Tuesday, July 31, 2007

Hey Look, Corn is on Sale

Man, my iPhone has been ringing off the hook all morning. Now I know people don't listen to the conference calls! Let me sum it up for you: New products coming. This will of course require changes at the factories, etc.

Anyway, you know I don't give investment advice here, but I just wanted to say that this morning I was at the grocery store and corn was on sale so I WAS BUYING WITH BOTH HANDS.


iPod Can Be the Razor or the Blade, I Don't Care

Today Steve released the news that the iTunes Store just crossed the three billion mark in tune downloads. They crossed two billion in January, and 2.5 billion at the end of April. Forrester, is that a hockey stick or are you n00bs just happy to see me?

There has been much discussion about which (iPod/iTunes Store) is the razor and which is the blade. Well, the iTunes Store is neither, so as far as I'm concerned the iPod can be both.

The iTunes Store is the Apple Digital Hub.

Yep, I know that the ADH was Steve's idea for the Mac being the center of our digital universe. But think about it: Now we have iPods, iPhones, Apple TVs, Macs. Lots of ways to deal with what?


It's the media that's holding everything together for Apple. And all roads lead to the iTunes Store. It's at the center, it's the glue that bonds the entire experience. And currently that sucker is raking in over five million bucks a day, and growing.

So forget about the razor and the blade. It's old news. Apple has moved on to power shavers, and the iTunes Store is the power.

Monday, July 30, 2007

Sorry Reitzes, but You're a Poser

"We believe investors should focus on Apple being in the process of creating another version of the 'multiplier effect,' which we call 'Halo 2,'" Reitzes said. "We believe the build up to the launch of the iPhone and its ongoing excitement is driving sales of accessories, boosting retail traffic, and helping drive sales of iPods and especially Macs."

You're kidding me, right? Halo 2? C'mon dude you really need to do your own work, which includes coming up with cool investor catch phrases. Everyone associates The iPod Halo Effect with yours truly. Go ahead and google it with my name included. See? 

But you knew that. What a poser.

Look, I congratulate you on getting your price target out of the gutter (though it's still way low) and for recognizing that The iPhone is a Game Changer.©

Please note the copyright above. No one uses Game Changer when talking about Apple products except me. Nor Game Changer 2© when the cheaper iPhone comes out next year.

Sunday, July 29, 2007

OK Seriously: Who the Heck is Elmer Fud(d) DeWhitt?

It all started on July 20th when this obscure blogger dude decides to attach himself firmly to my coattails. No one, and I mean no one has heard of this guy, so he decides to stir things up by questioning the way we release our research at PJ.

Strike one, Elmer Fud.

Then he shows up here on my blog to try and keep his name out there. 

Strike two.

Well then his lucky day arrives when a reporter for the Star Tribune sees what he's up to and decides to throw some more fud on the fire. (Note to Strib editor: not a good move for the ol' credibility score). 

Strike three Fud-ster.

Funny how in the midst of his fud-slinging he never talked about my track record of price targets. Now why would he want to avoid that? Or the Halo Effect... heard of it?

Well anyway, hope you enjoyed the fifteen minutes Elmer Fud, cause they just ran out.


Saturday, July 28, 2007


New iMac rumblings are getting awfully loud.

I think there's another reason (besides Hollywood deals) that Steve has been keeping Apple TV on the down-low. If I'm right.... oh brother I'm starting to like this new partnering era.

Congrats to my peers that stepped up their aapl targets this week. I'm proud of you. Pretty soon someone might even join me by crossing over the two hundo mark. C'mon, I know at least one of you has the moxie.

Friday, July 27, 2007

Flight to Quality

The Dow drops over 3 hundo and aapl hits an all time high.

If that's not giving the market the finger, I don't know what it is.

Fasten your seat belts folks, looks like another bumpy ride today, but I'm sure there will be others who want to get aboard the aapl train.

P.S. Peter's secretary sent me a $15 iTunes gift card. I called Peter, we chatted. All is well.

Thursday, July 26, 2007

Batting Clean Up On YourMacLife

Shawn called me yesterday and asked if I would come on the Your Mac Life Show. He said he was having Pete Cohen on and he wanted me to come on afterwards and "hit it out of the park."

Happy to oblige Shawn. Sorry about cutting you off... it was Oppenheimer apologizing.. I told him I'd call him back... maybe.

Hey n00bs!

For those of you phoning in your upgrades, you can have my $205, I'm going to $211.

You have your offices in your fav list on your iPhones, right?

UPOD on the iPhone

So I'm looking over our channel checks, and I figure Apple is really close to already having sold iPhone number one million. Really really close. Steve must have been ticked that it wasn't in the can for yesterday.

But this is why he's so successful. Rather than say "we'll be selling our millionth iPhone within the next few days" they give themselves the rest of the quarter. This creates a little speculation, but it's worth it, because now they can give the over-deliver announcement whenever they see fit. And you can bet it will be at just the right moment.

Flippin' brilliant.

Peter, I've forgiven you for blowing me off on the CC yesterday. I got to the office and had so many voicemails from happy investors it just made all the hurt melt away. n00b analysts should really try putting some targets out there that are above the share price. It really is worth it to do your job well.

Wednesday, July 25, 2007

Rating the Ratings

OK, here's how I rate these ratings....

Source Date Rating Target Price My Rating
Soleil Securities Group 7/16/07 Buy $175 Coaster
Am. Tech. Research 7/2/07 Buy $165 Phoner
RBC Capital Markets 7/24/07 Outperform $160 Phoner
UBS 6/12/07 Buy $160 Chump
Bear Stearns 7/12/07 Outperform $143 Chump
Credit Suisse 7/2/07 Outperform $140 Chump
JMP Securities 7/23/07 Mkt Outperform $125 n00b
WR Hambrecht + Co 5/30/07 Buy $125 n00b
Prudential Financial 5/25/07 Overweight $125 n00b
Bernstein Research 5/21/07 Market Perform $100 Ultra n00b

Coaster: One who coasts instead of working
Phoner: One who "phones it in"
Chump: Chump
n00b: n00b
Ultra... you get the idea

Apple stops giving guidance

Yep. That's what happened today. Papa Peter's guidance was so absurd we're officially not paying attention to it. A bunch of us were texting each other during the CC and agreed. Basically we're insulted.

Not too happy with the way Tim and Peter treated me during the call either. Basically gave me squat. Who took a stand for you dudes last week? Where's the love?


King for a day (well, four)

Steve may be the king of Apple, but four times a year someone gets to be King for a Day.

As far as Wall Street is concerned, Papa Peter is the man this afternoon. He is the master of UPOD (under promise, over deliver), and we analysts are used to his shtick. The question on everyone's mind is how close he'll be to our collective guidance for next quarter. Just a little advice Peter... don't go under it. Make life easier for all of us.

Well anyway Peter, get your crown ready, today's your day. I'm getting my questions prepared this morning, and they're gonna have the usual mix of "praise and probe" as I like to say.

Check me out on the CC everyone!

"Our next question comes from Gene Munster at Piper Jaffray....."

Tuesday, July 24, 2007

AT&T, get your crap together

Had to eat a little crow this morning. And not because I was wrong about the weekend sales. AT&T had a huge bottleneck in their activations. Took them DAYS to get it sorted out. But you can't claim what you didn't activate, so their number flat out sucks for close of business on the 30th.

Now of course I have to go on cnbc and explain this crap. Easier to say AT&T's news was disappointing than get into the specifics. Pete will give the real number tomorrow... well, sort of. He's not going to give the entire weekend... just the 29th and 30th.

But enough about me. If some of you investors out there were looking for a chance to add, you may have just gotten it.

Monday, July 23, 2007

Kessler's Analysis Sounds Awful (familiar)

Downgrade to hold from buy based on valuation

We believe Apple's fundamentals remain strong on market-share gains in desktops and laptops, success with digital-media players and software, and notable inroads in the smartphone category. Based largely on these successes, we believe Apple should trade at a greater premium to the p-e-to-growth rate of the S&P 500 Technology Sector, and we are raising our 12-month target price to $155 from $135. However, we think our downgrade is warranted by risk-reward considerations, especially with expectations high and Apple scheduled to report June-quarter results on Wednesday.

-Scott Kessler

Scott, you should run for office....

I actually did vote for the $87 billion before I voted against it.

-John Kerry

I'm the master of low expectations.

-George W. Bush

Netflix and Blockbuster: Know Thine Enemy

So Netflix is getting slammed today because they've lowered rates and we've pointed out that current estimates are high.

Uff dah.

But what really cracks me up is the way people are focused Netflix vs. Blockbuster. While those two are trading jabs, the real enemy is dotting the i's on the Hollywood contracts that will blow the roof off movie rentals.

What would you rather do:

1. Drive to Blockbuster and rent a DVD
2. Order a rental DVD from Netflix and wait for it to be mailed to you
3. Rent a movie from the iTunes Store and watch it on your plasma, your iPhone, and your iPod?

Game over, and soon.

Sunday, July 22, 2007

I got something you can manipulate, pal

So my buddy Shawn emails me to let me know that this character is accusing me of stock manipulation.

M a n i p u l a t i o n.


Dude, I titled this article just for you. Read it now then I'll continue....

While the other n00bs are busy sitting on price targets that you can't even see in the rear view mirror, I'm actually doing some work. Or maybe you missed this little springtime tidbit from my buddy Richard Gardner:

“While we continue to like Apple’s long-term growth opportunity, we see little more than market returns in the shares from current levels,” he writes. “We would be buyers on a pull back to around $90 and believe that summer seasonality, less favorable component pricing and lack of news during the next several months may provide such an opportunity.”

Gardner actually raised his price target on the stock today to $110, from $105.

But hey what do I know, right?

Ant & Sons submits: Piper Jaffray analyst Gene Munster has stuck his neck out quite a few times when it comes to making predictions on Apple Inc. (NASDAQ: AAPL). He made a big call in 2004 and was the first on the Street to say that Apple could move to $100 per share on strong iPod sales. And now he's doing it again.

That's not manipulation brother, that's doing my job. I see where Steve is going with things, and then I actually share the good news. Seen my job title? Senior Research Analyst.

Let the big dog eat.

Saturday, July 21, 2007

What's all the fuss about Cramer?

So last night I'm getting emails about Cramer saying "sell aapl." I don't watch Cramer but Judy from my office records it so I gave her a call. She said that Cramer advised "taking a little off the table" before earnings on the 25th. Well, that's not a sell it's just trading around a core position, says Judy. OK, so why all the fuss?

Well of course the fuss is that, while most people say that "Cramer doesn't move the markets" they are worried that he will. But with aapl, why worry? Plus, when you sell a little now and then so you can buy that vacation home or yacht, there's nothing wrong with that, right? Was that a sell or were you just rewarding yourself a bit? Aapl is going to pull back now and then, that's actually good for the stock. Hey and a lot of the time folks are using their aapl gains to buy.... you guessed it, Apple stuff.

Oh, and one more thing. I'm getting emails asking me to call or otherwise give personal investment advice. Friends, I just can't do that. If you want to meet with me you'll need to contact the office (see www.piperjaffray.com). And some of you need to look at the address bar of your browser right now and think very carefully about what you see there. That's all I'll say.

Enjoy your weekend!

Friday, July 20, 2007

Boom! Christmas in July

Well friends, I hope you're pleased with today's little bombshell. I gave the n00b analysts every opportunity to upgrade after the iPhone launch, but enough is enough. So game on kiddies, I'm on record as the first guy over two hundo (I put the extra five bucks on there just for that purpose). The rest will wait until after earnings, but I don't need a CC to know where Apple is headed.

Merry Christmas folks, enjoy your $205. I'm going to take the rest of the day off.

Thursday, July 19, 2007

One Smart Cook-ie

Have you guys been paying attention to the way Apple is trickling out the iPhones? This whole thing is just masterful. Just enough phones to meet demand. And it's all because of Tim Cook. That guy is the shizzle.

Apple's got the only true ecosystem in the business. From design right until it shows up at their own stores (in the right quantities). They control the whole thing. Well, except for AT&T now, but knowing Steve he'll be calling the shots there soon enough.

Way to go Tim.

Dropping hints into earnings

If you've been paying attention, you notice how I'm dropping more hints as we move into earnings. Today I talked about the revenue sharing with AT&T. Actually I believe the deal is slightly sweeter than the $3/$11, but you get the idea. This is free money for Apple and this is the story that everyone else is missing big time.

Keep watching, I've got more to share.

Took some pictures around the office yesterday with my iPhone. This thing is way too fun.

Monday, July 16, 2007

Monday, and Shannon comes out swinging

Looks like Shannon Cross (Soleil) has raised to $175. I've met Shannon a few times. I sure would like to play Texas Hold 'Em with some of my analyst peers. I think I could take 'em.

OK Shannon, game on.

Sunday, July 15, 2007


How much did Apple earn for the quarter? One George Washington. You read it here. Not what I'll say "in public" of course.

Shope called me to apologize for Chang's antics. Said Kev is gonna have a lot of free time on his hands now. Anyone need an analyst?

I've got Andrew and Judy scoping Apple Stores this weekend. iPhone sales are still strong. The big million is upon us friends.

Thanks for the affirming emails about the blog. It's just nice to have a place to let my hair down.

Thursday, July 12, 2007

JP Morgan, take note

This is how it's done.

Ultra-portable is going to be a massive seller. Not gonna have an optical drive, which will freak some folks out, but it's super slim and light. And the new OS X iPods? Well, I warned you hackers not to waste your money, didn't I?

OS X everywhere folks... fun times ahead.


Why I'm a success

Few things have had as profound an impact on my life as the nuns at the University of St. Thomas. Remember the Penguin from the Blues Brothers? She wouldn't have lasted two days with these sisters. No joke, I've still got the scars. Here's a shot from my sophomore year:

Anyway, even though they were pretty rough, they instilled a real work ethic in me and I've been indebted to them ever since. When Steve returned to Apple I turned them onto the stock and they started investing pretty seriously. Dedicated a whole team of sisters to running the portfolio (mostly selling puts) while the rest of them did their normal campus stuff. They took a little off the table recently and bought an island in the caribbean. Never so much as thanked me, but hey whatever.

Wednesday, July 11, 2007

Kevin, could you check on this?

I mean, since you're right there and all. Run it by Shope before you put out a report of course. ;-)

Apple Is Working On A Business iPhone
Wed, 07/11/2007 - 19:49 — FSY

According to Taiwanese sources, Apple is working on a new iPhones for business executives and wireless audio systems that will allow music to be played directly from an iPod.

The same Taiwanese sources, claim that Apple is working on three new versions of the Apple iPhone, one version will be for non US markets and will include several new features not found in the current model on sale in the US.

According to the source, iPhone new features will incorporate software which will incorporate new business features developed by both Apple and Google. Among the features will be a suite of applications that deliver fast email, messaging and direction information, it will also incorporate GPS service.

How it's done

Vivan just sent me the link to my "impromptu" interview on iDay with Shawn King from Your Mac Life. Analyst n00bs, get your iPhones out and take notes on how I do this (right down to the no-tee-shirt and gel in the hair). 

It's like I was just out for a casual stroll and had no idea that Shawn would be there ;-)

Oppenheimer coughs up a hairball

Just got off the phone with Oppenheimer. We have a cute little understanding whereby if I'm right on something he coughs into the phone, but sometimes when I get him going he can't stop, especially if the news is huge.

Gave me a nice low one (like you do for the doctor fellas) when I asked if I was right about the iPhone numbers. But he just about coughed up a hairball when I suggested that mac sales were gonna be the big surprise for the quarter. No joke, he had to hang up, he was hacking so badly. When he called me back I  let it go through cause I like playing with the visual voicemail on my iPhone.

Publicity Stunt?

Was thinking that maybe Shope and Chang concocted all this hoopla just to get some attention. Then I found out they had a photo shoot for some upcoming JP Morgan ads. Pretty much confirmed my suspicions.

Tuesday, July 10, 2007

Boys, boys

Well it's pretty clear that Bill Shope read my blog this morning and promptly starting running damage control over at JP Morgan.

Chang must've really ticked someone off (besides me). Looks like he'll be staying in Taiwan indefinitely now. Shope gave him a pretty good whack but Shope is nearly just as looney. 3G for an entry level iPhone? C'mon Bill, think a little.

Anyway boys, seriously you need to get your act together. Your investors shouldn't have to choose sides.

Me and Bernanke

I'm on the left.

Firms issue Virtual Sells, clients lose gazillions

The other aapl analysts are chumps, pure and simple. If their clients are paying attention to the targets and selling when they hit, they have left sooooo much bread on the table. Check it out:

Bernstein: $100
Citi: $110
Hambrecht: $125
JP Morgan: $125
Soleil: $125

Who you crappin'? Fellas, seriously get off the golf course and do a little work for a change. I admit I have my staff doing most of my work too but at least I can see that a price target on aapl ought to be above the current pps. n00bs.

Chang, you're kidding me right?

My "buddy" Kevin Chang at JP Morgan got everyone in a tizzy by claiming Steve is going to turn the iPod nano into a low-cost iPhone.

I've played golf with Kev a few times, and he's a nice enough guy, but it really ticks me off when he tries to one up me. Notice how all the other n00bs laid nice and low yesterday after my report? Not Kev. Says for his "research" he talked to a couple Tawainese factory workers and found this patent on the internet:

Then he makes this brilliant statement:

“We believe that iPod Nano will be converted into a phone because it’s probably the only way for Apple to launch a lower end phone without severely cannibalizing iPod Nano,” he said noting that the new phone could have “rather limited functionality.”

OK let's think about that: you "convert" the nano into a phone because that way you somehow won't be "severely cannibalizing iPod Nano." 

So ten year olds want an iPod Nano and now they've got to get a phone? n00b....speaking of rather limited functionality.....

Sorry Kev, but Apple's not turning the nano into an iPhone. Smaller and cheaper iPhone coming? You bet, but it's not going to look anything like the pictures in that patent. Would you buy anything that looks like that? Oh and they're not going to sell 40 million of them in 2008. Dude hype like that is bad for business. Maybe instead of throwing numbers around like that you should think about raising your $125 price target.... which by the way is especially absurd if you really think Apple is going to sell 40 million iPhone Nanos in 2008.

Pretty shoddy work dude... that's why they've still got you stuck on assignment in Tawain instead of hanging with the big boys. Call me when you visit next... I'll spot you two strokes.

Monday, July 9, 2007

Hackers are funny... Wall Street is funnier

Hackers are pounding their chests because they can turn the iPhone into a 6G iPod. Guess they can't wait until the fall when Apple releases iPods with OS X for less than the iPhone.


I told the press today that the new iPods wouldn't have internet on 'em, but that's just to keep expectations a little lower to match my 160 price target. Gives me room.  Also told folks margins on iPhones are 30%, which of course is waaaay low. I have my reasons. Street didn't like that part, but hey...if you're paying attention, you added aapl today. I'm here for the people, not the street (but don't tell the big boys).

Sunday, July 8, 2007

So iDay has come and gone.

And who nailed it? Me. Came out nice and smooth before launch and said 200,000 iPhones when of course I knew it was gonna be five hundo. Learned that from Steve... under promise, over deliver. That's how I roll at Piper.

The other analysts are just a riot. They never take a stand until I do. Shaw Wu (a.k.a. Captain Obvious) said:

the product is doing "tremendously well" thus far.

Wow bro way to go out on a limb. He also said he thought Apple had sold 500k so far, which is of course because he heard me say it first. What a n00b. Then his buddy Chowdry says:

The analyst also said he surveyed users of Research In Motion's BlackBerry who have purchased iPhones and some said they would switch to just using the iPhone if it supported their companies' business e-mail platforms.

"That's directionally very positive for Apple,"

Directionally very positive? What the hell does that mean? Typical n00bspeak. Yeah Trip, of course it's going to be positive for Apple if people switch to iPhone. Duh.

Had to go on cnbc explain why iPhone is going to be a "game changer" (they love when I say that). I talk nice and slow so Joe can understand me. Something else the n00b analysts don't know how to do.

Well, that's it for now. Aapl is going higher this week of course. I assume you saw those shorts get whacked on Thursday. Yeah more of that comin' without a doubt.