Gene Munster on Apple: Gene Munster, managing director and senior research analyst at Piper Jaffray, recently sat down with CNBC during its “Squawk on the Street” segment to discuss Apple Inc. (NASDAQ:AAPL). More specifically, he addressed what 2013 may hold in store for the tech giant.
To see the video in its entirety, visit this link.
After speaking with Sascha Segan, PC Magazine Mobile Lead Analyst, Munster had the chance to discuss his thoughts on Apple Inc. (NASDAQ:AAPL) in the new year.
Segan starts the segment by talking about Apple changing its cadence from one product a year to two products a year, speeding up its product portfolio to counter companies such as Samsung.
While this is a great way to “push products out the door” there are obvious concerns, prompting the host to mention the following:
After six months or so, that is when you start getting savings in terms of volume for many new products, so if they start shortening these cycles you wont ever get that scale you had with past products.
Here is Munster’s reply to this potential change:
That is a fair concern. I would say if you look at the Street estimates for margin, they are at 42% for 2013 and 45% for the last cycle. In some ways, their guidance that they gave about gross margins would anticipate exactly what you talked about [mentioned above] – would this faster pace have a negative impact on margins?
Later in the interview, Munster had the chance to talk about his price target on Apple Inc. (NASDAQ:AAPL) when asked if $900 as a target and a 63% upside “keeps him up at night”:
When you look at 63%, that is a big gap between where we are at now and I realize that is a big gap. But if you look at the numbers and what is coming in 2013 I am not concerned about that price target. The reason is this: we are at 20%+ earnings growth for the next three years…and we have the new TV sometime later this year which should be positive too. You may think as 63% as a big number, but when you start stepping through the math it’s not that big of a jump.
Of course, any discussion about an Apple Inc. (NASDAQ:AAPL) TV being released is sure to call for a follow-up. When asked about his confidence of an Apple TV hitting the market in 2013, here is what he had to say:
We are pretty confident, and I would say if you were to put a percentage probability on it we would say there is an 85% chance it happens by the end of this year, and a 100% chance that it is going to be in the next two years.
What are your thoughts on the latest comments from Gene Munster? Do you believe that Apple Inc. (NASDAQ:AAPL) will have a full-size television on the market by the end of the year?
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