Also, and very importantly, we think there is a high likelihood that management significantly lowers its earnings per share outlook during its analyst meeting this week, well below the current 1.28 Street consensus.
More Quotes from Steve Fortuna:
Apple is, in many ways, a market unto itself, ... We believe there is a high likelihood that investors will overreact to this news and take down the PC names in sympathy. We would particularly view this as a buying opportunity for Gateway, and to a lesser extent, Compaq and Dell.Steve Fortuna
IDC saw worldwide unit growth in 3Q of roughly 18.3 percent, while Dataquest saw worldwide unit growth around 15.2 percent. Averaging the two together puts it in the mid-to-high 16 percent range, which is roughly in line with our forecast 17 percent for 3Q.
Steve Fortuna
Apple has a lack of any real new products to drive strong year-over-year unit growth. Its existing products are getting stale.
Steve Fortuna
We see the upgrade cycle as clearly fatiguing at this point and I think the experience in consumer slowdown and weakness, as is with Gateway and others, but Apple's got some additional problems that are more Apple-specific and are related to the fact that a lot of the growth coming from the installed base is now drying up and the company really has to reinvent itself now and focus on new products,
Steve Fortuna
We do not see this as a one-quarter phenomenon for Apple, but rather as the beginning of many tough quarters ahead.
Steve Fortuna
We see revenue growth accelerating to almost 16 percent in the second half, helping to drive operating margin expansion from the 4.5 percent recorded in first quarter 2000, and the 5.4 percent that we expect this quarter, to 6.3 percent and 8.2 percent in the third and fourth quarters respectively.
Steve Fortuna
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