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Wednesday, June 15, 2005

Apple (APPL) rises today on strong PC forecasts

Apple is up today, as it should be, on news of strong PC sales. Actually, that's a bit of a misnomer as it's actually not PCs that are strong, but notebooks that are selling well. This is better for Apple than the average investor might believe because Apple is the "highest Beta" play on strong notebook sales.
Why? The Apple iPod is successful in boosting laptop sales because iPod users are being drawn to the Apple platform in search of simplicity, style and grace. Once they step inside an Apple store, they're faced with laptops (and desktops) that blow away PCs on the aforementioned dimensions. Microsoft's issues with viruses and spyware have made buyers realize that there is a case to paying a price for a "better" system platform. The last factor is digital media production. If you're a pro or hobbyist, the Mac platform is preferred for a whole bunch of reasons which reduce down to: the Mac platform dominates for Digital Media production.
So, if "PC" sales are stronger than expected, then Apple sales should be much stronger than expected.
The caveat? The announced Intel chip switch has got the loyalists crying foul and newbies who look to this community will likely be scared off by the hysterics surrounding this. I obviously disagree with predictions of armageddon here, but this is political, and politics has nothing to do with rationality.
The kicker? Best Buy announced that mp3 player sales helped drive their killer quarter. Good for iPod sales -- they will likely exceed the Street's determined forecast of a drastic iPod slowdown. Even if Apple doesn't have any more shortages...
This is going to be a bare-knuckled brawl over the next couple of quarters. Keep a close eye on Apple.


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