THE APPLE INVESTOR: Apple's Going To $600 This Year

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AAPL Up Strong  
It’s jobs day in the U.S. and the numbers look good however the market isn’t really taking to it, only up marginally. Shares of AAPL up strong relative to the rest of tech. Investors will be looking for the new iPad adoption when it’s available next week; iPhone penetration, especially in China and emerging markets; market share growth of the Mac business; the evolution of Apple TV; and platforms such as Siri, iAd, iBooks and Ping. Shares of Apple trade at 10.2x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).iPad Roundup: Everything You Want To Know (Business Insider)
The summary of summaries:

  • The Name: The new iPad is named, “iPad,” not iPad 3 or iPad HD as many had predicted. Apple did it because, “we don’t like to be predictable.” The next iPhone probably won’t have a name either, but iPhone.
  • Data Plan Pricing: AT&T and Verizon will keep the same data plan pricing for the new iPad, even on 4G LTE.
  • Pre-Orders Are Crashing The Online Store: Apple’s online store is crashing as the world rushes to order an iPad. Not surprising considering it’s going to be difficult to get your hands on one in the initial weeks.
  • iPhoto For iPad: Apple announced iPhoto for iPad. And it’s not using Google Maps.
  • The PC Era Is Over: Apple sold 15.4 million iPads last quarter. That’s more than any PC maker’s total PC sales during the same quarter.
  • iOS Update: The new version includes added language report for Siri as well as an update to iCloud, with support for TV shows and movies.
  • The Most Important Features: A video look at the most important features of the new iPad.

Wonder if the two weeks of new iPad purchases (March 16 through the end of the month) will offset the lack of purchases from people waiting for the new one to launch?

Apple Launches The Revamped Apple TV (Business Insider)
Apple also announced its revamped Apple TV. It’s available on March 16 for $99, the device features a redesigned user interface and support for crystal clear 1080p video. The Apple TV has yet to enter the mainstream in the way that other Apple products have. But Apple TV could follow the iPad into big companies. For companies who have bought iPads for more its workforce, some have been standardising on Apple TV as its projection tool of choice.

Google Pays Apple $1 Billion To Be Default Search Engine (Business Insider)
Apple made $1 billion off Google last year by having it as the default search engine in Safari, says Macquarie analyst Ben Schachter. Schachter wrote his note in response to the fact that Apple seems to be shifting away from Google Maps. Moving away from Google Maps isn’t that big a deal for Google. But what if Apple moved away from Google for search? Would that hurt Google? The answer appears to be no, at least in the short term.

Apple’s Press Conference Showed A Brand unravelling (VentureBeat)
Apple has long been known for its intense focus on consistent branding and beautiful simplicity. Yesterday’s Apple event revealed a certain sloppiness that was absent from former, Steve Jobs-led launches. Just a few minor but glaring inconsistencies: Tim Cook going for the “rumpled executive” look in an untucked shirt, the ambiguous naming of the “new iPad,” the use of a truly horrible pun on a new product’s landing page, and the tie-dyed Apple logo at the presentation’s conclusion. It brings up the impossible-to-answer question: Would Steve have green-lit that? These are the first cracks in what will eventually become a wholesale break with the past.

The Post PC Era Is Upon Us (TechCrunch)
According to Gartner, PC shipments are on track to grow by just 4.4% to 368 million units in 2012, as consumers continue to prioritise purchases of new tablets, and smartphones, ahead of buying new laptop or desktop computers. This is a slight improvement on 2011, when Gartner said that shipments were essentially flat on 2010. “It’s not that consumers aren’t using PCs. They are,” Gartner analyst Ranjit Atwal told TechCrunch. “It’s just that they’re using their current models and not replacing them anymore with new PCs.”

A $600 Price-Target For Apple Is Reasonable For This Year Alone (Bloomberg)
Howard Ward, portfolio manager at Gamco Investors, talks about the outlook for Apple stock. Why are Apple shares trading at the same P/E as Walmart? The stock is already being penalised by the law of large numbers. As the stock has soared this last decade, earnings has gone up more than the stock price, so the multiple has actually contracted. Apple is not only the biggest running back in the NFL, but it’s the fastest. The company is going to generate $40B in free cash flow, or 8% this year. Ward things that Tim Cook is agreeable to a dividend, at a ~2% yield on today’s price. Even at just 14x earnings, gets you to a $600 stock this year.

Busted! The DOJ Looking To Sue Apple Over eBook Pricing (Bloomberg)
The U.S. Justice Department told Apple and five publishers that it’s preparing to sue them for allegedly fixing the prices of electronic books. Specifically, the regulatory body is looking into how Apple changed the way publishers charged for e-books in early 2010 when it was getting ready to introduce its first iPad, probing the possibility of anti-competitive practices in the e-book industry. Some are in talks with the Justice Department to reach a settlement to avoid a court battle.

Apple The Top Holding For Mutual Funds (Bloomberg)
Apple took over from Wells Fargo as the stock most often in the top 10 holdings of the 50 largest mutual funds in the fourth quarter, and widened its lead among the biggest hedge funds, according to Citigroup’s chief U.S. equity strategist, Tobias Levkovich. Apple was a top-10 holding for 18 of the 50 largest U.S. mutual funds in the period. “The 30 most held stocks for hedge funds shifted more heavily” to technology, Levkovich said. “Apple remains the most-held stock for both growth and value hedge funds as well as for growth mutual funds while Wells Fargo remains the most owned for value oriented mutual funds.”

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