The Apple Investor is a daily report from SAI. Sign up here to receive it by email.
AAPL Sliding In Weak Tech Tape
The NASDAQ has eased off of its gains in early trading, but the broader market has built on its opening bounce. Shares of AAPL are off nearly 1% as the stock continues to slide into next week’s earnings report. Upcoming catalysts for the stock include results of its second fiscal quarter on Wednesday, April 20 at 5:00 p.m ET; any update regarding Steve Jobs‘ healthy return; the WWDC starting June 6; monthly NPD data to gauge Mac / iPod businesses; iPad 2 sales updates; iPhone sales updates, the push in China, as well as the launch of the iPhone 5 (whenever that may be); new revenue streams such as video, books / publishing and social (Ping); moving iTunes into the cloud; and the continued evolution and adoption of Apple TV. Shares of Apple trade at 13x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).The iPad Will Dominate Through 2015 Says Gartner (Bloomberg)
The iPad will continue to dominate the market for tablet computers, controlling more than three-fifths of the market next year, according to technology research firm Gartner. Apple’s iOS platform, which powers its iPhone and iPad devices, will account for 69% of the market this year and 64% in 2012. Apple’s share will decline to 47% in 2015, according to the report today.
Tablets (Meaning The iPad) Are Stealing People Away From Other Devices (CNet)
Tablets may be starting to steal people away from their laptops, desktops, and even televisions, according to a survey of ~1,400 respondents released this week by Google’s AdMob. The survey breaks down how people are using their tablets, which in most cases so far, means the iPad. Shopping online occupied the lowest percentage among specifically polled options, with only 42% of respondents confirming they used their tablets to buy from the internet.
Is Apple Spending Enough On Research And Development? (Seeking Alpha)
The company may become “the next Polaroid,” the camera/film company that lost its way as quick film processing and digital technology emerged to replace instant film. Apple’s research and development budget is a comparatively low percentage of revenues at 3%. Most tech houses, like Intel, Intel forever spend over 10% on R&D. With $60 billion in liquidity, the company could easily crank up research and development. What it’s already spent has seemed to work out quite well so far.
Analyst Says Petabyte Buy Dovetails With Cloud-Based iTunes (Barron’s)
Barclays Capital’s Ben Reitzes commented on Apple’s purchase of 12 petabytes worth of storage equipment from Isilon Systems (EMC). It prompted speculation regarding expected cloud-based services. Reitzes says that such huge amounts of data “dovetail nicely” with a Cloud Tunes an online version of Apple’s popular iTunes.
The iPhone 5 May Well Be On Track For A Summer Release (AppleInsider)
The iPhone 5 might not be delayed at all. The newest version of iPhone may well be on track for a June-July release, according to Analyst Brian White with Ticonderoga Securities. As rumours of a later-than-usual iPhone launch for 2011 persist, a new report reveals that the notoriously secretive Apple is being even more careful than usual when dealing with overseas suppliers. Read more at Business Insider.
Hiring Spree: Apple Hires Top Execs For Gaming Platform (AppleInsider)
Apple just poached two top industry PR execs to help further push iOS as a major gaming platform. Nick Grange, who departs his role at Activision as the studio’s European PR director, will be focused on iPad hardware and former Nintendo UK head of communications Robert Saunders will leave his position at the end of April for a “newly created role at Apple”. Apple’s strategy appears to be paying off; smartphone gaming has risen to 44% of the mobile gaming market, while the number of games played on the Nintendo DS and Sony PSP has fallen by 13%.
Woz Said He Would Consider Coming Back To Apple If Asked (VentureBeat)
Apple co-founder Steve Wozniak said that he would consider returning to an active role at the company he helped start if asked. However that statement, which came out during an interview, comes with some strings attached, specifically about the openness of the company’s products. It seems unlikely, since Apple could have asked him back a long time ago.