The financial analysts at Morgan Stanley & Company say that Apple demand is picking up. The question: is there enough product in channel that buyers want?
In a financial report, the company said that, based on recent checks, Apple sell-out for the first calendar quarter (CQ1) is flat to down 5 percent quarter-to-quarter and inventory levels are low. For Apple, demand for professional products has remained steady and the supply has improved, the report said. Apple’s professional product supply has purportedly improved over the past 10 days.
“Based on reseller feedback and a back-of-the-envelope calculation, we believe that Apple will come close to our $1.3 billion revenue target for CQ1,” Morgan Stanley & Company said.
“Based on recent channel checks, the only product which remains highly constrained is the high-end 733 MHz Power Mac with Superdrive (DVD-R / CD-RW),” the report added. “We believe that AAPL [Apple] recently got its PowerBook production facility up to full capacity and that availability for PowerBook components has improved. This is consistent with recent channel checks which indicate that PowerBook backorders at several resellers have been filled over the last several days. Our US reseller contacts reported that PowerBook demand has not fallen off — this is a good sign for Apple. “
However, the firm has a “neutral” rating on Apple ($21.63) because they think investors are going to want more product details this time round and “the company continues to hold its product pipeline close to the vest.”
Apple said they started shipping the Power Mac/733 with Superdrive on Feb 19. However, the financial firm’s channel contacts indicated that to date there has only been about 1,000 units shipped, and few units are expected before the month’s end. Shortly after the Feb 19 announcement, Apple started shipping the 733 MHz Power Mac with CD-RW, a configuration that wasn’t available in the original product line up.
“However, priced at only $200 above a comparably equipped 667 MHz Power Mac, the 733 MHz with CD-RW offers a more compelling value proposition than the 667 MHz model, we believe,” Morgan Stanley & Company said. “Consequently, Apple has not shipped many 667 MHz units, and we would not be surprised to see AAPL stop shipping the 667 MHz machine altogether.”
(Thanks to Andrew M. Horwitz, CFA, Owenoke Capital Management, LLC, for sharing this info with us.)