Macworld UK discusses analyst speculation that OSX Leopard will trump Vista is what’s behind AAPL’s nice run of late.
“We believe that the fact that Vista is designed to be much like Mac OS X will, in the consumer’s mind, make the transition from using XP to Vista very comparable to making the transition from XP to Mac OS X. We believe this could provide ample opportunity for Apple to gain greater market share with consumers. With Apple’s next-generation operating system, Leopard, due in April 2007, we believe Apple will continue to stay more than a step in front of Microsoft,” the report concludes.
That’s all well and good, but also very deceiving at best, and dead wrong at worst.
AAPL share price is being driven by the following factors, and nothing more:
- The promise of another outstanding holiday season, which is traditionally a very strong time for Apple. The iPod remains the gift to get for music/video fans, and Macs — especially the Macbooks — are more sought-after than ever. Yes the iPod remains the primary driver of AAPL’s share price, as it owns the market and the lead is Apple’s to lose. The quite noticeable resurgence of Macs is beginning to chip in as well, so the holiday season is rife with massive expectations — and, traditionally, similar results — for Apple.
- Pre-Macworld San Francisco (MWSF) hype. This is the largest Mac show of the year, and it’s typically when Jobs announces the company’s biggest news for the upcoming calendar year. This year’s MWSF rumors include everything from Leopard being announced as ready-to-ship, the release of iTV and Apple’s oft-discussed but never-seen iPhone. Regardless of what happens, investors and Apple fans alike look to this show to kick off the new year in terms of what Apple has in mind and where it’s going.
AAPL’s share price did a similar jig last year, too:
See the nice run-up ending about the second week of January? The same second week of January when last year’s MWSF was? Yeah, exactly.
It’s fun to speculate that the desktop showdown of 2007 between OSX Leopard and Vista is what’s causing AAPL to soar, but as romantic as that might be, it’s just not true.
Technorati Tags: Apple & OSX, Investing, Vista
23 responses so far ↓
Andrew Hedges // November 25, 2006 at 3:23 am
I think you’re dead-on. People aren’t looking ahead to Vista versus Leopard. The factors affecting the stock price are much closer at hand.
One point related to yours that you didn’t make explicit is that Microsoft’s Zune is off to the worst start possible. No one stood in line to get one of the first Zunes. This bodes well for iPod’s continued dominance.
sottozero // November 25, 2006 at 4:26 am
Andrew — most people, unfortunately, don’t know about Vista at all. They’ll hear and learn about it next time they buy a PC, or when a friend gets it, or when their kids ask them to upgrade the home computer. The OS isn’t very sexy these days.
Thanks for your comments. It’s nice and all to think there’s an epic clash about to happen and the emotion of it all is driving AAPL’s stock price, but nah. Not happening.
Regarding the Zune, I could not agree with you more. In fact, I posted something about it earlier.
http://gracefulflavor.wordpress.com/2006/11/18/initial-zune-sales-weak-2/
ConradGempf // November 25, 2006 at 9:00 am
Maybe it’s truer to say that the immanent release of Vista hasn’t hampered Apple’s usual Nov to Jan “Good Vibes Fest.”
Uncle Paul // November 25, 2006 at 11:18 am
I don’t think there’s any true public awareness of a Leopard vs. Vista showdown or feature bake-off. Although it will be interesting to see if IT folks hold off on Vista to take a peek at what Leopard has to offer during their upgrade cycle.
Jono // November 25, 2006 at 1:31 pm
I suspect the reason for the lack of Vista publicity is due to the fact that Microsoft is afraid they will not be able to live up to the promised delivery date. I think they will push Vista heavily, once Microsoft nails down a date they can actually hit. Maybe it is a waiting game for MS, see what Apple does (again) and then scramble to mimic it before launch? I suspect this to be the case; as Steve jobs kept a few things “secret” during is Keynote address covering Leopard earlier in the year.
I am surprised that IE 7 has not been pushed more heavily. Firefox got a lot more attention than IE 7 has thus far.
David // November 25, 2006 at 1:55 pm
Exactly where in the passage you quote does the author attribute Apple’s current share price increase to Leopard v. Vista? Nice straw man.
sottozero // November 25, 2006 at 2:12 pm
Uncle Paul — not sure if Leopard will have much of anything for most folks’ next upgrade cycle. PC people will likely just stick to PCs unless there’s a reason, an outside impetus, to look at a Mac. Then a *small* percentage of those will take a look at what Leopard will offer over Vista.
I still contend that operating systems are largely invisible to most, not including people who read blogs about such things.
We shall see, I guess.
sottozero // November 25, 2006 at 2:14 pm
David — it’s in the very title of the document I linked in the third word of my post. No strawman here whatsoever.
Here’s the text: “Apple shares hit new high as analysts say Mac OS X may beat Vista
Apple shares reached an all-time high yesterday, as analysts said Mac OS X may ‘get the best of’ Vista.”
http://www.macworld.co.uk/mac/news/index.cfm?newsid=16544&pagtype=allchandate
You might want to read the entire Macworld article instead of just an excerpt.
pinoybands // November 25, 2006 at 4:18 pm
Mac will never dominate the PC market.
If in case windows is dead there will always be *nix based OSs.
my2cents
Ronald // November 25, 2006 at 4:39 pm
Actually, David’s point was a good one. There is a long passage quoted, which talks about reasons Apple may gain market share. After which, you say that the above opinion is “very deceiving at best, and dead wrong at worst.” And then you go on to make an argument that bears no relation to the quoted text. David’s simply calling you on that.
And you defend your non-sequitur by saying you included a link to text that would make your argument clearer? Okay. But did you even pay attention to what you were quoting? The ease of copy-and-paste and of hyperlinks is supposed to free us up to be more clear and more accurate, not less.
Just as you say David should read your link, maybe you ought to actually read what he said.
You feel like the title of the article was really what you wanted to rebut? You should have quoted that title, and then argued against that mis-apprehension. There were other passages in the article that were more pertinent to your case? Fine. You should have quoted those instead.
But — OUCH! — talk about the pot calling the kettle black, maybe you need to, uh, how did you say it? Oh yes: “You might want to read the entire Macworld article instead of just an excerpt.”
Okay, here is an interesting quote from the article:
“Apple’s rumoured launch of an iPhone, observations of strong iPod sales this season, and high expectations for Apple’s hardware and software product road map in 2007 all drive shares upwards.”
You just read an article, took exception to it, and copied the last paragraph. But the same myopia that allowed you to see no further than the last paragraph appears to have kept you from realizing that your main point was already made in that article.
Sorry, man. Very weak. Rather that jump on David, maybe you needed to look back, realize that you blew it, and be a man and admit it.
sottozero // November 25, 2006 at 4:50 pm
Ronald — I understand your point, but wow, we certainly are dissecting semantics, aren’t we?
David’s point is good, and I did not “jump on him.” I did, however, point out that my “strawman” came from the very title of the document that’s linked in the third word of my post.
To your point about my cited text, it does say pretty clearly that analysts are looking at Vista’s overall design as very similar to Mac OSX, and that Leopard may well stay ahead of Microsoft. It also says that the Vista vs. OSX comparison might be gateway for Apple to increase marketshare with consumers.
So while the cited text doesn’t say the words “stock” or “share price”, increased marketshare lends itself to increased stock performance as well.
Looking at cited text as a hard microcosm of my post’s point is pretty invalid when the very title of the document I liked to very clearly says that OSX vs. Vista is driving AAPL’s share price.
Regarding the iPhone, etc.: they are valid price drivers and I mentioned them as potential announcement material at this year’s MWSF 2007.
Thanks for your comments.
Jarod // November 25, 2006 at 5:43 pm
One can debate this topic to death; the truth is very simple. Microsoft is a pile of junk that got LUCKY at a time when there were no real competitors and no established laws and regulations to prevent it from illegally dominating the market. Furthermore, 10 years ago, the ignorance of the masses was SO BAD, that ANYTHING marketed with 100 million dollars would have come out on top.
Today though is a different time. People are much more aware, laws are much better defined, and yes, REAL tech people are here. Apple is the only real deal in town. They KNOW technology; it’s in the blood, their DNA. MS knows nothing near that level and which is why they are falling apart today.
Vista is a joke..a very very bad joke, although no where near as bad as that fatality called zune.
xbox? tick tick tick… Sony barely launched a few consoles and people were shot over it. MS could only dream of such a reaction to ANY of its products. Once production moves up, adios xbox.
So is the AAPL stock prices based on Leopard vs Vista? I think in a big part yes but I think the real answer is that the stock price is based on peoples’ belief that Apple is the new MS Killer and new king for the next decade.
MS should simply close shop and avoid itself the ever growing humiliation it does so well to attract. And as for its products, NONE of their products belong anywhere else but the garbage. Not the recycling bin..the garbage. In fact, every sensible human being should SUE that company for everything it has messed up and cost.
wolferiver // November 25, 2006 at 6:06 pm
A majority of Windows users are corporations. Corporate IT departments are unlikely to jump on the Leopard bandwagon, and are probably not going to go all out for Vista either. (At my corporation, for example, we have over 40,000 employees, and are only now in the midst of replacing Win2000 with WinXP.)
It is an unbelievably huge undertaking to change operating system platforms, and to get 40,000+ people at a single corporation to switch. Furthermore, there are all sorts of special and custom applications that are hooked into Windows that will cost each business many $$ either to abandon and find another substitute, or to rewrite the code. (And I’m not just talking about a macro or two for Excel or Word, either, but about extremely specialized accounting and manufacturing information applications.) So the investment require to change to a new OS, in training employees, in re-doing all the existing custom applications, and making any necessary hardware changes will be extremely high. The decision to switch simply won’t happen unless it can be proven that this will improve the overall productivity of the business — something that isn’t likely given the long term adverse effects that making such a change is likely to have.
Here’s a blog opinion piece that I think elaborates on this point better than I can:
http://blogs.msdn.com/oldnewthing/archive/2006/11/06/999999.aspx
This blog post should show the careful reader how deeply embedded Windows is, and why it is extremely unlikely that any Mac OS will overtake it.
As for what Joe Sixpack will do, well, they’re pretty satisfied with XP. I use both XP and OS X, and despite what the Mac fanboys would have me believe, I have not found that one is better than the other. They both have their frustrating points, and their strengths. The average home user is generally unaware of any OS change that’s about to fall on them, and if they were, they would most likely to be concerned any OS that requires them to relearn how they do whatever they’re used to doing now.
One of the very nice things about Windows for the home user has always been that whatever flavor the average user has at home, generally speaking they can still get new applications to run for them. I have not found this to be true in the Mac world, and now that it’s been almost 2 years that I’ve had one, I may have to upgrade the OS just so that I can keep on getting new softwares. (The way that things have been going, I will very likely have to upgrade a year from now, and quite possibly upgrade my hardware as well. At that point I’ll have to re-evaluate whether or not a Mac machine is good value for my money, given the things I want to do on a computer.) On the other hand, I’m perfectly confident that I will be able to continue using XP for many more years to come without spending more money to upgrade.
Jeff Ventura // November 25, 2006 at 9:21 pm
Jarod — I agree with most of your points, but I don’t agree that MS will bleed with the Xbox 360. Already they are becoming profitable on a per-console basis, and the development environment is better than that of the PS3.
I think the Xbox 360 will do very, very well. I don’t see MS botching that too badly.
The Zune? I don’t think it will ever compete with the iPod for real. It will compete for the top of the non-iPod market.
As for Windows, many people still won’t consider anything but, despite a preponderance of evidence that there are better options out there. I’m considering a blog post about this very topic.
Thanks for your commens. Much appreciated.
Patrick McMaster // November 25, 2006 at 11:46 pm
I too have both windows and macs in my home and at work. I am not impressed with any huge difference in the two systems except for the need to spend more money on security systems on the pc, and the additional software available to run on XP.
The real reason that I see the mac as a good long term bet is the trend toward virtualization in operating systems. There is no longer the huge hit in performance shifting from one OS to the other on the same machine. Intel’s decision to increase the number of cores rather than clockspeed increases the viability of virtualization. When I have 16 cores running on my system there will be very little overhead to keep 2 OS’s running at the same time, or to emulate one OS on another system.
Apple has all the pieces in place to really eat away at Microsoft’s core business. They have a much simpler OS eco system to manage. The number configurations of systems that can run the Mac OS is somewhere between 1,000 and 1,000,000 depending on how you want to draw the line between configurations. The XP probably supports 5 to 10 orders of magnitude in additional system configurations. This is why MS finds it so hard to produce any software let alone new software.
Apple remains nimble because it’s ecosystem is so small. They can actually innovate in creative ways that no other businesses can. They can create a winner on their OS and then port the software to XP or Vista with little risk or downside. If it doesn’t work as well on your machine you blame Microsoft not Apple.
The real question about Apple is can they replicate the ipod’s success with the iTV and the iPhone. If they can then this stock is underpriced by 10 to 100 fold. If they can’t then the price is about right on target. I don’t see any downside except the outstanding audit issues. Which is a pretty big exception if you ask me.
atomic1fire // November 26, 2006 at 12:43 am
its christmas time thats why
more people are buying stuff near the end of the year for christmas stuff and computers are one of those things
gwhiz // November 26, 2006 at 8:38 am
I sold my AAPL stock week before last. Bought at $66 and change and sold at $88 and change. I’m happy with that and figured it was time to make tracks.
Guess what I did with a little of that profit? Sunk it right back into Apple and bought Michelle (wife) a new Shuffle. She had seen the new ad the night before and figured the time was right for her to join the club.
AAPL’s doing a LOT of things right and others are too. Zune’s a good first gen player and they’ll get the form factor stuff figured out. The thing is Apple’s going to out-execute everyone unless they bork their lead (which I don’t see happening) in the MP3 space.
OS wise… with a Mac laptop at work, an old dual G4 get up at home and three XServes at a co lo across town… yeah, I’m bought in deep. As an ADC Select member all I’ll say about Leopard is I wish Mr. Jobs had taken the opportunity to reveal more of the features before Vista shipped to manufacturing.
Jarod // November 26, 2006 at 9:34 am
Mac vs Windows has a lot to do with culture and education as well. As with any product, the masses lack the knowledge to appreciate a good product. The fact is, cheap sells a lot more simply because there are a lot more people that can’t afford better and don’t know any better either.
Have you ever listened in to the types that buy a Windoze PC at Walmart or Best Buy? Here’s a list of questions that I commonly here. ‘Does it have internet?’ Oh its on special at $299..is a good deal. That’s what MOST people do. You can’t expect your avg Joe to appreciate a good bottle of wine can you? Even if you priced a $100 bottle at $20, he will go for the $12.99 bottle because to him its all the same. There is no concept of differentiation between the two products. Mac and Windoze, same thing for most people even though more and more PC people are reading up on the benefits of Mac and are switching.
Analyze a Mac user and analyze a Windoze user… chances are, you’ll find a world of difference between these two people (knowledge, education, skill, insight, etc etc). If you can’t tell the difference or rather appreciate the difference between a Mac and a Windoze machine, then you pretty much fall into the category of person who can’t appreciate a bottle of good wine. To a connaisseur, you’ll always be an idiot.
The fine things in life were never meant to be for everyone, that’s an unavoidable fact.
Jeff Ventura // November 26, 2006 at 10:01 am
gwhiz — I bought my AAPL at $70 and I’m still holding. I suspect I’ll take my profits sometime in the next 4 weeks or so. Believe it or not, I think AAPL still has room to run.
Interesting comment about Leopard — why do you wish Jobs had revealed more of what it will offer? Just wondering.
Jarod // November 26, 2006 at 10:11 am
I must disagree with the point about Leopard being disclosed. The fact that it’s not is the best way to keep MS guessing the wrong way even though, even if they did know, I honestly doubt, it would still make a difference considering the talent they harbor at that place.
Jeff Ventura // November 26, 2006 at 10:33 am
Jarod — Jobs wanted us to think that there are Leopard features that he didn’t disclose so that MS wouldn’t copy them for Vista, but the truth is the Vista was already close to code freeze and RTM to absorb any new features. All that talk from Jobs was just that — talk. And good for him: he’s a master marketer that way.
What we don’t know about Leopard wasn’t ready to show in terms of GUI/production quality, or wasn’t 100% functional. Whatever the reason, I don’t think it was for fear of Vista copying what Leopard will have.
That said, I am fascinated — maybe a little too much — with what Leopard will really bring to the table. I like to think that an entire UI overhaul might be in the wings, for now that Vista tries to be very OSX-ish, it’s time for OSX to move the goalposts again. iTunes 7 might give us a glimpse of what some of the new Leopard UI might look like, and that’d be cool. I think iTunes 7 is a sexy beast.
Jarod // November 26, 2006 at 11:15 am
Jeff, I totally agree. I’m looking forward to Leopard as well. I recently bought the new 17 MBP Core2Duo and can’t wait to run a true 64bit OS in it to see it screeaaam
gwhiz // November 26, 2006 at 6:46 pm
Jeff, it probably will go up a bit more. I just don’t have the intestinal fortitude to stick it out. Plenty of other places to put money right now and that might change between now and when AAPL hits the 100’s (or splits which would really bum me).
I have no idea what Leopard’s hidden goodies are. That said, I’d *LOVE* to see bittorrent built into the GM. FTFF would be good too… Things like Quicksilver and TextExpander should just be built in. iT7 is nice and if that’s what you like… OSX 10.5 is not going to dissapoint.