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AAPL Up As Market Breathes
Stocks are off this morning after yesterday’s rally with shares of AAPL up only marginally. Future catalysts for Apple stock include monthly NPD data (Mac / iPod business – see below); iPhone unit updates and AT&T exclusivity expiration; iPad shipment ramp and international expansion (China’s coming); new content revenue streams such as video and books; and possible entry into the TV market with a refresh of Apple TV. AAPL trades at 14x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).NPD Data Keeps Analysts Busy: Apple Products Continue To Plug Along (Various)
Some conflicting opinions:
- Gene Munster at Piper Jaffray believes that for the first month of the September quarter, July, NPD data of up 15% year-over-year suggests units Macs are tracking in-line (factoring in international sales growing faster than domestic). Street consensus calls for Mac units to be up ~21% in the September quarter, or 3.7 million units. iPod NPD units for July were down 1% year-over-year, in-line with his model of down 2%. Given the likely iPod refresh expected late in the quarter, it is too early to estimate the impact of new models late in the quarter. He maintains his Overweight rating.
- Barclays Capital analyst Ben Reitzes estimates that Mac units will grow 23% in the September quarter. NPD data for July (of 15% up) indicates that Mac unit sales are on track and will include a pick-up into the back-to-school season. He believes that the iPad is likely cannibalising some notebook PC sales, he does not believe Mac sales are impacted at this time. Ben continues to believe Apple’s valuation is very attractive and that shares can benefit driven by strong iPad demand, a new iPhone upgrade cycle, significant international expansion, and additional new products expected later this year. He reiterates his Overweight rating.
- Jeffery Fidacaro at Susquehanna did some proprietary supply chain checks and believes there is upside to Apple numbers (after one month?). Checks suggest increased production forecasts across all of Apple’s product lines. Specifically, he highlights easing iPhone panel constraints and positive revisions to MacBook builds, reflecting normal sequential seasonality. Apple remains his favourite name in the sector with a Positive rating and $365 price-target.
- Morgan Stanley’s Katy Huberty believes that iPad momentum is likely contributing to the moderation of both the broader PC and Mac unit growth. She notes that the good news for Apple is that Mac sales for July were better than both June (11% year-over-year) and the overall PC market (also 11%). However, July’s growth is down from the Mac’s previous three-month average of roughly 25%.
iPad Coming Soon To China Courtesy Of China Unicom (Fortune)
China Unicom has won the right to sell the iPad (both the Wi-Fi and the 3G versions) in China. The report follows news that China Unicom will be selling the iPhone 4 in early September, less than three months after that device was released in the U.S. No date for the product’s release was given however, if delivered in the September quarter, it could mean upside, should the product blaze off the walls like it did in the U.S.
Apple Going After Mobile Payments (The New York Times)
Apple recently hired Benjamin Vigier, an expert in the mobile payments industry who works with a technology called near field communication (NFC). NFC could help the company replace cash or credit cards, allowing iPhone owners to swipe their phones at a terminal to pay for products or services or another possibility would involve integrating the NFC technology into Apple’s iAds program.
Fun Fact: Apple Likely Using Liquid Metal (Gadget Venue)
There has been some news about Apple perhaps buying a company that makes liquid metal, which is more bouncy than regular metal. It will be interesting to see what Apple does with liquid metal over the coming years and if we will see more of it in products. The newer iPhones or iPads could be made with this metal to toughen them up with the ability to morph a little.
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