8 Reasons To Buy Apple Stock Now

Seeking Alpha ^ | March 07, 2008 | by Andy Neff

[jdm]

Bear Stearns analysts Andy Neff, Bill Hand and Ted Chung sent a note to clients this morning following Apple's (AAPL) announcement of a new developers' platform for the iPhone. Key excerpts:

WHY NOW? EIGHT COMPELLING REASONS. Despite current anxiety, we view current weakness in AAPL shares as an opportunity to add to positions based on our assessment of several positive inflection points:

1. WIDgets. With iPhone SDK launch today (3/6), AAPL further extended its lead in the emerging WIDget (Wireless Internet Devices: GPS, email, TV/video, social) market. Making media content portable is a 200mm unit (annual) market; making phones portable is over a 1bn unit market. WIDgets is somewhere in between.

2. VIDEO. Going forward it's not about music: it's about video. All the pieces are falling into place: AppleTV, video content, video rentals. Think non-linearly about an Apple TV-based HDTV.

3. INTERNATIONAL AT INFLECTION POINT. While Apple generates ~60% of sales from Americas, recent unit data points to acceleration in Europe, Japan & Asia.

4. MORE iPHONE MODELS, FEATURES. We expect to see more iPhone models (a la iPod), including 3G along with new features/apps in the coming months.

5. MAC MOMENTUM. With competitively priced products and growing mind share, we see continued momentum in Mac sales.

6. NEW iPOD DEMAND. It's no longer just about music, but it's about video & Internet access.

7. AND IT'S ALL SHIPPING. Three concurrent product cycles: Mac, iPhone, iPods with video coming on.

8. NOT ON HYPE-DRIVEN VALUATION. And the valuation (selling at 14x our CY09 op. EPS or 13x our CY09 cash EPS) is more reasonable.

· SEVERAL RISKS: Consumer spending particularly in the US/Europe (85% of sales). No single catalyst. Business model gets more complex with size. Are they innovating fast enough? Are they innovating too fast? Where are all those iPhones? Can AAPL keep beating expectations?

· NO EST CHANGES. We're maintaining our (reported) GAAP EPS for FY08 of $5.10, for FY09 of $6.50 and for 2Q08 of $1.08 (vs. $0.87).

· MAINTAINING TARGET. Given these multiple catalysts, we're maintaining our CY08 target of $220 using a 29x P/E on CY09 op. EPS plus $24/sh in net cash.

[Porterville]

So, are you signing off your name as twit? OS X is awful... twit? is that your sign-off name?

[Porterville]

“With Macs representing only .00001 per cent of the computing world”

I see why macs are for “artist”... or people who believe themselves to be “artist”

[Leonard210]

Oh please Porterville. As I stated above this was a sarcastic response to your mindless snipe at Mac users. I have counseled both for and against installation of Mac’s and have run into more Windows fanboys and snobs on FR and in my personal life than I have the reverse. You have simply added to that list.

Mac users use Macs because they like Macs. They don’t use Macs because they are artists, musicians, or editors; they use Macs because they like the OS. Can they be a little smug at times? Yes. As can Windows users.

Fact is, most “artists” that I know are Windows users. (I work in the graphics industry - on Win XP.) Starving, goateed, latte swilling artists are most often seen in cafes pounding away on their Dell laptops around here. And this is in no way to disparage starving, goateed, latte swilling artists.

Your problem seems to go deeper than Mac vs PC. Did you have a girlfriend who dumped you for a Mac using artist? You can vent here. We’ll understand. Just be honest. Really. We’re here for you.

[Always Right]

1. Google phone

When can I buy one? Who makes it? Why will it be better than the iPhone?

2. PC are better

Macs are rapidly gaining market share. Windows Vista was a disaster. I can see Apple with 20% market share over the next couple years. Certainly, PC's are here to stay, but Apple will grow faster than any PC maker.

3. Macs are for snobs

What does this have to do with investing.

[MarkL]

Mac users use Macs because they like Macs. They don’t use Macs because they are artists, musicians, or editors; they use Macs because they like the OS. Can they be a little smug at times? Yes. As can Windows users.

Actually, a lot of Mac users use Macs for the simple reason that the Mac is better for their needs than a Wintel PC. My step-mother is a very good example of this. She just bought an iMac, and I flew out to migrate her work from her PC to the new Mac.

The simple fact is that the Mac is simpler for her to deal with. She can do things on the Mac that she was never able to do on the PC. It just makes more sense to her. I would get calls 4 or 5 times a week to help her solve problems that she was having with her PC, but I have yet to hear anything bad from her about the Mac.

Of course, you'll probably say that she should have learned more about the PC. The problem is that some people are just hardwired differently: That attitude is like saying you should "learn" to be a composer. The simple fact is that she's a graphic artist and since moving to the Mac her productivity has increased about 3 fold.

And I was advising her to upgrade to a new, faster PC. I found a nice one with a 20" wide screen monitor for just over $500. But she paid about $1500 for the iMac (with the extended warranty), and she's glad that she spent the additional thousand dollars. It was worth it for her. And, I suspect, for many other Mac users.

BTW, my favorite part about these threads is when people who know NOTHING about what the users' needs are tell them that they should be using something or another! What a hoot!

Mark

[MarkL]

Windows Vista was a disaster.

I was dealing with a new Windows Vista Premium system just last night... Does anyone know how to allow remote printing to a Vista system in a workgroup environment where passwords are NOT required? I couldn't find a local policy editor on the damn system, and mmc didn't have a snap-in. All I've seen so far is the ability to turn printer sharing on or off, and the sharing requires a local account AND password. My friends are setting this system up for their kids and want NO passwords on it. They've got 3 XP systems that they want to be able to have share the printer on this computer.

And please, no "buy an apple" or "upgrade to linux/XP" comments.

Mark

[jmq]

How to make a million with Apple stock? Buy 2 million dollars worth.

[Porterville]

I can’t get past your inability to do math.... so, I just figure you can’t reason either.

[Porterville]

Okay, let’s forget about the third point (though I suspect a strong correlation of Prius owners to Mac users)

There will not be a significant shift to macs because computer-gear heads like cheap modular goods...

Macs are goofy... what is a person to do with an IMac or a Mac Cube?

Most computer-peeps like a wall of motherboards, cpus, heatsinks, and ram... not some small Mac store in the other city 100 miles north of Anytown USA with a limited inventory.

[Porterville]

XP workgroup is pretty straight forward.

You installed the printer software? Is there a privacy option for sharing files on Vista? Vista Premium is Professional? There are different features for each type.

here is a site to check:

http://www.smallbusinesscomputing.com/biztools/article.php/3667576

[Leonard210]

Poorly thought-out evasion my friend. My comment had nothing to do with math, as you well know. You came to pick a fight with Mac users. Why? I’ve been around these threads for eight years as have many others. People don’t just show up on a Mac thread with offensive comments for no reason. They generally have never used a Mac (although they will lie and say they have). Eventually they get what they wanted (revenge for some slight by a previous girlfriend that used a Mac or dumped them for a guy who used a Mac) and they leave. I’m just trying to provide a service Porterville and possibly keep you from many additional years of therapy.

If you don’t tell us about it, we can’t help you. Your shrink isn’t interested in helping. She only wants to keep you coming back. We, however, have no ulterior motive. We do not want your money. We don’t even want to raise your taxes! You have nothing to fear and you didn’t get here by accident. We can help. We have helped many others just like you. We can help you too. But have to start by being honest with yourself and with us.

[Porterville]

I’m sorry, I’m still crunching your math numbers...

Using your numbers: from what I can tell, out of the 6.3 billion people in the world I estimate about 3 or 4 use Macs... that sounds about right.

[Always Right]

I was dealing with a new Windows Vista Premium system just last night... Does anyone know how to allow remote printing to a Vista system in a workgroup environment where passwords are NOT required? I couldn't find a local policy editor on the damn system, and mmc didn't have a snap-in.

I have a Vista laptop and I have no idea how to get it to print to a printer on an XP computer. It sees the computer and even the printer, but won't let me connect to it. Doesn't ask for a password or give me any clue what to do. I really don't know how to do it. No problem printing from an ME/98/XP computers, but Vista, who knows?

[anton]

This is my all time most favorite entertaining topic. Mac v. PC. The fight will never end, but it never ceases to amaze me the brutish remarks made by the proponents of one or the other of these simple appliances. Probably not one in a hundred of us here do anything even remotely challenging to either brand, yet we can swear our allegiances as though national pride or family honor is at stake.

For my part, I strongly prefer Maytag. I'm putting all my cash in their stock and kicking the ass of anyone who dares say that Frigidaire is cheaper or better.

[Leonard210]

Actually, a lot of Mac users use Macs for the simple reason that the Mac is better for their needs than a Wintel PC.

Hi MarkL, that's pretty much what I meant by people use them 'cause they like them. And even though the boxes can be, well...unique in some cases and elegant in others, it isn't about the box. It's about the OS.

Read up on the history of the Mac and you'll see one consistent element...the OS. Most Mac users would abandon Apple as a hardware provider if they could. Apple knows that. So, they tie the Mac OS to the hardware. It is the OS that sells the hardware, not the other way around.

A preference? Yes. Can I do everything on a PC that I can do on a Mac? Yes. I do it every day. But when I buy a new system (maybe this week) it's going to be a Mac. I can tear down a PC and have. Done the same with Macs. I have no problem with PC's nor with PC users in general. I prefer a Mac. Easier? Hardly. Just different.

I have trained several people on the Mac and believe me it ain't easy for some people. It wasn't until I struggled to get some folks to understand even the most basic concepts that I realized that the Mac is only easier for people who want to learn how to use a Mac. That's my two cents.

Oh, and don't worry that your Mom spent an additional grand on that Mac. She will be able to run that system, just as it is, for ten years, probably more. If she decides to get into some of the more high end uses she'll probably have to upgrade after about ten years but only to keep pace in a processor intensive industry.

[Leonard210]

Using your numbers: from what I can tell, out of the 6.3 billion people in the world I estimate about 3 or 4 use Macs... that sounds about right.

So why then do you fear us? Even if you punched in some actual figure, you'd find that Mac users are a small percentage of the computing world. Hardly enough people to warrant your attention, let alone your unquenchable wrath. Whoever she is I can assure you she was not good enough for you. It wasn't that she had a Mac, she was just a jerk. And if she had used a PC she would still have been a jerk. We really do understand.

[coon2000]

I know who you are. I forget your old handle but you are that guy who got banned for flaming the Mac threads. If I recall port, it was determined that you lived at home with your mom. You play world of warcraft and deliver pizza's for a living.

OS X, Solaris, AIX, HP UX.....portly, what do these have in common?

[MarkL]

Thanks for the link. I manage a network with well over 200 servers, and nearly 3000 workstations, and I can’t figure out how to share a printer on a Vista workstation with 3 XP systems! I’ll check it out later.

Mark

[MarkL]

There will not be a significant shift to macs because computer-gear heads like cheap modular goods...

Macs are goofy... what is a person to do with an IMac or a Mac Cube?

Most computer-peeps like a wall of motherboards, cpus, heatsinks, and ram... not some small Mac store in the other city 100 miles north of Anytown USA with a limited inventory.

I'm a hardware geek (servers) and love networks (cisco routers as well). But you should remember that the vast majority of computers sold are sold to businesses. The company I used to support would order computers in batches of 300 at a time. And it's those users who need to get a job done, not "play with computers." Sure, I've got 13 computers at home, though I've since started virtualizing things, and I'm currently only using 3 systems. I love playing with the things. But most people just want to do their work and go home at the end of the day. If the computer helps them get the job done, then it's a good thing. If it gets in the way, it's a hinderence.

Mark

[Porterville]

Hey, leave my mom out of this.... I’m king of the world i tell you king of the world....

But if I did live with my mom and weighed 500 pounds... I’d still play Warcraft on a PC... except, I don’t like Warcraft...