By Philip Elmer-DeWitt
December 5, 2008

For a full 12 months – even as Apple’s (AAPL) share price fell and rose and fell again, from $202 last December to $80 last month – Piper Jaffray’s Gene Munster stuck to his price target of $250 share.

Until today.

Citing the “macroeconomic headwinds” that are slowing PC sales across the board, he announced on Thursday that Piper Jaffray is lowering its 2009 target for Apple to $235 a share.

That’s still higher than all but five of the 35 analysts surveyed by AAPLinvestors, whose targets for Apple range from Barclays Capitol’s $113 to ChangeWave’s $275.

But it represents a significant concession by one of Apple’s most bullish analysts, and the one that many investors consider the most reliable.

In a report to clients issued early Thursday morning, Munster offered three scenarios – bear, neutral and bull – summarized in the table below:

But even his most bearish estimates will soundĀ – except perhaps for his iPod numbersĀ – bullish to some. He justifies them as follows:

  • Mac. “While our ’09 Mac unit growth estimate of 10% y/y may seem aggressive, we point out that Mac units (excluding the Sept. 2008 quarter…) have grown on average by 43% Sept. ’07 to June ’08.”
  • iPod. “Bottom line: we are modeling for the sky to fall on iPod demand. In FY08 iPod units grew at 6% y/y. We are modeling for units to be down 20% in CY09. This is not an optimistic outlook for iPod in ’09.”
  • iPhone. “We think that iPhone demand will spike in CY09 (we are modeling units to go from 16m in CY08 to 45m in CY09).”

Munster’s prediction that Apple will ship 45 million iPhones in 2009, it must be noted, is considerably higher than any other analyst we’ve seen. How does Munster justify it, especially given what he acknowledges is a meltdown in consumer spending? 1) His belief that the smartphone market will grow in ’09. 2) The power of iPhone software. 3) His continued belief that Apple will introduce a family of iPhones in ’09, aimed at market segments (prepaid, teens, business professionals) not currently being targeted by Apple.

Munster does offer one caution about the iPhone’s prospects for 2009. Given the flood of competing smartphones (i.e. Storm, Instinct, Nokia N97, and Android-based phones, to name a few), he adds:

“On a separate note, the iPhone does run the risk of death by a thousand cuts as new phones enter the market with strong initial demand, then fade away.”

Munster concludes by pointing out that Piper Jaffray is lowering its 2009 revenue and earnings estimates across its “entire coverage space” in the range of 10% to 15%. But Apple, he believes, is better positioned than most companies to weather the storm. Accordingly, he is reducing Apple’s revenue estimate by only 3% to 7% in his three scenarios:

You May Like

EDIT POST