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Contributors: Douglas McIntyre Jon C. Ogg

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Saturday, September 16, 2006

Weekend Edition: Buy the Rumor, Sell the....Apple?

Today we have had a massive news bombardment from the awaited event from Apple (APPL) for the company's "It's Showtime" product launch. This is not a for phone as some previous speculations had been before we got closer to the event, but iPod enthusiasts and Mac addicts will likely be quite happy for the rest of the year.

We are not saying to sell AAPL at all, and any comments from others about the death of Apple's stock may be from naysayers living in a world of denial. But it is amazing how the old trading adage "Buy the rumor, sell the news" come trues time after time. AAPL shares had been up almost $1.00 today before the "Its Howtime" product details started coming out in a flurry. The shares are now down 0.9% at $71.84, although watch out for serious whipping around in the stock today and tomorrow as key research calls come out with their stock calls.

We have made an attempt to summarize everything we could, and please accept our apologies for cramming all of this into one single short burst document. As noted earlier, iPod enthusiasts and Mac addicts will likely be quite happy for the rest of the year.

What we essentially have is a souped-up iPod product lineup with lower prices: $249 for a 60GB drive and $349 for a 80GB drive. Perhaps the best news is a fix to the most common current complaints about iPods regarding the battery life and the brightness of the screen. The iPod Nano will have packaging that will is about half the current size. A new Nano will run $149 for 2GB, $199 for 4GB, and $249 for 8GB. The new iPod shuffle that has 1GB will only be $79.00.

You will even get to play some games on to be supplied by Electronic Arts (ERTS) in the iTMS suite for $4.99 and there is an instant search feature.

The movies now available on the iTunes store will be available at the same time as DVD sales and will be available from Disney, Pixar, and Miramax. Most titles will be $9.99, and new releases will run $12.99. There is also a new NFL pass that will be available for $24.99 for the season, or individual games can be bought for $1.99.

iTV is what will come out in Q1 2007 as a wireless receiver set-top box ($299) that can import content directly to your television. It will sell movies from Disney and Pixar, as well as others. It is scheduled to be half the size of a Mac. It will have a built-in power supply, an ethernet port, USB ports, 802.11 compatibility for video, HDMI ports, the old stereo/audio ports, and it will be compatible with an Apple remote. There is also some cross platform compatibility promised.

Perhaps the biggest winner here may end up being Best Buy (BBY) as they are perhaps the largest pure-play electronics end seller of all the gadgets. Shares of Circuit City (CC) have come up with Best Buy after Best Buy reported earnings this morning. Click HERE to see what we said. Even RadioShack (RSH) shares are trading up 2% on the day. All of teh old Apple-related supplier and related names are even trading up with Cypress Semi (CY) up 3%, Sigmatel (SGTL) up 4%, and PortalPlayer (PLAY) up 0.6%.

Please understand that these prices may be subjective that were offered by the company, so there may be implied errors here regarding the prices that Apple signaled.

Jon C. Ogg

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