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AAPL Ends The Day Up On Light Volume
AAPL shares traded down most of the day on lighter than usual volume (12 million shares versus 19 million 6-month average). A late afternoon rally closed out the session in positive territory at $224.65 or 16.9x estimated fiscal-year 2010 EPS and 17.6x Enterprise Value / Trailing Twelve Months Free Cash Flow (TTMFCF). Upcoming catalysts include continued commentary on iPad sales and trends; the March quarter earnings release (likely around the third week in April); and the launch of the next generation iPhone this summer.
Technical Call: Short Apple For The Next Few Days (The Street.com)
Dan Dicker (The Street.com contributor) is a seller of Apple in the short term. He believes the market is overextended, including AAPL at $225. Technically speaking, the stock is way up there on Bollinger’s technical trading tool, which provides a relative definition of high and low. If the stock goes up from these levels, it would be a small move. But for the next few days, he would be on the short side and investors could see a “healthy” $10-$7 in downside.
Apple And Amazon Fighting For Each E-Book (The New York Times)
Amazon continues to wage war against Apple in the world of eBooks as both companies are fighting on a “publisher-by-publisher” basis. Neither company wants to be undersold while publishers don’t want to be locked into exclusive contracts and want pricing control. Amazon is going after the smaller publishers in an attempt to get them onboard the Kindle before the iPad hits the market. This would give Amazon a nice way to defend its eBook turf, approximated at 90% of the market. At that market share, there’s no where to go but down.
TV Producers To Apple; We’ll Believe There’s A New Market When We See It (The Wall Street Journal)
Apple is struggling to secure TV deals for the iPad. Studios have been pushing back on price-cuts and believe Apple TV may threaten current network revenue streams, among other concerns). The hesitation from media giants has forced Apple to scale back some of its initial intentions for the tablet. That said, if the company has in fact “sold hundreds of thousands of [iPad] units” in the first week the studios will likely be more motivated to come to the table with Apple. You can also bet Wall Street will likely increase its Apple estimates for the year sooner rather than later.
Is Apple Entering Location-Based Services? Let’s Hope It’s Better Than Google Buzz (The New York Times)
A recent filing with the Patents and Trademark Office suggests that Apple is developing a new social networking application or service (iGroups) that would allow a group of users in the same area to chat and share information. While start-up companies (Twitter recently included this feature, Facebook has one on the way and there’s also Loopt and Foursquare) have been successful in this arena, larger tech companies have not (Google, Cisco). Who knows if Apple will ever release the service and if so, if it will be successful.
The App Is The Advertisement On The Smartphone But The iPad Opens Up A Whole New Ballgame (Forbes)
Smartphones are typically terrible ad platforms. However, as 27% of Americans now use an iPhone (according to Outsell analyst Ned May), the apps themselves are proving to be great marketing platforms for big brands like Nike and Kraft. Still, it remains to be seen what Apple will actually do with its $275 million acquisition of Quattro Wireless, but there are clear synergies with the iPhone and forthcoming iPad. Regardless, Apple is beefing up it’s mobile ad team as ad monetization on either platform is a natural extension of the business. According to TBI Research, Google is doing the same.
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