The Apple Investor is a daily report from SAI. Sign up here to receive it by email.
Photo by Kevork Djansezian/Getty Images
AAPL Off In A Choppy Market
The market is trading sideways, currently spiking, as consumer confidence rockets past expectations. Shares of AAPL are off. Next month, Tim Cook will be the keynote speaker at the D10 Conference on May 29. Apple’s developer conference (WWDC) is slated to start June 11. Investors remain focused on iPhone penetration globally and the anticipated launch of the next generation iPhone in the fall; new iPad adoption; market share growth of the Mac business as well as the upcoming refresh; the evolution of Apple TV; and platforms such as Siri, iAd, iBooks and Ping. Based on last night’s close, shares of Apple trade at 9.7x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).Decline Of Android Signals The Rise Of Apple’s Monopoly (TechCrunch)
We have always built and destroyed monopolies. Companies often start out good but slowly turn, for lack of a better word, evil. The twin dark stars of profit and market share bring even the kindest companies into a collision course with failure. Apple is headed down that road. As dominating as the iPhone is to the mobile phone market, the iPad is even more so to the tablet market. This domination in two of the most important consumer electronic spaces is more frightening than Microsoft’s monopoly in the ’90s.
Apple Is Winning For Three Reasons: Innovation, Opportunity And Execution (TIME)
Apple is building one of the most stunning financial runs in the history of corporate America. The company says it’s sold over 365 million digital devices over the last five years, 50 million last quarter alone, and is currently averaging nearly $4 billion in monthly profit. It has amassed $110 billion in cash. Most insanely, this could just be the beginning. Apple is exceedingly well-positioned to take advantage of several major trends in the new digital economy. Here are three major forces buoying Apple’s growth and pushing the company forward: innovation, opportunity and execution.
Without Steve Jobs, Apple Will Decelerate (Forrester)
Apple will decline in the post Steve Jobs era. Here’s why. When Steve Jobs departed, he took three things with him: 1) singular charismatic leadership that bound the company together and elicited extraordinary performance from its people; 2) the ability to take big risks, and 3) an unparalleled ability to envision and design products. Apple’s momentum will carry it for 24-48 months. But without the arrival of a new charismatic leader it will move from being a great company to being a good company, with a commensurate step down in revenue growth and product innovation.
One Quarter Of iPad Buyers Have Never Owned An Apple Product, Here Comes The Halo Effect (AppleInsider)
According to the NPD Group, about 25% of buyers in the U.S. have made the iPad their first-ever Apple product. Just 33% of U.S. homes own Apple products, but that number is growing well past the 37 million American households Apple devices are currently found in, thanks in large part to the iPad. A majority, or 67%, of the U.S. households that do have Apple products own an iPod, and 82% of iPod owners polled said the media player was their first Apple product. But as the popularity of the iPod has declined, Apple’s new “halo effect,” driving sales of other devices in its ecosystem, is being led by the iPad and iPhone.
The iPad Launches In 9 Additional Countries (9to5Mac)
Earlier this month Apple launched the new iPad in South Korea and 11 other countries, and today the company continues its international launch of the device with an additional 9 countries. Beginning today, the new iPad will be available in Colombia, Estonia, India, Israel, Latvia, Lithuania, Montenegro, South Africa and Thailand.
iOS Accounted For 80% Of All Enterprise Activations (Good Technology)
According to Good Technology, Apple’s iPad and iPhone accounted for 79.9% of all enterprise customer activations in the first quarter of 2012. The iPhone 4S was the device that was most popular with Good’s customers, accounting for 37% of activations. The iPad 2 accounted for 17.7% of activations, the iPhone 4 was responsible for 15.2%, and Apple’s newest iPad, which has only been out for a few weeks, was responsible for 4.3%. After Apple’s devices, the Motorola Droid, the Samsung Galaxy S II and the Google Nexus each represent a small number of activations.
Jim Cramer Skewers Wall Street Analysts (Mad Money)
On CNBC’s Mad Money, Jim Cramer ripped Wall Street analysts a new one. “Wall Street analysts don’t exactly have a sterling track record, but this, this was perhaps the biggest screw-up we’ve seen with a high profile stock in ages,” he complained. Cramer noted that he views Apple as an investment, not a trade. Apple has an inexpensive stock that sells at a discount to many other technology stocks and he thinks the company has great future growth prospects.