THE APPLE INVESTOR: Apple Expected To Blow The Doors Off Tomorrow’s Earnings Announcement

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AAPL Rising Ahead Of Tomorrow
U.S. stocks are rising, following optimism that the European debt crisis is ending and that Greece will reach a deal despite Moody’s downgrade. Shares of AAPL, now twice as valuable as GOOG, are up strong ahead of earnings. Catalysts for the stock include holiday quarter results released tomorrow January 24 at 5:00pm ET; iPhone upgrade cycles and adoption; update to the iPad; continued market share growth of the Mac business line; further penetration in China and emerging markets; the evolution and potential re-conception of Apple TV; and platforms such as Siri, mobile advertising (iAd), books and publishing, gaming, mapping and social (Ping). Shares of Apple trade at 9.6x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).Apple Reports Earnings Tomorrow After The Close (Silicon Alley Insider)
Join us for LIVE coverage and analysis of Apple’s holiday quarter earnings announcement. Consensus estimates are $38.7 billion in revenue with EPS of $10.00.

Analysts Preview The Quarter, Here’s What To Expect (Various)
Everyone agrees. The company should exceed Street expectations:

  • Deutsche Bank: Analyst Chris Whitmore expects Apple to beat Street consensus driven by robust iPhone demand outstripping supply in many geographies. His 28 million unit estimate will likely prove conservative. iPad and Mac strength continues and should more than offset a negative foreign exchange (FX) swing. He expects gross margins to beat (40%) due to weak commodities and a mix shift towards the higher-margin iPhone. He reiterates his Buy rating.
  • Jefferies & Co.: Peter Misek believes that iPhone shipments of 35 million are possible during the quarter. He sees a strong product cycle (iPhone 5, iPad 3, iTV) going into the calendar year and is raising estimates and increasing his price-target to $550. He reiterates his Buy rating.
  • Bernstein Research: Toni Sacconaghi is looking for $39.4 billion in revenue and EPS of $10.57 driven by sales of 31.9 million iPhones (up 97% year-over-year), 13.6 million iPads (up 85%), 5 million Macs (up 22%), and 13 million iPods (down 33%). The biggest upside swing factors are likely to be iPhone device inventory and gross margins. He advocates investors maintain long positions. Apple remains his top stock pick with an Overweight rating and $550 price-target.
  • UBS: Maynard Um expects Apple to print its best holiday quarter in history beating Street estimates due to the launch of the iPhone 4S, accelerated international launches (carrier and country), lower price points for iPhone 4/3GS and healthy demand for the iPad. He believes the HDD shortage in Thailand likely had a minimal impact on Apple’s Mac supply. He maintains his Buy rating and $510 price-target.
  • Pacific Crest: Andy Hargreaves agrees that results should exceed Street estimates. Sustained iPhone demand and channel inventory fill will likely drive estimates higher. That said, timing of new iPad launch will be critical to next quarter guidance and estimates. He continues to recommend owning the stock and believes the company’s differentiated software and services stack can protect margins. He maintains his Outperform rating and $470 price-target.

And there you have it.

Apple Given The Green Light To Open Retail Stores In India (Livemint)
Apple may open its retail stores in India following the Indian government allowing full ownership of single-brand retail stores by foreign companies. Apple has been in discussions with the department of industrial policy and promotion (DIPP) for some time and is keen to re-enter Indian market after an earlier bid to do so in 2006. According to an official close to the news, “They have not told us how many stores they will open. We have made the policy. The doors are now open.”

Apple Bringing Its Store To Another World Famous Store, Harrods (9to5Mac)
Apple is looking to bring the Apple Store within a store to a new region: The U.K. And not just a standard consumer retailer with many locations like Target, but a world-famous and exclusive attraction – Harrods. The Harrods Company covers over 5 acres of land and features over one million square feet of selling space with over 330 departments. The store will be small in physical size compared to Apple’s other notable stores, but it will be much larger than the typical Apple store-in-store.

Should Apple Make Its Products At Home? (The New York Times)
Not long ago, Apple boasted that its products were made in America. Today, few are. Chinese factories are far more nimble than American factories. An anonymous Apple executive has said the company “shouldn’t be criticised for using Chinese workers” because “the U.S. has stopped producing people with the skills we need.” And Apple makes more per employee than Goldman Sachs, Google and Exxon. Apple’s products are designed and marketed in America, should it have a moral obligation to put that money to work at home?

New Report Shows Android Market Share Double That Of Apple (iGR)
A new report from market research firm iGR states that 47% of U.S. smartphone owners have Android devices while 24% own Apple’s iPhone. That’s nearly double. Samsung is the most popular brand among Android users in the U.S. And 27% said Google’s reputation was a key factor when they made the decision to purchase an Android phone.

Apple Bringing Out The Big Guns To Battle Android (All Things Digital)
Two important developments in Apple’s legal spat with Samsung: First, a German court handed the South Korean company a setback, rejecting one of the seven patent infringement claims it had brought against Apple. Second, Apple has decided to assert its slide-to-unlock patent against Samsung’s Galaxy Nexus. This is the first time Apple has fingered the Nexus as an infringing device. Not only is the Galaxy Nexus one of Samsung’s hero smartphones, it’s also Google’s Android 4.0 reference device.