THE APPLE INVESTOR: iPhone Announcement 1PM ET, Wall Street Going Nuts

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Futures TradersYeah, baby! (But beware selling on the news)

No Really, There Is No Stopping AAPL!
Shares of AAPL continue to post gains, ending Wednesday’s trading session at $240.60. The stock could get another bounce today as the company releases details regarding the new iPhone OS 4.  (As ever, though, beware the buying on the rumour and selling on the news–we would not be surprised to see a short-term dip).  Apple currently trades at the high-end of the tech group at 20x estimated fiscal-year 2010 EPS and 19x Enterprise Value / Trailing Twelve Months Free Cash Flow. Catalysts down the road include March quarter results to be announced after the market close on Tuesday, April 20; March NPD data on Mac unit sales; and the launch of the next generation iPhone likely this summer.

More Bullish Reports From Wall Street Ahead Of The Quarterly Results
The reason this time? iPhone sales.

  • Jeffrey Fidacaro at Susquehanna Financial is raising his estimates for the second time this week based on greater than anticipated iPhone sales combined with better sell-through on Mac and iPods. He reiterates his Positive opinion on the stock and maintains his $275 price-target.
  • Gene Munster at Piper Jaffray is bullish on iPhone sales.  Munster looked at ComScore U.S. smartphone figures to determine that iPhone unit sales could reach 8.3 million in the March quarter versus his estimate of 7.5 million. Upside anyone?

Sony And Nintendo Should Be Worried; iPad Set To Take Over Gaming (Reuters)
The iPad has been on the market for less than a week and it already has 830 video games in addition to the 25,000 iPod / iPhone games already in the App Store. Gonzague de Vallois, executive at Gameloft says “The iPad is the fourth step in the gaming evolution, the first being the microcomputer, the second being the game console and the third being smartphones.” If he’s right, that’s great news for Apple who already has 19% share of the $10 billion gaming market.

Get Ready, Apple’s iPhone OS 4 Preview Starts Today At 10:00am PT (PaidContent)
What should we be looking for at today’s iPhone OS 4 demonstration?

  • Multi-tasking: The ability to run multiple applications at once.
  • Live Widgets: Continual updates not stagnant responses.
  • Distribution / Price points: Will we see the iPhone on Verizon and is there another price drop?
  • Advertising: Details behind the mobile platform, iAd, is rumoured to be unveiled.
  • Content and services: More bundled content.

Apple Already Making A Smaller iPad; The True Kindle-Killer (DigiTimes)
Apple is reportedly developing a 5-7 inch version of the iPad that it will start selling as soon as the first quarter next year. The device will cost less than $400 and will apparently have an even greater selection of “media consumption” features than the current iPad. Henry Blodget at Business Insider believes this device will be the true Kindle-killer. But $400 is still too much. When the price point hits $199, they’ll be everywhere.

iPad Cost Is All About Powering The Touch-Screen (Business Week)
No wonder Apple is suing HTC. In a breakdown analysis of the the iPad, market research firm iSuppli reports that it costs as little as $260 to make the $499 gadget, or a margin of 48%. This cost structure is in line with Apple’s other product lines. The biggest margin-hitting component is the touch-screen display at 40% of total cost. Analysts believe that Apple “may have leeway to combine many of the iPad’s electronic components, or integrate them into the display.” Ultimately, that will lead to cost reduction which could lead to lower prices for the consumer while maintaining profit margins for Apple.

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