By Philip Elmer-DeWitt
October 15, 2010

Once the darling of the Apple bulls, Piper Jaffray’s senior analyst now walks a cautious line

In June 2007, three weeks before Steve Jobs sold his first iPhone, Gene Munster predicted that within two years Apple (AAPL) would be shipping them at the rate of 45 million a year — a call he reiterated 9 months later, along with a road map specifying exactly how the company would do it.

In fact, Apple sold 25 million iPhones in 2009 — 20 million short of Munster’s target. The company probably won’t sell 45 million in 2010, either, although it could get close.

All this is to help explain why the Gene Munster of 2010 is not the Gene Munster of 2007. He’s hardly an Apple bear. He does a lot more shoe-leather research than most analysts, and he’s still one of the most sought-after talking Apple heads on cable TV. (His interview Thursday with Silicon Alley Insider‘s Henry Blodget, in which Munster calls Steve Jobs “irreplacable” and backs off an earlier prediction that Apple would hit $1,000 a share, is pasted below the fold.)

But having made his name with estimates considerably more aggressive, and prescient, than the Street’s, he’s turned into one of the most cautious Apple analysts — and not one of the most accurate. He came in 21st out of 32 in our Q3 Earnings Smackdown and 23rd in the more comprehensive Deagol Ranking (see here). As recently as Oct. 5 he was still sending clients a spreadsheet that had Apple selling 2.244 million iPads in the quarter that ended 10 days earlier — more than 2.5 million units shy of the Street’s consensus.

He finally updated his numbers in a note issued Friday — the first of a wave of last-minute analyst’s reports expected before Monday’s Q4 earnings call — which we’ve summarized at right. But his iPhone and iPad estimates are still below the Street’s, and he’s warning investors not to look for the kind of earnings beat they’ve come to expect in the past.

“The Street is looking for EPS of $4.05. Assuming a typical beat over the past 17 quarters, Apple would report $4.80. To get to $4.80 on $18.8b in revenue would require gross margin of 43%, well ahead of 39.1% in June, the Street’s 38% September estimate and guidance of 35%. The bottom line is the mix shift and revenue upside driven by the lower margin iPad (about 30% gross margin) significantly tempers EPS upside potential.”

In other words: he’s cautious.

“We’ve stuck our neck out more than any other analyst,” Munster says in his defense. “And we continue to do so. If you look at the numbers, we’ve been wrong in the past — very wrong. But in terms of who knows where the Apple story is going, I think we’re just as sharp today as we were in 2004.”

Below: That Henry Blodget interview.

Vodpod videos no longer available.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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