
By lukasbradley on 10/26/2007 10:17:42 AM , Rating: 4
I can understand the "halo effect" of iPod sales boosting Mac sales, but I don't understand the iPhone to iPod boost. If the iPhone is a fully functioning MP3 player, why would its owners suddenly purchase more iPods?

If iPhone use supplants (albeit barely) iPod usage, shouldn't we expect the sales of Macs to remain on course, instead of another explosion?




RE: iPhone to iPod?
By Lonyo on 10/26/2007 10:39:06 AM , Rating: 4
Might be a marketing thing.
"Hey our iPods are awesome, now we have a phone too, and you want a new phone, so buy one of ours!" So iPod owners buy an iPhone.
The iPhone is everywhere on the news, people thing "oh, that's cool, but I don't need a phone", so they buy an iPod instead.

Or you could look at most Apple fanboys as being sheeple who need an ipod and an iphone as well as a new mac every year. :P


RE: iPhone to iPod?
By T4RTER S4UCE on 10/26/2007 11:53:44 AM , Rating: 1
Sheeple?... I get tired of every one insulting everyone else due to their belief in something else.


RE: iPhone to iPod?
By gramboh on 10/26/2007 1:03:34 PM , Rating: 2
Sorry, but Apple zealots are the one group that really deserve it. Note that these are not people who use a Mac because of software requirements or OSX, but those that think having an Apple is cool and a status symbol. Walk into any coffee shop/lounge with wifi and you will see tons of these. Especially in Vancouver.


RE: iPhone to iPod?
By tayhimself on 10/26/2007 2:51:41 PM , Rating: 3
It can't possibly be because the Apple computers happen to look good, are quiet and easy to set up and use? Design and usability is important to some people, but hey I use Linux and Windows XP so...


RE: iPhone to iPod?
By Mil on 10/26/2007 3:51:28 PM , Rating: 3
I think you're confusing Apple zealots with Canadians. I always see tons of Canadians when I drop into a Starbucks in Vancouver. :)


RE: iPhone to iPod?
By Adonlude on 10/26/2007 3:58:56 PM , Rating: 2
quote:
Sheeple?... I get tired of every one insulting everyone else due to their belief in something else.

Uh oh, here comes the PC police.


RE: iPhone to iPod?
By robinthakur on 10/29/2007 1:24:50 PM , Rating: 2
This is true, while I'm waiting for the iPhone to come out in England (i've resisted buying an unlocked one up until now!) I picked up an iPod touch and am bowled over by how beautiful and smooth the interface and design is on the device as well as the convenience of smooth fast web browsing over wifi. Out of the people I've shown it to 3 have cursed me loudly as they felt compelled to buy one too. ;) the iPod Touch is an iPhone lite pretty much.

Whilst my main machine has always been my home-built vista pc's, I've also owned macbook Pros and virtually all the iPods. Those that seem to permanently whine on whenever Apple is doing well, are misunderstanding something. Apple is successful for a reason, just as Microsoft is. Its strength currently lies in making uniquely styled and designed products with sleek lines and smooth interfaces and marketing them well, positioned as aspirational lifestyle items. The problem is that most of you here are impressed only by horsepower, whereas Apple consider all aspects of a product's appeal to the general public who like great modern design and are willing to pay for it. The great thing about imacs/iPod's/Macbooks is that they've introduced members of the general public to computers/mp3 platers etc. who otherwise would be scared off of the subject by the kind of blinkered, hating fanbois who post here. Apple make great products, that's why they do well.


The Apple bubble will pop soon
By mcnabney on 10/26/2007 11:37:15 AM , Rating: 2
Although there is a significant number of investors that own Apple because they own their products, most fund and institutional investors know that the stock price has no relation to reality.
Currently their market cap is about $161 billion with a P/E of 47. Non-emotional investors will be selling soon because they know that the earnings will never support the stock price.
I'm also looking at you Google.




RE: The Apple bubble will pop soon
By ChipDude on 10/26/2007 12:14:27 PM , Rating: 2
For slow growth companies P/E is an important metric. For growth companies take a look at 2010 that is what investors are pricing

I think you should ask yourself in 2010 what Apple profits be?

How about the 10-20 million iPHONE that Apple will collect double digit subscription fees each month. Lets assume 10 bucks a month that is 120 bucks a year and that means 1-2 billion a year. How about a few more iPhone variants in 2008 that are as big a hit as NANO. I can easily see a schenario where Apple dominates the high end and fashion phone business like they did the PC business.

How about say 12-15% total PC market share at their current total market growth rates of 5%. That means Apple growth in PCs will be double the other folks.

Its a risk many investors are worth betting on.

In Apple you are investing in Job's ability to navigate the next bit thing

In Google you are investing in the Gooplex ability to moneytize all the information on the internet.

Both have been and continue to look like good bets.

Now what really a bubble? Lets talk about HK and Shanghai


RE: The Apple bubble will pop soon
By lukasbradley on 10/26/2007 3:19:42 PM , Rating: 2
quote:
In Apple you are investing in Job's ability to navigate the next bit thing


Does anyone remember NeXT computers? What was done had merit, but it wasn't a commercial success.

The man is human, and will make mistakes. Not everything he touches turns to gold.


RE: The Apple bubble will pop soon
By Scott66 on 10/26/2007 10:09:59 PM , Rating: 2
Steve was a wee distracted regarding the NeXT as he was busy with a little company called Pixar. While the computer did not sell that well, the graphical interface and 3-D modeling developed for the NeXT went on to much better projects. Pixar made Jobs one of the largest shareholders in Disney and created a virtual integration with itunes, imovies and Disney that has been jealously admired by other media companies.


RE: The Apple bubble will pop soon
By Scott66 on 10/26/2007 10:21:52 PM , Rating: 2
please replace virtual with vertical


RE: The Apple bubble will pop soon
By lukasbradley on 10/26/2007 3:16:07 PM , Rating: 2
I *almost* posted the same PE comparison in the market vertical yesterday, but was afraid I would get slammed as a hater. Nice catch.


RE: The Apple bubble will pop soon
By ChipDude on 10/28/2007 6:47:46 PM , Rating: 2
Yup watch these stocks go POP too with incredible PEs

Amazon at 103
Chipotle at 80
Broadcom at 116
Celgene at 178
ebay at 307
google at a very low 52
Hansens at 62
Sunpower at 592

It find it funny how PE gets thrown around then there are a ton of stocks that go up with high PEs and others that dive with very low PEs. Anybody who throws PE without any larger prospective is just a blood fool who missed the obvious runup. Just like CROC, UA or other obvious homeruns stocks.


A bit off topic
By Locutus465 on 10/26/2007 10:23:33 AM , Rating: 2
But wow... Like "halo effect" as a marketing term... You know you have a hugely successful video game when all of the sudden you find it so engrained in popular culter that it gets used by anyalists to generally describe a products effect on a companies bottom line...




RE: A bit off topic
By tjcioffe on 10/26/2007 10:27:20 AM , Rating: 2
halo effect has been an established marketing term for years, and has nothing to do with MSoft's game. it has to do with the physical appearance of a halo. =)

link: wikipedia (http://en.wikipedia.org/wiki/Halo_effect)


RE: A bit off topic
By Locutus465 on 10/26/2007 10:35:34 AM , Rating: 2
Ah, I guess that is now why I'm in marketing :)


RE: A bit off topic
By Mil on 10/26/2007 4:02:21 PM , Rating: 2
HALO has been an established military procedure for decades, and has nothing to do with marketing or MSoft's game. It has to do with the fast and stealthy insertion of personnel and equipment. ;)

link: wikipedia (http://en.wikipedia.org/wiki/HALO)


I love me some Compaq
By Daven on 10/26/2007 11:52:54 AM , Rating: 3
quote:
making Apple currently the third largest home PC maker behind Dell and Compaq.


????

When was this article written? Compaq? Lol!




RE: I love me some Compaq
By T4RTER S4UCE on 10/26/2007 11:56:42 AM , Rating: 2
Doesn't he mean HP?


RE: I love me some Compaq
By daftrok on 10/26/2007 1:10:01 PM , Rating: 2
Technically HP and Compaq are one in the same so it isn't an error REALLY, but yeah he meant HP.


I'll never understand it.
By Domicinator on 10/26/2007 8:20:45 PM , Rating: 2
I'll never cease to be amazed at how crazy people get over Apple products. I was at a school today, and the principal was practically jumping up and down in his office as the mail lady walked up to the building because she was delivering his copy of OSX Leopard. I almost barfed from his excitement. It took everything I had to not say to him, "Yeah, PC users get updates like that too. They're called Service Packs and they're FREE, you IDIOT!!!!" I don't remember the last time I had to pay $100 for a Service Pack.

Actually, I do understand this phenomenon, and I've said it before. People get talked into trying a Mac. They turn it on, it boots up, it works, and they think it's the greatest. Usually these are people who know nothing about computers, so they get all excited just because they figured out how to turn the stupid machine on. After that, they don't care that they're limited to the software and hardware that Steve Jobs deems worthy of them to use. They don't care that Apples crash just as much as PCs. They don't care that they just paid a really unreasonable premium for a shiny piece of plastic. They just care that they found the power button.

It carries over to the iPhone and the iPod. People don't care that a free RAZR has more functionality than an iPhone. They don't care that there are other WAY better MP3 players out there that DON'T require proprietary software and AREN'T loaded with DRM. They don't care that you have to send your product into Apple just to get a simple battery replaced. Heck, an Apple customer service rep will most likely tell them to just go buy a new iPhone or iPod, and they'll probably go and do it with a big stupid grin on their face.

Steve Jobs is not perfect. He is not god. His products are not infallible. In fact, they are far from it. The key is his advertising. I met an Apple user a few weeks ago who actually thought that only Macs could burn CDs and DVDs. That's how clueless people are. As soon as they hear, "Hi, I'm a Mac. And I'm a PC." on the TV, they are ready to be fed the next line of BS. It blows my mind.

And I HATE that Apple targets older users. Have you ever seen an old man's face (aka my grandfather) when you tell him that since file recovery is damn near impossible on Mac OS once something gets corrupted, he's going to have to reinstall his operating system? Terrific. Try walking him through that on the phone. And since you access everything on a Mac directly from the program file list, it's SO easy to corrupt something.

Macs do not "just work". They have their problems just like anything else. So in the end, all you have is a very locked down version of a PC running a gimpy OS and encased in shiny plastic. There, I said it. Let the flaming begin.




RE: I'll never understand it.
By clnee55 on 10/27/2007 11:31:09 AM , Rating: 2
quote:
I'll never cease to be amazed at how crazy people get over Apple products.


Try a vitamin a day , it might help.

quote:
Usually these are people who know nothing about computers, so they get all excited just because they figured out how to turn the stupid machine on.


90% of the population don't know anything abour computer. The stupid machine makes them more productive. That is pretty smart machine. But I admire your intelligence of figuring out how to turn down the volume after turning on the machine

quote:
After that, they don't care that they're limited to the software and hardware that Steve Jobs deems worthy of them to use.


Again 90% population don't need all the software.

quote:
Steve Jobs is not perfect. He is not god. His products are not infallible.


His product only bring Apple from 1% to 8% market share

quote:
I met an Apple user a few weeks ago who actually thought that only Macs could burn CDs and DVDs.
in the last 2 years.

I met 3 PC users last weeks who actually thought that only PC can explore the internet. What does that prove? Nothing.

quote:
Macs do not "just work". They have their problems just like anything else. So in the end, all you have is a very locked down version of a PC running a gimpy OS and encased in shiny plastic.


Again 90% population do not down load all the junk software on the internet. That's why it works and that's all 90% people care. They don't need to search for the solution when their download has a virus in it.


By crystal clear on 10/27/2007 2:18:43 AM , Rating: 2
quote:
UBS also speculated at some new possibilities that may be coming from Apple: an ultraportable device, similar to the old Apple Newton;.............and our contacts in the supply chain point toward a new iPhone model to be released by March."


I did not need an Analyst report/comment when I posted this comment below-
(as uusual it gets voted down by ignorant fools)

Does Apple have something on its drawing boards ?
By crystal clear on 10/18/07, Rating: 1
By crystal clear on 10/18/2007 1:52:41 PM , Rating: 1

The i.... roadmap-

The iPod, which emerged first as nothing more than a portable music player grew up to become a music and video device in adolescence and is now "iPod touch" a semi-full-featured Internet tablet device.

The iPod touch grows into a The Mac OS X Leopard-based mobile minitablet PC will be 1.5 times the size of an iPhone.

It's inevitable that Apple will ship a tablet Mac that works like the iPhone & more.

As usual they will call it something with the i before it...... i Tablet .

A Mac mini mini+iPod+iPhone+OS X all put together making it a i Tablet.

There you have hot product to take on Nokia & others.

The UMPC/MID market is set for a huge growth & Apple wants to take a sizeable share of the market with something unique like the i Tablet....

Does Apple have something of tablet Mac on its drawing boards ?



http://www.dailytech.com/Article.aspx?newsid=9318&...

Voting me down-doesnt bother me a bit rather gives me an excellent opportunity to hit back in future.
By responding I told you earlier about this-by reposting that comment again.




By crystal clear on 10/27/2007 2:45:12 AM , Rating: 2
In fact this article itself comes from my earlier post-

what is selling those Macs ...
By crystal clear on 10/24/07, Rating: 2
By crystal clear on 10/24/2007 4:07:18 AM , Rating: 2

(Some portions I quote here in this post)

the possible answer-
Peripherals are selling the PCs at Apple,

"It is primarily [the] 'halo effect' driving the jump in Mac sales," said Van Baker, a research vice president at Gartner in San Jose, Calif., that is mainly "realized in the Apple stores," he added. "Consumers come in to buy an iPod and stop to check out the MacBook Pros while they are there."

"Apple continues to gain ground in the PC market and more and more people are drawn into the Apple stores due to their interest in iPods and iPhones," agreed Tim Bajarin, the president of Creative Strategies, based in Campbell, Calif.



http://www.dailytech.com/Apple+Profits+Soar+67+As+...


By UlricT on 10/27/2007 10:41:44 AM , Rating: 2
The next "Halo" event for apple will be when apple buys bungie just to spite microsoft and brings out a game console (or tweaks the appleTV enough to play games) that hooks into the iPod ecosystem.

...this has the added benefit of giving EA the finger for underdelivering!




outlook no Outlook
By glennpratt on 10/27/2007 3:56:21 PM , Rating: 2
I was hoping Outlook for the iPhone in 2008. Like Exchange support. Oh well.




By crystal clear on 10/28/2007 5:29:19 AM , Rating: 2
Apple says NO CASH PLEASE only C.C. &...

Apple Limits Sale of iPhones: Two Per Person and No Cash

SAN JOSE, Calif., Oct. 26 (AP) — Apple no longer accepts cash for iPhone purchases and now limits sales of the cellphone to two per person in a move to stop people from reselling them.

The new policy started Thursday, said Natalie Kerris, an Apple spokeswoman. Before then, there was no cash restriction and the purchase limit was five per person.

“Customer response to the iPhone has been off the charts, and limiting iPhone sales to two per customer helps us ensure that there are enough iPhones for people who are shopping for themselves or buying a gift,” Ms. Kerris said. “We’re requiring a credit or debit card for payment to discourage unauthorized resellers.”

More than 1.4 million units of the hybrid cellphone-iPod have been sold since it was introduced June 29, according to Apple. It is expected to be a popular gift for the holidays.

Apple says it thinks some people have already purchased multiple iPhones to resell, including those looking to modify, or unlock, the phones so they work on networks other than Apple’s carrier partner in the United States, AT&T.

Apple estimated that buyers of 250,000 of the iPhones sold so far intended to unlock them, Apple’s chief operating officer, Timothy D. Cook, said in a conference call with analysts this week.

Apple’s attempts to prevent that unlocking activity, which included a software update that blocked the workarounds that hackers had developed, have frustrated users and prompted two lawsuits.



http://www.nytimes.com/2007/10/27/technology/27app...




By crystal clear on 10/28/2007 6:25:59 AM , Rating: 2
Now you will know why Apple wants its iPhone LOCKED !

Read below the why & how & howmuch

Apple doesn’t chat too much about the iPhone service fees AT&T shares with it. But the good folks at the Financial Accounting Standards Board (who make rules for how companies keep their books) have forced it to give us some clues.

The accountants say that if someone promises to pay you money in the future (as AT&T does for each iPhone activated), you have to report this “deferred revenue” to investors.

All this makes Apple’s financial statement into a rather complex algebra problem. Gene Munster, an analyst at Piper Jaffray, has tried to do the math.

His bottom line is rather shocking: AT&T appears to be paying $18 a month, on average, to Apple for each iPhone activated on its network.
That adds up to $432 over a two year contract.
In other words, Apple will receive $831 for each iPhone it sells. (It’s a little less for iPhones sold in AT&T stores.)
He can’t tell, of course, what makes up that average. Apple may, for example, receive higher payments for customers new to AT&T or those who buy more expensive monthly plans.

Mr. Munster says he was surprised by the numbers. He previously had estimated that Apple received $6.50 a month from AT&T. A carrier will typically subsidize the price of a high-end phone by about $200, he says. With the iPhone, AT&T is spreading the payments out over time, but ultimately putting up twice the typical amount.

The numbers will be harder to figure out from here on out, because Apple has started selling iPhones in Europe, where it has presumably different arrangements with carriers in Britain, Germany and France. But Mr. Munster says he figures the payments from them will be at least as much as from AT&T. And that certainly is consistent with reports that Apple has been demanding as much as 40 percent of the monthly fees from European carriers.

Still to Mr. Munster, this is incredibly bullish news for Apple investors. The higher revenue, of course, compounds Mr. Munster’s already optimistic view of the IPhones sales prospects. He figures Apple will sell a total of 3.4 million iPhones this year, 12.9 million next year and 45 million in 2009. The boom, he suggests, will come from increased features such as navigation and faster data speeds, as well as a lower price. He figures the average price of the iPhone, now $399 in this country, will drop to $300 in two years.

Mr. Munster assumes that the payments from carriers will then fall to $9 a month. As a result of this analysis, his estimate of Apple’s 2009 revenue increases from $36.2 billion to $42.8 billion. And the company’s net income per share increased by 14 percent.

The bottom line: Mr. Munster’s target price for Apple’s stock, which today sells for around $184, goes to $250. (He had it pegged at $220).

All this shows how much incentive Apple has to maintain its exclusive deal with AT&T rather than to sell unlocked phones or cut deals with multiple carriers. AT&T is finding that an exclusive on the iPhone draws in new customers and lures existing ones to buy more expensive data plans.

Carriers will keep paying Apple big kickbacks so long as its phones still stand out from the pack.

http://bits.blogs.nytimes.com/2007/10/25/the-831-i...

Now you know it all-why they want them LOCKED.




Vista released too early.
By Mitch101 on 10/26/07, Rating: -1
RE: Vista released too early.
By T4RTER S4UCE on 10/26/2007 11:58:41 AM , Rating: 1
It took Microsoft like six years to "rush" it out to stores...


RE: Vista released too early.
By SavagePotato on 10/26/2007 5:59:37 PM , Rating: 1
Comparing Vista to ME is just as laughable every time it is said. It demonstrates a clear lack of knowledge regarding the subject.

Me was little more than a poorly reworked version of 98, and 98 was nothing to write home about itself. Vista was a ground up redesign. Taking that into account it has been an incredibly smooth introduction of the OS. In addition 90% of the bad press that Vista receives is based on exaggeration and assumptions.

It isn't going anywhere, and it really does work just fine. The thing people fail to realize about apple, is that they are designing their OS for a product line of a handfull of different computer specs. They have total control of the hardware side of things. Microsoft just is expected to make everything work for everyone.

64 bit as well is a fact of life. It isn't maybe going to happen, it HAS to happen. If it doesn't happen progress is officially over as computers are stuck at 3 gb of ram for the rest of time. That just isn't reality, 64 bit is, people seem to have one hell of a time accepting it, but they will nonetheless. There isn't an option to stay stuck in the past never exceeding the limits of the 32 bit OS.


RE: Vista released too early.
By Scott66 on 10/26/2007 9:58:49 PM , Rating: 2
Everything is expected to work with Microsoft Vista. If a printer sold does not work with Vista, It is the fault of the printer maker. They have to make the drivers to Microsoft's design. To top it off Microsoft charges the third party to become Microsoft "certified". That is why many video drivers cause the message warning that they are not certified and Microsoft is not responsible if the computer crashes. Video drivers change so often they can't afford the certification fee or the time it takes to become certified.

Apple has fully supported 64bit with all its '08 applications. There are a few third party programs that don't, most notably Microsoft Office 2004, but no problem Apple supports both natively with no speed hits. Unfortunately Microsoft though has not released an updated Universal version of Office for the Mac forcing users to use Rosetta to run on the newest intel machines. It just makes the bloated program run slower.


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