THE APPLE INVESTOR: A Downgrade, An iPhone 5 Release Date And iPad 3 Production Notes

The Apple Investor is a daily report from SAI. Sign up here to receive it by email.

steve jobs

Dan Frommer, Business Insider

AAPL Up As Market Rebounds  
Stocks opened higher in early trading Monday, looking to shake off the last 4 weeks of losses. Shares of AAPL are up, in line with the rest of tech. Catalysts include the next iPhone launch this fall; the iPad 3 in the spring of 2012 (see below); continued adoption in China and other emerging markets; iCloud / iOS 5 rollout and adoption; the continued evolution and next generation of Apple TV; and new platforms such as books / publishing and social (Ping). Shares of Apple trade at 8.8x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).Apple Downgraded From Neutral To Unfavorable, It’s Not A Joke (Fortune)
Channel Trend downgraded shares of Apple on Friday when the stock is some 50 points off its late-July highs. How did the stock garner a “Neutral” rating nevermind an “Unfavorable” one? Philip Elmer-DeWitt at Fortune said it best: “this downgrade — published at this time, on this stock — strikes me as the dumbest thing I’ve read in some time.” I would agree. Not much is known about the equity research firm. Wonder why.

AT&T Executive Confirms October iPhone 5 Release Date (BGR)
An AT&T vice president has confirmed to several employees that Apple plans to launch the iPhone 5 in early October, according to a new report. The executive told a group of managers that things were going to get “really, really busy in the next 35-50 days, so prepare your teams accordingly.” The company will likely allow a week or two of leeway to take pre-orders. This particular rumour is worth paying attention to because BGR was one of the first sites to heavily push a September release for the iPhone 5.

iPad 3 Going Into Production In October, Ready For Holidays? (The Wall Street Journal)
Not likely. The long-rumoured iPad 3 with a high-resolution display will go to trial production starting in October, in advance of an early 2012 launch, according sources. The report says Apple has ordered key components for its next-generation tablet already, including orders for a 9.7-inch screen for its new tablet, the same as the iPad 1 and iPad 2. One component supplier to Apple said the company has already placed orders for parts for about 1.5 million iPad 3s.

Apple Briefly Valued More Than All Eurozone Banks (Reuters)
On Friday, Apple was valued more than all the Eurozone banks combined. That’s the result of a steep fall in the share price of banks including Spain’s Santander, France’s BNP Paribas, Germany’s Deutsche Bank and Italy’s UniCredit, compared to a steady rise in Apple’s valuation. In early trading Friday, the DJ STOXX euro zone banks index fell 4%, valuing its 32 members at $340 billion. In contrast, Apple’s market capitalisation has soared to $340 billion on the back of the success of innovative technology products like iPods, iPhones and iPads.

What If Google Went The Apple Route With Motorola? (9To5Mac)
There’s a good reason why Apple’s products “just work.” But it’s been a bumpy road from the onset as competitors and critics ridiculed its vertically integrated approach to business. Apple’s supposedly ‘closed’ ecosystem is a major weakness, critics cry. The past decade, however, saw the marketplace validate the strategy through booming sales of Apple gear. But what if Google actually tried the Apple model with Motorola, which today makes about one in 10 Android smartphones? Significant share and ad revenue loss.

Daily Trader: State Street Believes AAPL Is A Bold Buy (Seeking Alpha)
Apple is one of the most popular stocks among the institutions. So I don’t know why this would be bold, but ok. State Street owns 35.24 million shares (3.8%) and increased its holdings by 1.34% in the last quarter. The stock returned 10.38% in a year, and 10.38% since January. The tech giant has a P/E ratio of 14.1, and a forward P/E ratio of 11.09, and an 18.2% annualized EPS growth for the next five years. Earnings increased by 122.15% this quarter, and 66.91% this year. Fair value estimate for Apple is ~$430 per share.