Apple Investor: Apple Will Be Counting The Cash As Verizon & ATT Duke It Out

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AAPL Shares On Fire, Market Cap Closing In On MSFT (Fortune)
AAPL shares continued to rise yesterday, closing the session at $235.85 (20x estimated fiscal-year 2010 EPS and 19x Enterprise Value / Trailing Twelve Months Free Cash Flow). Apple market cap has now left Walmart and Berkshire Hathaway in the dust as it closes in on Microsoft. Upcoming catalysts include the launch of the iPad on Saturday; analyst previews of the March quarter (likely raising earnings estimates); March NPD data on Mac unit sales; the launch of the next generation iPhone this summer; and the Verizon launch anticipated later this year.
 
Apple Starting A Carrier Fight Between AT&T And Verizon (The Wall Street Journal)
Martin Peers at The Wall Street Journal believes Apple puts itself in a win-win situation by opening up the iPhone to Verizon. Why not pit the largest U.S. carriers against one another? It also makes the iPhone available to Verizon’s 91 million users (versus AT&T at 85 million). While AT&T and Verizon duke it out, Peers believes Apple will be the one “counting the cash.”

Verizon Represents The Largest iPhone Opportunity Says Analyst (Citigroup)
Citigroup analyst Richard Gardner believes that “Verizon’s 85-90M subs represent the single largest untapped opportunity” for the iPhone. Gardner also believes his current calendar 2011 iPhone estimate is conservative. He reiterates his Buy rating on the stock and $300 price-target.

Sorry Magazines, The iPad Won’t Save You (TBI Research)
Rory Maher at TBI Research issued a report this morning detailing why the iPad won’t save the magazine industry. The basis for his thesis:

  • Mobile ad revenue won’t be material for years.
  • Magazines, in the near-term, will need to look to subscription revenue to drive incremental profits.
  • Even if iPad sales wildly exceed expectations and users rush to purchase lots of magazine subscriptions (we don’t think they will), this will not be enough to drive meaningful revenue at most magazines.

Will Apple Trade Less iPhone Margin For Market Share? (CNBC)
Larry Kudlow talked with Jon Fortt of Fortune Magazine yesterday about the possibility of the iPhone being officially released on the Verizon network. Jon said while Apple is making a CDMA phone that will work on Verizon’s network, he is sceptical that the company will actually give it to Verizon to sell to its network. Apple gets paid a lot for exclusivity from AT&T (~$6.50 per phone). So, If Apple releases the iPhone on the Verizon network in addition to AT&T it will mean less money per phone so the question becomes, is it worth it to make less money per phone but gain market share?

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