Apple: Back to school blues?
some analysts expressed concern about demand for Macs. During a conference call Wednesday, UBS analyst Ben Reitzes said he did not understand why revenue guidance was flat compared to the fiscal third quarter since the fourth quarter is typically stronger due to increased demand for computers in the back-to-school shopping season.
Bill Fearnley, Jr., an analyst with FTN Midwest Securities, said that he believes Apple is just being cautious with its outlook and that ultimately, back-to-school Mac sales shouldn't see a hit because of concerns about the switch to Intel.
"A student that's going to school in September and needs a computer can't wait until next spring to buy a machine," he said.
As for the iPod, Apple was quick to dismiss some fears in the market about weakening demand for iPods. Oppenheimer said during the conference call that inventories for the iPod were within the company's target range at the end of the quarter.
Still, Keith Bachman, an analyst with Banc of America Securities questioned the company about whether or not pricing would become tougher in the MP3 music player market.
Several competitors have entered the market with lower-priced offerings and Apple has also begun to sell cheaper versions of the device, most notably the iPod Shuffle, which uses flash memory chips as opposed to a hard drive to store music.
To that end, even though the number of iPod's sold in the third quarter was 16 percent higher than the second quarter, the dollar amount of iPod revenue increased just 9 percent during the quarter. The company would not comment about future pricing trends in the music player market.
But as long as Apple continues to report strong iPod sales, investors don't appear to mind any concerns about the Mac business. After all, revenue from the iPod and other music-related businesses, such as Apple's iTunes music store, now account for 38 percent of Apple's total sales, up from just 16 percent a year ago.
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