Saturday, December 8, 2012

Apple: WWDC a ‘Platform War,’ Says Evercore; JMP Sizes Macs’ Advantages

The Street continues to prep itself for Apple‘s (AAPL) Worldwide Developer Conference, which kicks off on Monday morning in San Francisco with the keynote session.

The details of these reports are in accord with what are now widely held rumors, such as the notion that there will be an announcement of new Mac computers, especially the “MacBook Pro” models, Apple’s higher-end laptop offering. There’s also a common expectation that the next version of the Apple’s “Mac OS X” for those computers, dubbed “Mountain Lion,” will include some of the capabilities of Apple’s iPhone operating system, iOS. And Apple may unveil a set of mapping applications to displace Google‘s (GOOG) Maps program on iPhone and the iPad and iPod Touch, it’s expected.

Last certain is the prospect that there will be some hints of an Apple television set, perhaps in the form of updates to the software for the existing set-top “Apple TV” product.

Rob Cihra of Evercore Partners, who has an Overweight rating on shares of Apple and a $750 price target, puts the discussion as one of “Platform War,” and on that score he tries to reach a combined share of computing platforms for Apple’s traditional computers and mobile operating system, iOS.

With deepening inter-OS and iCloud integration ahead of OS X Mountain Lion this summer, we calculate iOS+Mac OS growing to 21% of all �platform� market share in CY12, up from just 11% in CY09 vs. Android and Windows each 35%.

Cihra thinks that way of looking at things given we are in a “thin-client world,” referring to lighter-weight computing devices. (The computing ability, not the actual weight of the devices.)

Cihra took the opportunity to also trim his iPhone estimate for the current quarter (fiscal Q3) to 28.8 million units, down from 31 million previously, citing that “sell-thru looks solid but sell-in starts cycling down ahead of the sixth-gen refresh.”

And JMP”s Alex Gauna, who has a Market Perform rating on Apple shares, opining that the competition is going to have a hard time matching Apple’s offerings anytime soon:

Our assessment from the recent E3, Computex, and Cableshow trade shows is that no single entity, nor consortium of players, has put together anything that Apple isn’t capable of outdoing with its 2H12 refreshes of iPhones, iPads, Macs, and new media devices (iPods, Apple TV, AirPlay) [�]

Specifically, Gauna observes that despite APple still not being in the top five ranking of global notebook sales, the camp banking on Microsoft‘s (MSFT) Windows to drive notebook sales hasn’t yet matched the appeal of the Mac:

Greater touch friendliness [on Mac computers], more attractive form factors and battery life that leverage increasingly affordable NAND technology, and updated iOS, iTunes, iCloud, and AirPlay ecosystem plays all represent low-hanging innovation potential that we could readily envision incorporating into new Macs. Even though Windows 8 is coming with some of these enhancements of its own, from what we could see at the Computex trade show the competition hasn’t yet put together a value proposition with the same singular appeal of the Macs.

Gauna raised his EPS estimate for this year to $55.50 from $53.50 to reflect what he sees as more favorable pricing for Apple on NAND flash memory chips.

Apple shares today are up $1.38, or a quarter of a percent, at $573.10.

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