I chose the most well reasoned of these posts to respond to. As of noon today AAPL is trading at about 37.5; I expect it to close on 40 with the next two weeks. I do not expect to see a whole lot of action in the stock until mid-late October in anticipation and immediately following Apple's quarterly announcements. Generally, I expect the stock to rise slightly (43?) in moderate to heavy trading. However, this will depend on whether or not there are any major revelations (+ or -) made by apple at that time. Regardless, expect Apple to pick up 2 or three points (from whatever baseline is established at the end of Oct.) slowly until December. Christmas sales are worth about 5 Points (+ or -).
Apple's long term strategic plan will start to bear fruit in 1996 (this was the main reasons Microsoft released an OS this summer that they plan to discontinue support for in 1997 -- A preemptive strike at the consumer pocket book). If Apple can ramp up production from its suppliers and deliver its OS on schedule then by the end of 1996 most major hardware providers will be selling computers with the Mac OS (commitments have already been obtained from IBM, Compaq, Dell, Panasonic, Olivetti, Radius, PowerComputing, and Daystar). Hardware manufacturers have been enthusiastically embracing the Macintosh OS since they have seen the results of studies that indicate they can reduce over 60% of there RMAs (Returned Merchandise Accepted) simply by offering the Mac OS instead of Windows or OS/2. Gateway has made formal inquiries to sell the Mac OS as well but has been refused until Apple can guarantee that they will not suffer from part shortages spawned from these new channels.
Microsoft has made its play. IBM will make its bid in this game in January with it's Micro Kernel release of OS/2 (but they are already hedging their bets by signing a contract with Apple). After January the ball will be squarely in Apple's court. They have historically had trouble with supply and distribution. Watch to see whether Apple straightened up its supply channels and delivers its updates on time. If it does expect a record year for Apple in FY 96, if not look for a buy out. In either case don't expect Apple's stock price to fall much below 40 in the coming year.
Paul, there has historically been a discrepancy of about 10 points between perceived value and calculated value with Apple stocks. Much of this is generated by Wall Street analysts that treat the PC market as a commodity and therefore see Apple as a "non-standard". One of my greatest concerns about this industry (which I dearly love) is the percentage of people involved in it who do not have even a passable understanding of it (read the majority of the posts in this thread). This tends to make the market much more reactionary and perception driven than most other markets. Something to keep in mind while investing.
Nobody who is in this industry and understands it takes Apple technology lightly. The US patent office referred to the Macintosh OS as the "Crown Jewels of the entire computer industry". John Dvorak wrote an article last year entitled "Microsoft's agenda" in which he stated that their Primary goal is to make sure people did not discover the Macintosh. They have been successful at this largely because a huge share of the industry was willingly complicit having nothing to gain by supporting Apple. This is changing.
Microsoft has illustrated again and again the power of its marketing and legal divisions, but has yet to deliver quality product. IBM is scaling up for a full assault on Microsoft in '96 by offering a better OS than Windows NT or '95, with better backwards compatibility, that will run on the PowerPC line of processors as well as the Intel line. Apple started to make it's OS available to other vendors in 1994 since then their Mac OS division has become their fastest growing division and one of their most profitable. By 1997 Most major hardware vendors will offer the Mac OS for their platform.
Also, lets not forget about the Apple/IBM alliance. Both of these companies are still on target with their plans to make their respective OSs binary compatible by mid '97. Thus IBM will be offering an OS that has native backwards compatibility with windows, DOS and older OS/2 applications, while Apple will continue to offer the most elegant and integrated OS in the world, but to developers the Mac OS OS/2 world will be one seamless community.
I'm offering no predictions on who is going to win this war but, hopefully, I've given some perspective on where the game stands and what the stakes are.
Kevin |
