Apple Investor: Let The Apple Estimate Increases Begin!

AAPL Loses Its Footing Last Week As Shares Slide
With short interest increasing, AAPL shares closed Friday’s session down at $222.25 or 16x estimated fiscal-year 2010 EPS and 17x Enterprise Value / Trailing Twelve Months Free Cash Flow (TTMFCF). Upcoming catalysts include analyst reports previewing the March quarter earnings release (likely the third week in April); continued commentary on iPad sales and trends; and the launch of the next generation iPhone this summer.

Let The Estimate Increases Begin! Macquarie (USA) Research Ups iPad And iPhone Units (Macquarie Group)
Apple analyst Richard Choe at Macquarie (USA) Research added 2.5 million iPads to his fiscal year 2010 estimates and raised fiscal second quarter iPhone units to 7.5 million. That increases his fiscal year 2010 revenue estimate by 4% to $57.4 billion and non-GAAP EPS to $12.38, from $11.94. He rates the stock an Outperform with a price target of $250.

China Is Apple’s Next Major Growth Opportunity Says Morgan Stanley Analyst (Fortune)
In a report out late Friday, Morgan Stanley Apple analyst Katy Huberty explains “China represents Apple’s next major geographic growth opportunity.” She sees a 50 million person addressable market with only 1% Apple market share in China currently. The company’s retail store expansion plans could help drive Apple’s share price as high as $325 to $435 within the year, according to Huberty.

Amazon’s App Missing iPad Launch Giving Apple Headstart In eBook War (The New York Times)
Amazon will have an iPad eBook (Kindle) application.  However, it will not be ready for the iPad’s launch because the company doesn’t have access to an iPad to test the application (versus major media partners like The New York Times and WSJ who have been playing with the gadget all month). If new users want books on their iPad, they’ll likely download iBooks from Apple’s proprietary app.  This should give Apple a nice head start in attracting and retaining eBook users.

Apple’s iPhone Platform Still Crushing Its Peers (Business Insider)
Apple’s iPhone App Store has by far the most selection of any app store, giving Apple a huge advantage over it’s mobile competitors. Apple currently has about 170,000 apps while Google Android has about 30,000 and Research In Motion (Blackberry) has only slightly more than 5,000. This advantage should only strengthen as developers gear up for the iPad launch next month.

iPad Unlikely To Outdo iPhone’s Meteoric Launch (Bloomberg)
Most believe initial iPad sales will be strong, but the iPad won’t dethrone the iPhone’s record of reaching 1 million units in 74 days. Because it’s a new device and computing medium, most users will likely wait and see if the gadget fulfils a real need or want before committing $499+. That said, there is no doubt that iPad pre-orders have been rolling in at a steady pace according to various sources, which is a good sign for early demand.

Why Apple Won’t Compete With Google On Search (Business Insider)
Danny Sullivan, editor-in-chief at Search Engine Land, outlines the reasons why Apple won’t build its own search engine. First, building a search engine is extremely difficult (just ask Microsoft), not to mention costly. Then there’s also the issue of Google’s dominance in the market; it’s just too difficult to change peoples’ habits. So where does that leave Apple in the realm of search? While “Apple’s got an enviable reputation for game-changing…I wouldn’t bank on similar success when it comes to search,” according to Sullivan.

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