Analyst firm predicting Leopard ‘in the next few weeks’

Posted by Dennis Sellers Mar 12, 2007 at 9:04am

ThinkEquity Partners thinks that Apple will release Mac OS X 10.5 (“Leopard”) “in the next few weeks.” “With the Leopard launch (Mac OS X v 10.5) just around the corner, we have revisited our Apple revenue and earnings power estimates in light of the ever-larger Mac OS X user base,” analyst Jonathan Hoopes wrote in a note to clients.



As a result, he’s raised his fiscal 2007 estimates on Apple. The analyst is forecasting the Mac maker to earn $3.24 per share on sales of 24.4 billion (up from $3.06 and $23.6 billion), representing 43 percent earnings growth and 26.3 percent sales growth year-over-year. Hoopes also thinks that Adobe’s Creative Suite 3.0 software suites will arrive in the same time frame as Leopard, which will spur the sales of pro Macs.

He estimates Apple’s creative pro user base at 4-5 million strong, and thinks there’s a “pent-up demand” for Mactels among such users, who have been awaiting CS3 and Leopard.

Last month analyst Gene Munster with the Piper Jaffray firm estimated that Mac OS X 10.5 will see sales of 2.6 million copies during the June quarter, adding $130 million to the company’s revenues. He also thinks the next major rev of Mac OS X will help focus investors on the “Mac chapter” of the Apple story. Sales of Leopard, due this spring, will near 10 million for the entire fiscal year, as the company has grown its installed base by 25 percent to 20 million since the launch of Mac OS X 10.4 (“Tiger”) almost two years ago, Munster says. Tiger added US$100 million in revenue to Apple’s June quarter with two million copies shipping in the first month of availability when it was released, Munster adds.

“With the release of Mac OS X Leopard, Mac market share will benefit from upward pressure from slight pent-up demand,” he wrote in note to clients. “Similar to the Tiger upgrade cycle, we expect 40 percent of Mac users to upgrade to Leopard in the first year of availability. Assuming a late April launch, this would lead to Leopard sales adding $130 million to the June quarter.” 

The analyst thinks Apple will sell 2.6 million copies in the first month of availability and approximately nine million copies in the first fiscal year. If he’s right, this would generate US$456 million in revenue during that time (and $130 million to the June quarter).
Munster is confident that Apple in 2007 will gain share overall. He says the company will helped from the industrywide shift toward laptops.

The analyst also said that the CS3 release will have a “halo effect” for professional Mac ales (mainly the Mac Pro) “since CS3 will be optimized for Intel Macs for the first time, many pro users have been waiting for this launch to upgrade from their PowerPC-based systems.” In a note to clients, the analyst said that a 2006 survey of creative pros put the estimated market for Adobe’s CS3 at three million users. Assuming a 15 percent upgrade rate by those users to a new Intel-based Mac Pro or MacBook Pro, Apple could easily sell an additional 450,000 systems based on CS3 alone, Munster says.

This would also also boost Apple margins, as the high-end pro systems carry higher margins than the rest of Apple’s computer line. So, for example,, 450,000 more MacBook Pros sold would translate into a US$900 million perk.

However, in his note to clients, Munster was also dubious that Mac OS X 10.5 (“Leopard”) will prowl in March, as some have predicted. He’s forecasting a May timeframe for the big cat to be unleashed.

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