Apple (NASDAQ:AAPL), the maker of the Apple TV, competes with Motorola (NYSE:MOT) and Cisco (NASDAQ:CSCO) in the digital media receiver segment. Apple TV is a set top box that lets you stream videos, play music and view photos on your television. We currently have a Trefis price estimate of $337 for Apple’s stock, about 29% above the current market price of $261.
Trefis members have created forecasts for two key drivers of Apple’s stock over the last week: (1) Unit Sales of Apple TV and (2) Apple TV Gross Profit Margin. The members’ forecasts suggest that Unit Sales of Apple TV will trend higher than the Trefis forecast, whereas Apple TV Gross Profit Margin will mostly be in line. These projections suggest very little upside to Apple’s stock.
Below are charts showing recent estimates created by Trefis members for: (1) Unit Sales of Apple TV and (2) Apple TV Gross Profit Margin.
The average of forecasts for Unit Sales of Apple TV created by Trefis members indicated a projected increase from around 9 million in 2010 to around 32 million by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 8 million in 2010 to around 25 million by the end of the Trefis forecast period. The member estimates imply little upside to the Trefis price estimate for Apple’s stock. In the past, Unit Sales of Apple TV has increased from close to 2 million in 2007 to about 5 million in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Apple’s stock to Unit Sales of Apple TV.
Our complete analysis for Unit Sales of Apple TV is here.
2. Apple TV Gross Profit Margin
The average of forecasts for Apple TV Gross Profit Margin created by Trefis members indicated a projected increase from around 20% in 2010 to close to 25% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from around 22% in 2010 to around 25% by the end of the Trefis forecast period. The member estimates imply small upside to the Trefis price estimate for Apple’s stock. In the past, Apple TV Gross Profit Margin has remained close to 21% from 2007 to 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Apple’s stock to Apple TV Gross Profit Margin.
