Excerpts from the notes we’ve seen.
Rod Hall, JP Morgan: New MacBooks with higher ASPs. Apple clearly positioned the MacBook lineup as four models running from the new MacBook at $1,299 up to the 15″ MacBook Pro at $2,399. The reality of this new lineup is that the lowest priced MacBook Air is still at $999 but the top end has extended by $300 [ex ped: $400] to $2,399. In addition, the new least expensive MacBook Pro 13″ has increased by $200 to $1,499. We wonder if this lineup ends up generating more margin for Apple assuming no price elasticity. See table below. Overweight. $114.
Amit Daryanani, RBC: Thinking Through the MacBook Pro Product Announcement. Apple announced newly redesigned MacBook Pro laptops, during a product introduction event earlier today. The new devices will feature a touch screen Touch Bar in place of traditional function keys for both the high end 13″ and 15″ MacBook Pro computers. In addition, the new MacBook Pro will also feature Touch ID functionality enabling faster logins, and Apple Pay… Overall, we view the product redesign as a positive and believe that new laptops could help revert the Mac segment to y/y growth in FY17. Outperform. $125.
Steve Milunovich, UBS: A New UX for the Mac and the Singularity of TV. The focus of the MacBook Pro refresh was Touch Bar, a touch screen-style interface replacing the function keys at the top of the keyboard… Since Mac is 11% of revenue and 7% of profit, the refresh is unlikely to move the needle. However, the new Touch Bar demonstrates Apple’s ability to develop new user interfaces. Often the development of new user interfaces unlocks new hardware products (iPod, iPhone). At the least the refresh should stabilize Mac sales which were down 14% in F4Q/16. Mac ownership can be an anchor product for other Apple devices, so maintaining a healthy installed base is important. Buy. $127.
Maynard Um, Wells Fargo: Event largely as anticipated. Apple introduced two new MacBook Pro notebooks at its event today with two key features – TouchBar and TouchID… Additionally, Apple introduced an Apple TV app that improves the user interface and curates TV shows and movies in one place, which we suspect Apple may look to monetize through paid search as it does on its App Store (as well as distribute its own content). Apple also introduced a new version of Final Cut Pro X. The event was largely in line with our expectations and we believe new Macs should help units and, particularly, ASP. Market Perform. Valuation range: $105-$120.
Gene Munster, Piper Jaffray: Macbook Pro Refresh Delivers Innovation Needed To Restore Segment Growth. We view Apple’s Macbook Pro updates with Touch Bar and Touch ID as a solid evolution in the company’s pro line of laptops. Touch Bar is a unique addition to the Macbook Pro that even more closely aligns Macs with the iOS suite, which we believe strengthens the overall product halo. Typically, Macbook Pros get advanced features first and they eventually trickle down to lower-end devices. We wouldn’t be surprised if the Touch Bar and, even more likely, Touch ID make it to the Macbook line up in the next 1-2 years. While we don’t expect the updates to meaningfully move the needle (Mac’s will be ~10% of revenue in FY17), we believe this should return the Mac segment to growth in the near-term and shows that the company continues to launch innovative new devices. Overweight. $155.
Trip Chowdhry, Global Equities: “Touch Bar” Macs are a compelling upgrade. “Touch Bar” will have the same significant impact to the computing Industry to what “Mouse” had 40 years ago, which started out as a convenience, but ended up being a necessity. Overweight. $155.
More as they come in.