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Led by MIT engineers and Wall Street analysts, helps you understand how a company's products, that you touch, read, or hear about everyday, impact its stock price. Surprisingly, the founders of Trefis discovered that along with most other people they just did not understand even the... More
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  • Apple Earnings: Trefis price updated from $191 to $214, 5% upside to $204 market price  0 comments
    Oct 23, 2009 1:32 PM | about stocks: AAPL
    Apple reported its fiscal year Q4 earnings earlier this week.  We've updated our analysis of Apple, available on, based on Apple's results.  Below is a summary of the key changes we made to our interactive analysis.  In addition, we now show you how downloads of paid iPhone Apps impact the company's stock.

    Summary of Trefis Price Update for Apple:
    • iPhone Market Share forecast increased because of better than expected iPhone sales.  We now expect 13.0% share by the end of the Trefis forecast instead of 10.9%. (Positive Impact)
    • Notebooks Market Share forecast increased because of on-going better than expected Mac sales.  We now expect Apple to have about 10% market share in notebooks and 6% share in desktops by the end of the Trefis forecast period, up from our previous forecasts of about 7% and 4% respectively. (Positive Impact)
    • Portable Media Player Market forecast reduced due to evidence of continued decline in iPod unit sales.  We now expect unit shipments of portable media players worldwide (which includes iPod competitors) to decline from a peak of 200 million in 2008 to fewer than 100 million by the end of the Trefis forecast period.  As a result of these changes, iPod constitutes only slightly more than 2% of the Trefis price estimate for Apple (Negative Impact)

    You can find additional details on Apple's earnings and the Trefis price update here (scroll down to comments section)

    iPhone Apps

    In addition to updating Apple for earnings, we now show additional detail on the impact of iPhone software applications on Apple's stock.  Within the iTunes & iPhone Apps division, you can view our forecast for the Average Paid iPhone App Pricing, Number of iPhone Apps Downloaded and the Paid App %.  Currently, about 4% of all apps downloaded are paid with the remainder being free.  In some cases, free apps generate money for their creator (usually not Apple) through advertising but paid apps are oftentimes more profitable.  Based on this, we expect the Paid App % to increase; however the Average Paid iPhone App Pricing is likely to decline as the number of iPhones in use increases since developers will be more likely to profit from higher sales at lower price points.  App developers make pricing decisions and share a percentage of the revenues generated, currently 30%, with Apple.

    Within Apple's content, you can see how changes in the Paid App % and Average Paid iPhone App Pricing would impact Apple's stock.

    Disclosure: No positions
    Stocks: AAPL
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