Piper Jaffray’s Gene Munster has worked his magic on the raw market share data released Monday by the NPD Group, and he sees a silver lining in a lot of negative numbers.

The NPD data relevant to Apple’s (AAPL) product lines show:

• Mac units down 3% year-to-year and their average selling price (ASP) flat.
• iPod units down 18% year-to-year and ASP down 7.5%.

From this Munster finds:

• A “positive” for Apple shares in the Mac numbers. He was expecting NPD to report units down 2% to 5% in May, but he expects them to pick up in June following last week’s price cuts. The Street is expecting Mac sales to end the quarter down 8% for the year and Munster was expecting them to be down 4% to 12%. NPD’s new data, and the appeal of the new MacBooks, leads him to think Apple could beat those expectations.
• The iPod numbers, Munster writes, are “in-line” with expectations, although he had estimated that they would be down 5% to 10% and in fact they were much worse — down 18% for May. Average selling price was worse too, down 7.5% versus his estimate of 7%. But Munster estimates that by the end of quarter, Apple will have shipped 9.5 million to 10.5 million iPods, in line with the Street’s estimate of about 10 million. Moreover, he is expecting iPod shipments to accelerate in June, tied to the free iPods Apple is giving students who buy the new, lower-priced MacBooks. He also expects ASPs to grow a bit — to 7% — by the end of June thanks to the new, higher-priced iPod shuffles that began shipping in mid-March.

Munster is sticking with his buy rating for Apple with a target price of $180 a share.

It came up briefly at CES in January when a Palm (PALM) representative let the cat out of the bag (see here). Nobody followed up.

But with more and more Palm Pres appearing in the wild — in the hands of Palm employees, Elevation partners, one of my high-school buddies, even the Boy Genius — we can now confirm this little secret:

Plug a Pre into a Mac and it syncs, seamlessly, with Apple’s (AAPL) iTunes.

In fact, the iTunes Store treats the Pre just as it would an iPod or an iPhone with one two exceptions: it can’t handle old copy-protected songs or, naturally, iPhone apps.

Third party programs that sync music with various non-Apple MP3 players — including the Palm Treo and 700p –  have been available for some time. But team Pre has apparently built the necessary code right into the device’s firmware.

They certainly have the know-how. The team is chock-a-block with former Apple employees and is led by Palm president Jon Rubinstein, who built the original iPod for Steve Jobs.

How Apple legal will respond to a presumably unauthorized invasion of their music store remains to be seen.

Asked about the Pre during a quarterly earnings call in January, COO Tim Cook said Apple would use whatever weapons it has at its disposal to fight companies that rip off its intellectual property.

An Apple spokesperson, reached for comment earlier this week, would only say that the company does not respond to rumor and speculation.

UPDATE: From John Paczkowski’s coverage of the Pre demo given Thursday afternoon by Palm’s Jon Rubinstein at D7: All Things Digital:

• Plug the Pre into a PC and you’re offered the option of using the device as a USB drive, charging it or beginning a “media sync.” Interesting, using media sync the Pre does indeed sync with iTunes, though it’s hamstrung by Apple’s DRM protected songs. Can’t imagine Apple’s too happy about that. Presumably, Apple legal is already drafting a letter. Pre appears to make iTunes think it’s an iPod.
• How is Apple going to feel about that, asks Walt. Rubenstein dodges a bit noting that there are a variety of ways of getting music out of iTunes. Walt pushes back pointing out that this is the first non-Apple device that is recognized as an Apple device by a Mac. Rubenstein dodges again. McNamee jumps in, refers to Apple as a monopolist and says people should be able to use music that they purchase in what ever way they see fit.
• Media sync feature also works with iPhoto and syncs photos to the Pre. That’s not likely to go over well at Apple either.

For an explanation of how the Pre does this — and how it is different from how, say, RIM and Nokia translate iTunes library files — see Jon Lech Johansen’s primer here.

UPDATE 2: Palm lists “Palm Media Sync” first among the features it trumpets in its post D7 press release:

Palm media sync is a feature of webOS that synchronizes seamlessly with iTunes, giving you a simple and easy way to transfer DRM-free music, photos and videos to your Palm Pre.⁽²⁾ Simply connect Pre to your PC or Mac via the USB cable, select “media sync” on the phone, and iTunes will launch on your computer desktop. You can then choose which DRM-free media files to transfer.

See also:

• Apple vs. Palm: Geeks with grudges
• Palm Pre set to upstage Apple iPhone on June 6
• Palm Pre launch plans leaked
• Palm Fights Back (Against Apple)

Piper Jaffray’s Gene Munster puts a positive spin on it, but his analysis of retail data issued Monday afternoon by the NPD Group suggests that the Mac, whose sales declined year-over-year last fiscal quarter for the first time in nearly six years, will be joined next quarter by the iPod.

In a note to clients, Munster reports that NPD shows Mac unit sales down 1.8% between March and April and iPod sales down 9% in the same period. Average selling prices were flat for the Mac and down 11% for the iPod product line.

Based on this data and his estimates of online and overseas sales, Munster now projects that Apple will sell between 2.1 million and 2.3 million Macs in its fiscal Q3, which ends in June, and between 9.5 million and 10.5 million iPods.

That’s down from the 11 million iPods Apple sold in the same period last year and represents the first year-over-year decline in iPod unit sales since Apple (AAPL) launched its hot-selling music player in Oct. 2001.

But as Munster notes, both sales estimates are in line with the Street’s expectations, and the April numbers for Macs in particular are better than he expected, given the dismal economic climate.

“We see this as a positive data point,” he writes, “given the uncertainty surrounding continued strength following the new desktops launched in March.”

The NPD Group gathers proprietary retail data every month on a variety of products and sells the information to clients, including Piper Jaffray.

Among the analysts who track Apple, Munster has proved particularly skilled at making sales projections based on their data. He argues that NPD is a strong leading indicator, and supports that contention with a chart comparing NPD’s Mac estimates with actual sales:

He’s the son of a veterinarian, the oldest of four rambunctious siblings, and has been reading the Wall Street Journal since age 11, according to various online biographies. He grew up outside Philadelphia’s Main Line, near both old money and Amish frugality. He got a degree in economics from the University of North Carolina, married his wife Lynne and took a job at Atlanta’s second-largest global investment firm. He has written two books, hosts a local talk radio show, writes a column for the New York Daily News online, and runs a website filled with enthusiastic financial planning advice. (We counted a dozen exclamation points on his home page alone.)

But Wes Moss’ main claim to fame, until now, was his stint on The Apprentice with Donald Trump. He was fired half-way through the second season for ceding control of a Levi jeans photo shoot to a woman who, in his words, “flew into the studio on her broomstick.” In the boardroom Trump canned them both — the show’s first double-firing. “I would have at least liked my own cab,” Moss quipped on the way home.

Today he is the face of Microsoft’s (MSFT) Zune digital music player and star of Redmond’s latest Apple (AAPL) attack ad. As with the Laptop Hunter series, Microsoft goes directly for Apple’s pecuniary jugular, stacking the cost of filling a 120GB iPod with songs purchased from the iTunes Store ($30,000) against the cost of a monthly Zune Pass subscription ($15).

“People worry about the capacity of their iPod,” Moss says on screen. “What about the capacity of their bank account? At a buck a song, they’ll run out of money way before they run out of space.” (See video below.)

It’s a catchy spot, delivered by Moss with plenty of exclamation points. But it’s really an argument between two business models — à la carte vs. subscription — that the market has so far settled in Apple’s favor.

And once again, there are holes in Microsoft’s argument large enough to drive an army of Apple blogs. Here’s Emil Protalinski’s take on it in Ars Technica:

“So where does Microsoft get the $30,000 number? Well, seeing as the 120GB iPod appears in the ad, I’m thinking the company is estimating each song at about 4MB, which really isn’t much of an exaggeration. Of course, it’s not exactly $15 versus $30,000. The $15 is a monthly fee, so you’re likely going to be paying more if you plan on playing music for more than a month. That said, it would take you 166 years and 8 months to shell out $30,000 for the Zune Pass; many of us won’t be living that long.

“As of November 2008, the Zune Pass allows its users to keep any 10 songs per month. In other words, if you wanted 30,000 songs for keeps, just like the iTunes Store, you would have to wait 250 years. The cost would be a whopping $45,000, however. In other words, it’s only really worth it if you’re OK with the fact that you have to keep paying the monthly fee to keep access to the songs that you don’t yet own. Otherwise, iTunes (or any other à la carte model) is the way to go.”

Worth a visit: Moss’ ZunePass MAX’D CALCULATOR. As you adjust the capacity of your iPod from 4GB to 120GB, the image changes, with swooshy sound effects, from tiny shuffle to big black classic. Cool.

See also:

• How Microsoft put Apple users on the defensive
• All about Microsoft’s ‘Lauren’
• Behind Microsoft’s ‘Apple tax’ gambit
• Is the Apple press falling into Microsoft’s trap?
• Apple slams Microsoft with rubber chickens

Below the fold: The Zune Pass ad, via YouTube.

No analyst we know of correctly predicted Apple’s (AAPL) second fiscal quarter results for 2009, in which the company proved that computer makers don’t have to slash prices or build “junky” $400 netbooks to weather an economic storm. But some analysts did better than others.

Who did best?

Let’s look at the numbers. The table below represents the estimates of all the Wall Street analysts whose numbers we could get our hands on, as well as those of three of the most prominent blogger analysts. (We could have included lots more bloggers; everybody these days seems to have an Apple earnings spreadsheet in their hard drive.)

In our chart, the actual results and the most accurate estimates are highlighted in green. The worst estimates are highlighted in red. There were several ties.

The professionals and the bloggers scored roughly the same — which in itself tells you something. As usual, the bloggers were more bullish than the pros, but this quarter Apple’s actual results in most categories blew past even the most optimistic of the bulls.

It will pain some readers to hear this, given his bottom-of-the-barrel target for Apple’s shares ($95), but the blue ribbon goes once again to Mike Abramsky of RBC Capital, usually considered a Research in Motion (RIMM) bull and an Apple bear. He scored two greens and no reds this quarter. (Last quarter, when his price target was $70, he beat the field with three greens.) [UPDATE: CNBC's Jim Goldman reports that Abramsky reversed himself after that earnings report and has now slapped a $165 per share target on Apple.]

Tied for second place are Piper Jaffray’s Gene Munster and Financial Alchemist’s Turley Muller, with two greens and one red apiece. Muller gets the edge in our book because he  hit so close and Munster missed so badly — and inexplicably — on Apple’s earnings per share.

Yair Reiner gets special mention for having nailed that surprising high iPhone unit sales number (3.8 million).

In the department of strange bedfellows, Andy Zaky of Bullish Cross — who never tires of berating the professional analysts for misunderstanding Apple, and has often singled out Morgan Stanley’s Kathryn Huberty for special opprobrium — ended up tied with Huberty in the iPod division, missing the actual number by nearly 500,000 units, but coming closer than anyone else in our chart.

And we can’t close without pointing out that among very worst predictions for the quarter were those offered by Apple COO Peter Oppenheimer, whose guidance numbers missed actual revenue by $360 million and EPS by $0.33 to $0.43 a share. Talk about conservative guidance!

For those readers who submitted estimates that I didn’t include here, you know who you are. Feel free to reiterate them in the comments.

Apple’s detailed earnings results are available in its press release. An audio webcast of the earnings call with analysts is available here and Seeking Alpha has published a transcript.

Barron’s Eric Savitz has published a round-up of analyst reactions to the earnings report — including Abramsky’s upgrade — here.

See also:

• Live from Apple’s Q2 earnings call
• 5 key quotes from Apple’s earnings call
• Apple’s Q2: A test of fundamentals
• Apple Q1 earnings: Analyzing the analysts

Apple (AAPL) on Wednesday posted sharply higher revenue and earnings in its second fiscal quarter of 2009, beating both its guidance and analysts estimates.

iPhone sales were particularly strong — up 123% year to year — and seem to have offset a 3% decline in the Mac division.

The headlines from the company’s press release:

• Revenue: $8.16 billion, up 8.16% from $7.94 billion in Q2 2008
• Profit: $1.21 billion, up 15.8% year to year from $1.045 billion
• EPS: $1.33 per diluted share up 14.6% from $1.16
• iPods: 11.01 million up 3.3% from 10.644 million
• iPhones: 3.8 million, up 123% from 1.7 million
• Macs: 2.22 million down 3% from 2.289 million
• Gross margin: 36.4%, up from 34.7% in Q1
• non-GAAP revenue: $9.06 billion, including deferred revenue from 7 quarters of iPhone sales
• Guidance for Q3: Earnings of $.95 to $1 on revenue of $7.7 to 7.9 billion

CFO Peter Oppenheimer’s canned quote: “We are extremely pleased to report the best non-holiday quarter revenue and earnings in our history.”

That 36.4% gross margin is actually quite impressive, particularly in this economy. It must make the PC makers fighting over the razor thin profits in the netbook market crazy.

The conference call:

5:03 p.m. ET: Were in.

5:04: Peter Oppenheimer is going over the numbers summarized above.

5:05: Talking about how difficult it was to compare Mac sales, given the 50% growth last year. “Very positive about Mac performance.”

5:06: Touts iLife and iWork.

5:07: iPod sales. “Strong sales” of iPod touch, but no numbers. Share of MP3 market over 70%, according to NPD. iPod sales growth in Europe, Australia and China.

5:08: iTunes sold developments. App store. Over 35,000 applications. This is a new stat. Close to 1 billion downloads (but no cigar today).

5:09. iPhone. Now in 81 countries. Rev recognition $1.52 billion, up more than 300% from last year. Repeating what’s new in iPhone 3.0. Deferring rev. on all iPhones sold after March 17.

5:11: Stores. Now 252 stores, one new this quarter. Rev. 1.47 billion, up from 1.42 billion, but average sales per store was down: $5.9 million down from %7.1 million.

5:13: Gross margin discussion. Why up? Commodity costs. Higher-rev products. Etc. He’s losing me.

5:13: Cash discussion.

5:14: Guidance: Forecasting is “challenging.” Rev: 7.7 billion to $7.9 billion. GM: 33%. OpEx $1.35 billion. Tax rate: 31%. EPS”: 95 cents to a dollar.

Confident. Pleased. Etc.

5:16 Q&A below the fold.

See also: Five key quotes from Tim Cook.

One of the things that distinguishes Gene Munster’s coverage of Apple (AAPL) from the other analysts who follow the company is that he actually leaves his office, goes into Apple stores, and counts sales.

Last week, he and his colleagues at Piper Jaffray spent a total of 25 hours visiting a sampling of Apple stores around the country — both mall outlets and flagship stores — where they recorded how many iPhones, Macs and iPods they observed being sold.

On Wednesday, he released the results of those counts — and his analysis of what they mean for Apple’s fiscal Q2 results, due out on April 22.

Bottom line: Although sales are down across the board, Munster expects them to meet or — in the case of the iPhone — significantly beat the Street’s expectations. In particular:

• iPhone: Munster’s team counted a weighted average of 22 iPhones being sold per day — well below both July/Aug ‘08 (95 per day) and Nov. ‘08 (28). Although that suggests a 15% drop from Q1, or 3.7 million iPhones for the quarter, Munster estimates that when international sales are factored in, Apple may meet his target of 4.4. million units for the quarter. The Street is expecting 3.3 million.
• Mac: The 28 Macs that Munster’s team counted is considerably above the number his model predicts, but March sales were boosted by the arrival of desktop models that weren’t available in January and February. Adjusting for the difference, Munster estimates that Apple finished the quarter having sold 2.2 million Macs, up slightly from the Street’s expectation of 2.1 million.
• iPod: This was the first time the Piper Jaffray team monitored iPod sales, so it doesn’t have previous counts with which to compare the results. But Apple was selling twice as many iPods as iPhones last week, in line with the Street’s estimate of about 10 million iPods for the quarter.

Munster tends to be more bullish on Apple than most analysts. Although he lowered his $240 price target when it was clear that the company wasn’t going to release new iPhones in January, his current $180 price target is one of the highest in the business. The stock closed at $118.31 on Tuesday.

The Apple (AAPL) numbers released by the NPD Group Monday were even worse than those predicted by Piper Jaffray’s Gene Munster last week, yet he sees them as “a neutral or a slight positive” for the stock, given the uncertainties surrounding the entire computer industry this quarter.

NPD reported Mac and iPods sales both down 16% year to year in February, according to a report issued Monday to Piper Jaffray clients.

Analysts had expected both numbers to be down (although not quite that much), given how strong sales were in February 2008 and the fact that many Mac customers were holding out for the new machines that didn’t get introduced until March 3. The Street was anticipating -4% growth in the February NPD Mac data, according to Munster.

Adding in overseas sales (which NPD does not measure), Munster now expects Apple to sell 2.0 to 2.2 million Macs by the end of the March quarter. He also estimates that the company will sell 9 to 10 million iPods in that period, in line with the Street’s consensus of 9.5 million iPods.

As he did last week (see here), Munster says he thinks Mac sales will pick up in the last month of the quarter, thanks to the shipment of new iMacs, Mac minis and Mac Pros.

He also expects iPods to sell better in March, bolstered by the new iPod shuffles unveiled last week.

Finally, addressing the iPhone 3.0 special event scheduled for 10 a.m. PT (1 p.m. ET) Tuesday, Munster says he expects “significant new features” but no new iPhone hardware. Nor does he expect Steve Jobs, who is still on medical leave, to make an appearance at the event.

See also Mac sales bottomed out in February, says analyst

January was a slow month for Apple (AAPL) — even slower than Wall Street thought it was going to be.

Mac unit sales were down 6% compared with last January, according to NPD data released Tuesday. iPod sales fared even worse, down 14% year to year.

The Street was expecting Mac sales to be off by only 4% and iPod sales off 11%, according to Piper Jaffray’s Gene Munster.

In a report to clients issued Tuesday afternoon, Munster estimated that Mac sales for the March quarter (Apple’s second fiscal quarter) will be somewhere between 2 and 2.2 million units. iPod sales should come in around 9 to 10 million units.

Putting an optimistic spin on the data, as he is wont to do, Munster saw the Mac numbers as “a neutral or slight positive” given the general uncertainty about the whole economy this quarter.

But, he adds, February and March could be “a tough comparison” for the Macintosh, because Mac sales last February were bolstered by the launch of the MacBook Air. There is no comparable MacBook launch expected this February.

Munster also found something to cheer about in the iPod numbers, even though he now expects unit sales to fall 6% to 15%  by the end of the quarter. “Given concerns regarding iPod  weakness,” he writes, “we believe the segment’s in-line performance relative to  Street expectations is a positive.” He was also pleased by the average price for iPods in January, which was up 4%. He had expected it to fall 3%.

Acknowledging that it’s difficult to extrapolate iPod sales prices from one month of NPD data, Munster thinks they may have risen because the contribution of higher-priced iPod touches in the mix “may exceed our expectations in the Mar quarter.”

Munster maintains a buy rating on Apple shares with a target of $180, one of the highest in the business. The stock closed Tuesday at $94.53, down 4.67% for the day.

How will Apple (AAPL) persuade 100 million iPod users to trade up to an iPhone? That’s the problem Bernstein Research’s Toni Sacconaghi tackles in a report to clients Wednesday.

His answer: Make an iPhone that comes without a data plan — currently $30 a month in the United States.

The opportunity for Apple is so attractive that he puts the odds of such a thing coming to market before the end of the year at better than 50-50.

Sacconaghi’s premise is that the market for stand-alone music players is shrinking and will continue to decline over time — eventually going the way of the Palm Pilot — as users trade their iPods in for cell phones that can also play music.

For the vast majority of those iPod users, the iPhone is simply too expensive — not because of the $199 starting price, but because of the required voice + data service plan ($70+ per month, or roughly $1,700 over the life of a two-year contract) that Sacconaghi describes as “the biggest gating factor to mass market adoption.”

The numbers involved are huge. The worldwide market for smartphones (i.e. phones that require a data plan) is estimated to be about 225 million in 2009. But that’s just 17% of the total 1.35 billion mobile handset market. (See Exhibit 1.) In other words, Apple is effectively not participating in 83% of the mobile handset market place.

The irony, Sacconaghi contends, is that Apple is in a unique position to grab a hefty slice of that pie.

“Apple’s more than 100 million iPod users give the company a huge opportunity to capture significant market share in the mobile device market, if it can successfully migrate these users to the iPhone. We note that these users would likely be very partial to migrating to an Apple offering, given their familiarity with iTunes and purchases of DRM encoded content.”

So what would an iPhone without a data plan look like?

Apple, as usual, isn’t talking about future product plans, and “the blogosphere,” says Sacconaghi, “also appears to have little credible insight.”

But the two solutions he proposes — an “iPhone nano” and an “iPhone touch” — are not that different from the ideas the rumor sites have been kicking around for months.

• iPhone nano: A miniature iPhone that plays music and videos, but has a small screen and can’t browse the Net or run iPhone apps. $100, with subsidy.
• iPhone touch: Today’s iPod touch with a cellular modem. Can make calls and play apps, but may not have 3G or a GPS. $150, with subsidy.

Sacconaghi is convinced either one of these approaches would enable Apple to capture 3% of the non-smartphone mobile handset market (compared with its current 12-15% of the smartphone market). Even assuming 100% iPod cannibalization, Apple makes out like a bandit, according to Sacconaghi:

“[For] every iPhone nano sale, Apple essentially trades about $125 in revenues (assumed wholesale price) for $250, and $44 in gross profits for $130. For the iPhone Touch, Apple would be trading about $200 in revenues for $350, and $70 in gross profits for $150.”

It’s all laid out in the Bernstein Research spreadsheet (Exhibit 3) pasted below the fold.