Piper on Apple Q3 2008

Analysts at Piper Jaffray share worries in common with rivals like Needham following Apple's Q3 results, according to a new report. Piper notes that while Apple produced $7.46 billion in revenue during the quarter with an EPS of $1.19, partly due to a 42 percent year-over-year growth in Mac sales, the predicted slide in gross margins from Q3's 34.8 percent to "about 30 percent" in FY09 may not bode well for stockholders. Piper had been estimating a 32.3 percent margin for FY09.

Piper cautions people, however, that things are not quite bleak. Apple is said to typically guide gross margin to about 270 basis points below where it will actually fall, and the company is believed to be absorbing the extra expense in order to fund new efforts. There is said to be "an 80 percent chance," for instance, that in future redesigns, Apple is planning to drop the base price of the MacBook to $999, and the MacBook Pro to $1,799.

Apple is also expected to release new iPods and/or other portables in the September quarter, likely including new, cheaper touchscreen iPods. In general however, Apple is expected to stick to a policy of "premium" pricing.

by MacNN Staff