Morgan Stanley analyst Kathryn Huberty thinks you should buy Apple stock. Why? Because Apple’s coming out with all kinds of great new things. Barrons’ Eric Savitz summarizes.
That sounds exciting! But how does Huberty know Apple is working on lots of new toys? There’s one straightforward clue: research and development spending was up 34% in the December quarter. A less obvious tell: Apple boss Steve Jobs is flying more.
Apple spent $550,000 on Jobs’ aeroplane expenses — we assume it’s on the Gulfstream V he made the company give him in 2000 — during the December quarter. That’s three times the average over the previous six quarters. Jobs is “integral to negotiations with international carriers and supply chain partners,” she notes. So when Steve’s flying, Apple’s new-gadget gears are cranking.
But while Huberty is bullish on Apple long term, she’s still slashing estimates for the March quarter. Huberty expects Apple to sell 8.5 million iPods this quarter, down from her previous guess of 10 million, and 1 million iPhones, down from her previous guess of 1.5 million. She still expects Apple to sell 2 million Macs this quarter.
Like Bernstein’s Toni Sacconaghi, she expects Apple to miss its 10-million-iPhones-in-2008 goal — she pegs 2008 iPhone sales at 9.3 million units, down from her previous estimate of 10.5 million.
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