Apple (NASDAQ:AAPL) unveiled a slew of new products yesterday, including a $99 version of the Apple TV set-top box, a new line of iPods, and iTunes 10, which comes bundled with a music-centered social network called Ping.
All these products combined constitute only 6.4% of our $337 stock price estimate for Apple. As a result, we don’t see Apple’s stock moving appreciably as a result of the new lineup. Our analysis follows below.
$99 Apple TV
The new Apple TV is about one quarter the size of the original model and sells for less than half the price. It offers no local storage, streaming all content to your TV from the Internet or from a PC.
The new version pushes the average Apple TV price for 2010 down to $121. We have adjusted our Apple model accordingly. We expect Apple TV unit sales to more than double as a result of the price cut, rising from 5.4 million last year to 11 million in 2010.
Because Apple TV constitutes only 1.3% of our Apple price estimate, however, we don’t expect the new release to have any significant impact on the stock.
You can drag the trend-line in the chart below to create your own Apple TV pricing forecast and see how it impacts the company’s estimated share value.
iPod new product launches
Apple released several new iPod models: a new iPod Shuffle priced at $49, a new iPod Nano with multitouch interface, starting at $149, and the new iPod Touch. The latter starts at $229 and includes features like Retina Display and FaceTime video calling.
We estimate that iPod constitutes only 2.2% of our Apple stock price estimate. We expect Apple’s share of the portable media player market to increase from around 29% today to about 32% by the end of the Trefis forecast period, which is not enough to move the stock.
In the next interactive chart you can drag the trend line to create your own iPod market share forecast and see how it impacts Apple’s stock price.
iTunes 10 includes Ping social network
The new iTunes 10 includes a music-oriented social network called Ping. It also allows users to rent TV shows for 99 cents per episode from ABC, ABC Family, Fox, Disney Channel and BBC America. Apple’s entry into the streaming video market challenges established players like Netflix (NASDAQ:NFLX) and Hulu.
In an earlier article, we argued that this move is unlikely to affect Apple’s stock, once again because iTunes contributes a tiny percentage of the company’s total revenues. However, Ping could generate some upside for Apple if it attracts a large user base. We’ll examine this possibility in a future article.
You can see the complete $337 Trefis Price estimate for Apple’s stock here.
