Apple May Need to Power Up Mac
"They had a strong February," says Stephen Baker, a hardware analyst with NPD Group. "I expect them to have a pretty strong March, too." The research firm has not yet released its March data.
But some analysts are starting to question how long Apple can ride iPod's wave. Competition is starting to grow.
Microsoft (MSFT) has targeted the market and is promoting rival players that use its own audio-encoding scheme. Some analysts, though, predict Apple will see a greater threat to the iPod from devices that do more than play music.
Sony (SNE) is trying to push its own digital music scheme with music-playing phones from its Sony Ericsson unit and the PlayStation Portable, a new multimedia-capable, handheld game machine."The competition is just fierce," Somaney says.
A Snowball From HeavenEven if Apple is able to continue its torrid iPod growth, the expectations built into its stock have reached the point at which the company needs to show growth in other areas -- namely computer sales, analysts say. The company has made much of Microsoft Windows users switching to Macs. Meanwhile, a number of analysts have predicted the iPod will have a "halo effect," attracting users to the Mac platform. But to date, the company has had little evidence to show it's attracting new Mac users in significant numbers. "The iPod is a snowball going downhill: It's getting bigger and bigger every quarter. The Mac doesn't have that kind of momentum," says one hedge fund manager who is long Apple. "I'm hoping that it will develop that kind of momentum. They've got to sell more Macs." Apple is attempting to do just that. The company is pitching its new cut-price Macintosh, the Mac Mini, to Windows users who are reluctant to switch because of the typically higher costs for Apple computers. And on Tuesday, the company announced that later this month it will begin shipping the latest version of its operating system, which has features not available with Windows.
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