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AAPL Off As Google Sinks Tech
The market is recovering from earnings misses by GE and Google. That said, shares of AAPL are off with the rest of technology. Catalysts for the stock include holiday quarter results on Tuesday, 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 (see below), gaming, mapping and social (Ping). Shares of Apple trade at 9.7x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).Macs Are Landing On More Corporate Desks (AppleInsider)
In a report from the Wall Street Journal, General Electric’s CTO recently said that the company’s support of Apple’s iPhones and Macs for employees is a recruiting positive, which communicates to candidates that it is a “contemporary company.” Another sign that Apple is continuing to grow in the enterprise market. GE has also been operating a pilot project testing out Apple’s Mac notebooks and desktops for its employees for over a year and has about 1,000 Mac users. With 300,000 employees, that’s a lot of upside.
Another Analysts Ups Estimates, And Thinks Guidance Will Be Healthy (Various via Scoople)
Analyst Mike Abramsky at RBC upped its price target for shares of Apple to $525 on expectations that the company will solidly beat estimates for the holiday quarter and offer healthy guidance. He expects Apple to announce $40.2 billion in revenue and $11.00 earnings per share, up from prior projections of $38.6 billion and $10.00 EPS. Abramsky believes Apple will report fiscal second quarter guidance of $32 billion in revenue and $8.00 EPS, slightly above the Street currently.
Mac Sales Will Be Fine, China Growth Still Strong (AppleInsider)
Analyst Ben Reitzes with Barclays Capital is not concerned by the recent NPD data that some have interpreted as slower-than-expected Mac sales growth in the U.S. Reitzes still believes Apple’s total global sales will be up 22% year-over-year, thanks to rapid expansion in China. Industry sources indicate that Mac sales grew faster in China last quarter than they did in the U.S. Mac sales will benefit “from new stores in China and strong sales of the MacBook Air.” And that’s while everyone else tanks.
Apple Reveals A Three Pronged Plan To ‘Reinvent’ Education (Business Insider)
Apple revealed plans to ‘reinvent the textbook’ through new applications and software.
- iBooks Author: A free application for the Mac that allows professional and independent authors to easily make books which can then be uploaded to the iBookstore. The books can be trade books like novels, or textbooks filled with interactive graphics.
- iBooks 2: New e-textbooks that can display interactive, graphic-rich textbooks.
- iTunes U Application: Allowing teachers to set up lesson plans, and lectures for students; a digital course syllabus.
All of this stuff is neat, but not everyone has an iPad.
Reaction To Apple’s Education Announcements Isn’t Great (Business Insider)
Silicon Alley Insider weighs in:
- Apple At Its Worst: iBooks Author’s End User licence Agreement (EULA) states that books made with the iBook Author app and sold through the iBook store can’t be sold anywhere else. The EULA is claiming a right not just to its software, but to its software’s output.
- This Won’t Set The Education World On Fire: Nothing presented was particularly transformative or even likely to make a big splash in the massive education market given the supply (textbook publishers) still has complete control over the demand (students).
- Apple’s Plan Stinks: For all the good Apple is enabling with iBooks, it’s also presenting a rather flawed vision for the future of education. Namely, iPads are expensive, it might not even be legal and not everyone is an Apple fanboy.
- One Glaring Problem: In testing one of the new textbooks for iPad, which only had two chapters, the file is huge. Almost a full GB for just a fraction of a textbook and it took about 10 minutes to download. Hopefully the iPad 3 comes with more GBs.
There’s definite potential, Apple just perhaps needs to work out a few kinks.
Apple Awarded Patent For Episodic TV On The Apple TV (TUAW)
Apple has been awarded a patent that it filed over five years ago related to sorting episodic TV content on the Apple TV, according to Patently Apple. There’s an interesting tidbit referring to menus that “correspond to television shows that have either been recorded from a broadcast or purchased from a content provider.” This seems to suggest that at one point there were (or are) plans to include DVR-like functionality in the Apple TV. An included DVR-like function which combines the existing Apple TV interface with a TiVo-esque recording ability would be a killer feature.
iOS Is The Most Popular Mobile Platform According To IT Pros (Apple Insider)
Apple’s iOS is the most popular mobile platform among corporate IT workers, according to Check Point Software. iOS accounts for 30% of usage with RIM’s BlackBerry platform just behind at 29%. Google’s Android operating system was considered to produce the greatest security risk. Some 65% of respondents reported that their organisations had devices that were personally owned by employees in addition to company-owned mobile devices accessing corporate networks.
The Secondary iPhone Market Both A Benefit And Detriment To Apple (All Things Digital)
Consumer Intelligence Research Partners (CIRP) surveyed the secondary iPhone market and found that since the debut of the iPhone 4S (Oct. 14, 2011), 53% of new iPhone buyers have introduced their old phone into the secondary market. “We think the secondary market is both detrimental and beneficial to Apple,” said CIRP co-founder Mike Levin. “It hurts Apple because it creates competition for new iPhones, which we see in the relatively modest sales of reduced-price iPhone 4 and free iPhone 3G units. But it also benefits the company because used iPhone customers aspire to own the newest and best iPhone, so they are likely future new phone customers.”
What A Research In Motion / Samsung Merger Would Mean For Apple (PadGadget)
The most recent company rumoured to have an interest in the purchase of RIM is Samsung. But why would RIM be interested in entertaining what Samsung may have to offer? Likely because Samsung is the most likely to maintain the Blackberry branding that they worked so hard to create and maintain. What would that mean for Apple? Precious little. The biggest gain for Samsung is the corporate market where RIM has dominated. This isn’t (or wasn’t) Apple’s playing field. If anything, Microsoft should be the one more concerned.