Analysts Predict New Successful Apple Products in the Near Future

It looks like analysts have high hopes for Apple’s success in the future; those from investment bank UBS said this week that sales of Macs this holiday could be better than expected. That in combination with Apple’s upcoming product introductions which could include an ultra-portable notebook and pay-per-view movie service made the analysts raise their estimates and price target on the company.

“Given general concerns about the economy, we are frankly surprised by the ongoing strength of the Mac franchise right now and the prospects for new products we are hearing about for next year,” analyst Ben Reitzes wrote in a research note. “With regard to the near-term, checks show very solid holiday demand, particularly with Macs, outpacing our prior expectations.”

Reitzes, who along with his team recently surveyed over 30 Apple retail stores, said the “Mac phenomenon” should have a positive impact not only on the company’s systems hardware revenue, but also peripherals, software and overall company gross margins.

The analyst anticipates that Steve Jobs will use his January 15 keynote at the MacWorld Expo in San Francisco to unveil several new products and technologies, which could include a “new iPhone model, an ultra portable PC platform and even possibly a pay-per-view movie service” among other things.

“We first outlined the possibility of ultra-portable devices from Apple in June 2006,” he said. “However, it is important to note that we think these compelling ultra-portable Macs don’t seem to be adequately reflected in analyst models at this time.”

As a result, Reitzes said he believes this new product category could make his estimates conservative over the long-term and help offset any potential slowdown in the iPod market due to market maturation and potential saturation of the digital media players in the US.

“Regarding features in the ultra-portable, we believe Apple would be looking at integrating the ‘touch’ capability from its iPhone into the ultra-portable device with Leopard obviously as the OS,” he said. “We believe Apple would only enter this market if its devices could be priced in the $1,500 range.”

Meanwhile, Reitzes also speculates that the company’s iPhone announcements next year could involve a watered-down version of the iPhone with a lower price tag, as well a 3G model.

“Our checks continue to indicate solid demand in the US following the $200 price cut with significant interest into the holidays,” he said. “Should Apple introduce another lower-priced iPhone in the $200-$250 range, we believe we could see another significant pop in unit sales not unlike what happened to the iPod when the mini was announced in 2004.”

Finally, Reitzes advised clients that his current iTunes estimates may prove conservative given the possibility that Apple could introduce a new “pay-per-view” movie service and additional content partners.

Such a service using the company’s digital rights management software is possible and could also work in helping entice additional movie content providers to join iTunes. Perhaps rental fees could be a fair $2.99 or $3.99.

In terms of new products, the analysts believe Apple is working on improvements for Apple TV, perhaps adapting the concept and focusing on advanced and increased networked storage for the home – which could be accessed by a computer or a TV.

It is also possible at some point for Apple to enter the HDTV flat-screen business, with built-in Apple TVs and hard drives.

For the current December quarter – Apple’s fiscal first of 2008 – Reitzes now expects the company to earn $1.56 per share on sales growth of 32.5% to $9.4 billion, still factoring in iPod unit growth of 17% year-over-year and 2.1 million iPhones, but now including increased Mac unit growth of 40% yearly to 2.24 million units.

The analyst also raised his 12-month price target on Apple to $235 per share, up from $220.