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AAPL Ended The Week Up Nearly 20 Points
Markets in the U.S. are closed today. Have a wonderful holiday weekend. Upcoming catalysts include Steve Jobs‘ healthy return; the WWDC starting June 6; monthly NPD data to gauge Mac / iPod businesses (see below); iPad sales updates; the iPhone 5 launch; push into China (see below); the continued evolution and adoption of Apple TV; and new initiatives such as video, cloud computing (iTunes), books / publishing and social (Ping). Shares of Apple trade at 12x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).
Summary Of The Quarter In Case You Were Under A Rock (Various via iDygest)
Apple posted a record second fiscal quarter with revenue of $24.67 billion and net quarterly profit of $5.99 billion or $6.40 per share. The company sold 9.02 million iPods during the quarter, 18.65 million iPhones (blowing away estimates), 4.65 million iPads (lower than expected, likely due to supply issues) and 3.7 million Macs. Check out our updated Apple model complete with financials, charts as well as a working discounted cash flow analysis. Also, check out these facts about Apple that will blow your mind.
Relevant Market Share Stats To Bookend The Quarter (eMarketer)
Some interesting figures from research firm eMarketer:
- Apple is expected to overtake RIM as the leader of the U.S. smartphone market this year. eMarketer estimates 30% of U.S. smartphone users will use an Apple device at least monthly this year, compared to 28% in 2010, while RIM’s share of the US smartphone market is expected to decline to 25% in 2011 from 30% in 2010.
- The number of U.S. smartphone users is expected to grow 21.9% to 73.3 million this year, up from 60.2 million in 2010 and 40.4 million in 2009.
- Apple’s share of the global tablet market reached 85% by the end of 2010, and despite the rush of new tablet devices from other manufacturers, the company will account for 78% of global tablet sales in 2011.
- The worldwide tablet market is growing fast, with sales are expected to reach an estimated 43.6 million units in 2011, up from just 15.7 million in 2010.
Estimates And Price-Targets Rise Across The Board (Barron’s)
Apple price-targets are soaring and estimates are on the rise almost across the Wall Street analyst board. The highest price-target comes from Brian White of Ticonderoga Securities; a whooping $612 per share or 40% upside. He raised his third fiscal quarter estimate for revenue to $25.1 billion from $24.4 billion and EPS estimate to $5.63 from $5.43 per share.
Apple Overtakes Nokia as Largest Revenue Generating Mobile Phone Manufacturer (Reuters)
A new study from research firm Strategy Analytics is showing that Apple is now the world’s largest mobile phone manufacturer as measured by revenue, outpacing Nokia for the first time ever. “With strong volumes and high wholesale prices, the Apple has successfully captured revenue leadership of the total handset market in less than four years,” said analyst Alex Spektor. Apple’s revenue from the iPhone rose to $11.9 billion in the last quarter, while Nokia’s phone revenue slipped to $9.4 billion.
Apple Sees 250% Growth In China (All Things Digital)
It’s taken a few years, but the most populous country in the world has finally become the iPhone’s fastest growing market. In Apple’s second fiscal quarter, iPhone sales in China surged nearly 250% year-over-year, significantly more than the 155% growth they posted in the United States. It’s a country with a population of over 1.3 billion, so this should surprise no one. This brought Apple’s revenues in the first fiscal half to just under $5 billion for the Greater China market, an increase of almost 4x from 2010.
Apple’s Music To The Cloud Is Completed According To Sources (Reuters)
Apple is rumoured to have completed work on its cloud music service. The new service will allow users to store music on Apple’s servers and stream to iOS devices like iPhones and iPads. Apple has been working on this for a while now, and if it’s well executed it should provide a competitive advantage over Google’s Android, which doesn’t yet have a similar service. Read more at Business Insider.
Verizon Sold 2.2M iPhones In First Calendar Quarter (Various via iDygest)
In about two months since the launch, Verizon activated 2.2 million iPhones, giving Apple a big boost in the U.S. (more than 18 million iPhones sold last quarter). AT&T activated 3.6 million and actually boosted its total iPhone activations while maintaining the same churn rate for the device that it reported a year ago. The U.S. now represents about 31% of iPhone activations. Read more at Business Insider.
Verizon’s iPhone 5 To Be A Global Device (Barron’s)
Comments made by Verizon CFO Fran Shammo indicate Apple is building an iPhone that falls in the global device category. The chips Apple used in both the CDMA iPhone 4 and iPad 2 are capable of connecting to CDMA and GSM networks, but Apple chose not to take advantage of the chip’s GSM capabilities, including only CDMA-specific antennas in each device.
Japan Earthquake Did Not Impact Apple’s Supply Chain (Apple Insider)
After weeks of speculation about how Apple’s supply chain could be affected by the devastating earthquake and tsunami in northern Japan, the company finally made clear that it currently sees minimal impact from the disaster. So, the iPad 2 miss wasn’t because of supply-chain troubles. COO Tim Cook did warn that the situation remains unpredictable.
Why Did The Foursquare Executive Check Into Apple? (9 To 5 Mac)
That actually wasn’t the start of a joke. Foursquare’s co-founder Dennis Crowley enjoyed burritos at Apple’s employee cafeteria yesterday. But why? What’s certain is that the company is looking for funding and that there have been rumours that iOS 5 will bring a major update to location-based features. Interesting.
Apple Is Like The Hummer Of Technology (GigaOM)
Apple came in at the bottom of a new report from Greenpeace detailing the energy choices made by major IT companies due to its use of energy from coal-fuelled power stations. The highlight? The company’s investment in a new North Carolina facility which will triple its electricity consumption, using up the same electricity required for 80,000 average U.S. homes. Facebook wasn’t far behind. Read more at Business Insider.