To: Don Green who wrote (44117 ) 4/14/2005 12:55:35 PM From: Jeff Hayden Respond to Try to imagine the level disappointment in Apple's inner circles. macnn.com "clearly gaining share in a PC market showing little dollar growth." The iPod is bringing new to the platform, " benefiting not only Mac sales but also peripherals and software." Investors "need to stand back and consider whether Apple has created a pattern of introducing creative products to a consumer hungry for easy-to-use technology." Apple could be "building a sustainable consumer franchise ... iPod and now Mac success has been underestimated by the market." Yesterday, when asked about Apple's "consumer franchise," Apple CFO Peter Oppenheimer said, "I don't think Apple could ever be out of ideas." "We believe the halo effect is the primary driver of upside to Mac units. We expect the halo effect to accelerate in 2005 as the total installed base of iPods increases." The firm estimates the number of iPod users to reach 35 million by the end of calendar 2005, up from 10 million at the end of 2004. "iPod unit sales were 5.3 million for the quarter, we had been modeling for 3.8 million total units." (Earlier today, Merrill Lynch said it felt there was now "quantitative proof of the halo effect.")
