The Apple Investor is a daily report from SAI. Sign up here to receive it by email.
AAPL Flat As Market Struggles
Markets are sliding again on top of yesterday’s sell off. Stocks are now down on the year thanks to the nation’s debt crisis and lackluster macroeconomic data. Shares of AAPL are trading sideways near the flatline while tech is diving further into the red. Catalysts include the next iPhone launch this fall as well as a possible iPad 3 ahead of the holidays; continued adoption in China and other emerging markets; iCloud 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 9.8x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).MacBook Air Models Selling Out (AppleInsider)
Some locations have reportedly been sold out of Apple’s newly updated Thunderbolt MacBook Air models, as consumers have been quick to embrace the refreshed thin-and-light notebook. Checks conducted by analyst Brian White with Ticonderoga Securities have indicated that the new MacBook Air has seen “very strong” demand thus far in the U.S. He said there have been instances of temporary stock-outs of certain models at some locations.
Munster Sees Apple Doubling Smartphone Share (Barron’s)
Piper Jaffray’s Gene Munster conducted a survey of 216 mobile phone users which suggests Apple’s iPhone’s market share “could more than double throughout the next round of phone purchases.” Apple’s share in the U.S. among handset users is 29%, while phones based Android software commanded 17% of the survey respondents. BlackBerry was 28%, other was 11%. Where does he get the doubling in share? He also notes Munster notes “pent-up demand” at Verizon where 55% of subscribers without an iPhone expect to buy one.
Next Generation iPhone Now rumoured To Launch In October, Wait, September (All Things Digital)
Which means it will miss the third calendar quarter. Despite multiple reports suggesting Apple is blocking employee vacations and making preparations for increased foot traffic in September, a new rumour suggests the iPhone won’t actually launch until October, possibly even late in the month. Early reports suggested Apple’s fifth-generation iPhone would be a modest update featuring the same case design as the iPhone 4, but more recent reports say the device could feature a complete redesign. At least the carrier execs have it to start testing. Reports out this morning now say September.
Steve Jobs Still Very Much A Part Of Apple’s Operations (Softpedia)
People who are in contact with the high-ups at Apple on a regular basis say the company’s chief executive is still doing his bit for the company some six months into a medical leave granted to Steve Jobs for an undetermined period of time. And despite the medical leave, under the direction of Chief Operating Officer Tim Cook, Apple stock continues to soar to record highs.
How Apple Would Solve The Debt Crisis (MarketWatch)
What would happen if Apple had to tackle the debt crisis? First, it would eliminate spending that’s not working. Then it would make a commitment to spend if necessary. Third, it would look for ideas to spend on. Finally, it would call customers’ bluff: how much are you willing to pay for what the government gives?
Safari Doubles Market Share The Last Two Years Given Success Of iPhone And iPad (Net Application)
According to Net Application’s, in the last two years Microsoft’s IE has slipped from nearly 67% share to just 52.8%, while Firefox use has slipped slightly from almost 23% to 21.5% in July. While Google’s Chrome as exploded from 2.84% to 13.5% and Apple’s Safari share has nearly doubled from 4.1%% to 8.1%.
Daily Trader: Why Apple Remains A Long Term Buy (Seeking Alpha)
What separates Apple from most other hype stories is that not only is it deserved, but the stock is still fairly valued, and potentially valued a bit too modestly given its long term growth prospects and spotless balance sheet. And Apple is yet to thoroughly tap into the business world, as almost all the code is written for Windows. This may or may not change, but even if it doesn’t, Apple will continue to expand its market share of the PC market via the MacBook and iPad. While the stock is attractive at current levels, wait for a pullback given the negative market and macro sentiment.