One on One with Yair Reiner of Oppenheimer and Company
Monday, October 19, 2009
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SUSIE GHARIB: Joining us now with more analysis on those Apple numbers, Yair Reiner, applied technology analyst at Oppenheimer and Company. Hi Yair.
YAIR REINER, TECHNOLOGY ANALYST, OPPENHEIMER & CO.: How are you?
GHARIB: Good, thanks, this was a very impressive report. Now a lot of Apple's earnings came from sales of its iPhones. Do you think that Apple can keep on growing and selling these iPhones?
REINER: Indeed, all indications are that they would actually sold many more iPhones this quarter if they could have made more. They actually had some production issues actually prevented them from shipping to demand well into September. Towards the end of the quarter they were able to actually meet demand.
GHARIB: What does -- what does Apple sales tell us about consumer spending and tech spending or is it hard to draw out any kind of broad- based trends because Apple is one of a kind?
REINER: I think there are a lot of things that make Apple unique. At least one very interesting trend, traditionally people tend to view Apple as a premium product. And as such over the last few quarters, we've seen them outgrowing the rest of the market at a relatively small rate. I think what we are seeing really in this quarter is that, on the PC side especially, their growth rate relative to the rest of the market took off. Their units and PCs were up 17 percent year over year. That is an order of five or six times faster than the rest of the market. What that tells us is that the consumer is opening up their purse, not just for low-end products now, but also for premium products where they think there is real value.
GHARIB: So what do you expect to happen for Apple sales during the holiday season?
REINER: I think they're looking at a great December. They shouldn't be facing any of the supply issues on the iPhone that they had in the third calendar quarter. And also when you look at PCs, they are expecting to have a relatively important refresh of their desktop models and also their low-end notebook products. I think December should be another stunning quarter for Apple.
GHARIB: You have a "buy" rating on Apple stock. Tell us where you think the price is going.
REINER: Well, I'm going to call ahead of price target of $210. We're almost there right now, so clearly that is something I have to revisit relatively shortly.
GHARIB: Why do you have a "buy" rating on the stock?
REINER: Well, I think that if you look at Apple, you know, whether you are looking at the notebook side of the business or the handset side of the business, Apple is really defining what consumer electronics are. And as long as it is a trendsetter, it is able to charge more than its competitors, make a nice margin and nice return for investors.
GHARIB: Any disclosures to make about your own ownership of Apple or your firm's involvement with the company?
REINER: I do not known Apple shares and Oppenheimer does not do any investment banking with Apple.
GHARIB: Thanks so much for coming on the program.
REINER: Thank you.
GHARIB: My guest tonight, Yair Reiner of Oppenheimer and Company.
