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AAPL Reaching New Highs
Stocks are down after a strong morning on favourable U.S. economic data (employment, Chicago PMI and GDP). Shares of AAPL, however, continue to rise after reaching new highs yesterday and reaching a market cap of a half a trillion dollars. Investors continue to be focused on iPhone adoption; update to the iPad coming March 7; market share growth of the Mac business (see below); further penetration in China and emerging markets; the evolution and potential re-conception of Apple TV (see below); and platforms such as Siri, iAd, iBooks and Ping. Shares of Apple trade at 9.9x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).Apple To Host iPad 3 Event In San Francisco Next Wednesday (The Loop)
As expected, Apple announced an event to show off the company’s next generation iPad. The invitation says the event will take place at 10:00 am on Wednesday, March 7, 2012 at the Yerba Buena centre for the Arts in San Francisco. You can join us at SAI for live coverage of the event.
Report Claims That Apple Will Launch A New Apple TV Alongside The iPad (9To5Mac)
Reliable sources familiar with Apple’s upcoming iPad 3 product release (see above) have said that the company is also launching a new Apple TV alongside the iPad. Ace reporter Mark Gurman initially reported that Apple would be releasing two major new products in early March, and then believed the product would be a new Apple TV due to mounting code-based evidence for such a product with simultaneous supply constraints. Now, his sources have outright said Apple is launching this J33 (the new Apple TV’s codename) alongside the new iPad. To be clear, this is not a new Apple TV set, but an update to the $99 set top box Apple sells now.
Sprint Committing To Exceed $15 Million iPhone Buy In 2012 (The Next Web)
Despite expecting a decline in wireless profits due to the high subsidy costs, Sprint plans to exceed its $15.5 billion iPhone minimum purchase agreement with Apple and looks to make up for the profit loss with subscriber revenue for fiscal 2011, according to Sprint’s 10-K filing. The company is betting that subscriber dues offset an expected 2012 deficit from the agreement. If each iPhone can be estimated at somewhere around a $630 ARPU, Sprint’s commitment is somewhere around 23.8 million iPhones.
Enterprise Mac Sales Grew Over 50% In The Fourth Quarter (AppleInsider)
Mac business sales grew a massive 50.9% at the end of 2011, easily outpacing Apple’s market leading overall growth in Mac sales. Analyst Charlie Wolf with Needham & Company says that sales in the business market represented 20.5% of total Mac sales in the December quarter. But business sales accounted for 34.9% of year-over-year total shipment growth for the Mac platform. Apple now represents 2.9% of total business PC sales worldwide, more than double its share of 1.3% in the first quarter of 2010. And Apple’s presence in the U.S. is even greater at 5.8%, up from 3.1% in the beginning of the year.
Apple’s Patent Victory In Germany A Blow To Motorola And Google (FOSS Patents)
Apple’s victory in a German appeals court allows the company to keep selling the iPhone and iPad, landing a blow against Motorola and Google. Apple apparently made a patent-licensing terms offer that the court found agreeable. If Motorola turns down that revised agreement, it could pose substantial risks. “Motorola was hoping to gain near-term leverage against Apple and Microsoft through the aggressive pursuit of injunctive relief based on standard-essential patents,” according to patent expert Florian Mueller of FOSS Patents blog. “Google, which was totally in agreement with MMI’s litigation strategy, was hoping to buy that leverage for $12.5 billion.”
Earnings Momentum (And Jim Cramer) Says Apple Doesn’t Have To Issue A Dividend (The Street)
Why doesn’t the dividend matter in Apple? Pretty simple: earnings momentum. Jim Cramer accepts the dichotomy between a growth stock and a value stock. When he buys a value stock, he likes a dividend to help him stay while the value is brought out. Apple is a growth stock. It’s got earnings momentum to earn $55 a share for fiscal year 2012. And in classic earnings-per-share growth analysis, measuring the company’s growth vs. its price-to-earnings multiple, Apple may be the cheapest growth stock he knows.