This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Apple Remains Locked in Transition

Apple Computer's (AAPL - Get Report) big move to Intel (INTC - Get Report) chips is under way and already seems to be a drag on its operations.

But it will take more than that to scare off the company's long-time bulls.

Sales of the company's computers slowed last quarter and could remain sluggish in the current period, Apple officials cautioned investors and analysts last week while reporting the company's earnings.

Meanwhile, Apple disappointed many enthusiasts and investors earlier in the month by failing to unveil any new products at its Macworld conference .

However, Apple did revamp two computers with Intel chips, possibly indicating that the Intel transition is consuming the lion's share of the company's attention and energy.

The risk, say industry analysts, is that the company will continue to see soft computer sales as it goes through the transition. Further, they say, by focusing so much on the Intel transition, the company risks losing momentum in its computer or iPod music player business -- or falling behind in new markets.

"They need to focus on the transition to Intel chips , because it's a big deal ... from a technological perspective and, I'm sure, from a supply-chain perspective to make this happen," says Bob O'Donnell, an analyst with market researcher IDC.

The question, he adds, is: "Can Apple maintain the momentum it's gained or do a decent job of treading water as it goes through the transition?"

O'Donnell thinks Apple will do "fine" as it goes through the transition, and many investors have even higher expectations. The transition may cause some short-term troubles for the company -- although some investors hesitate to even admit that much -- but the company's long-term prospects are still bright and will likely be enhanced by the move to Intel, they say.

"I don't underestimate the work that has to be done to make a successful transition," says Tony Ursillo, a buy-side analyst with Loomis Sayles & Co., whose firm is long Apple. "But I'd rather bet for Apple than against Apple."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
ADBE $73.94 0.00%
AAPL $124.43 0.00%
FSL $40.76 0.00%
IBM $160.50 0.00%
INTC $31.27 0.00%

Markets

DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs