The Apple Investor is a daily report from SAI. Sign up here to receive it by email.
AAPL Recovering With Market
Markets were off as bad news from McDonald’s and HP dragged down stocks this morning but markets are currently recovering in the positive. Shares of AAPL are also trading in the positive by midday. Investors remain focused on the revamped iPhone 5 launch next month; iPad proliferation and the rumoured launch of the “mini”; market share growth of the Mac business lines; the introduction of the anticipated Apple TV set and related products; and evolution of platforms such as Siri, iAd and iBooks. Shares of Apple trade at 10.3x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).How Many iPhone 5s Will Be Sold? (Asymco)
Phil Schiller stated (under oath) that when assessing sales for a new model of the iPhone, Apple used an easy shorthand: Each new generation sold approximately equal to all previous generations combined. That’s a helpful gauge. Will it continue to hold? As it stands today, the cumulative total would have to be greater than 263 million units (including assumptions for the current quarter). Unfortunately, this is a moving target. As the 4S (and maybe 4) remain in production, the target continues to increase with time. But based on various assumptions, he range is between 170 – 250 million.
Samsung Biting The Hand That Feeds It, Apple Accounts for 9% Of Revenue (Bloomberg)
Apple accounts for 8.8% of Samsung’s revenue, making it the company’s largest customer, according to a Bloomberg supply-chain analysis. Ahead of the iPhone debut, Apple realised it needed a processor better tailored to the device. Apple turned to Samsung, then ramping up a division that makes so-called logic chips, which handle the devices’ other functions. Samsung became the sole manufacturer of the so-called A-series of chips and accounts for about 20% of the iPhone technology. Samsung has a lot to lose with this litigation.
Barclays Says Microsoft Won’t Stop The PC Hemorrhage Due To The iPad (AppleInsider)
Outside of Apple’s Macs, sales in the global PC market have remained stagnant for several quarters, with many predicting a rebound after Microsoft ships Windows 8. But that’s not going to stop the decline, an analyst with Barclays states. Ben Reitzes believes that the Windows 8 launch will have limited impact on improving PC sales. “We continue to believe that the rise of smartphones and the iPad are having an adverse impact on the PC market – in addition to macro [economic] factors.”
The iPad Accounts For Over 70% Market Share In China (China Daily)
The iPad’s market share in China’s tablet PC sector climbed to over 72.6% in the second quarter of 2012, according to Analysys International. The figure marked a 20.06% increase from the first quarter of 2012. Behind the iPad, the tablet PC from Lenovo Group, the world’s second-biggest PC maker, held about 8.38% of the market share. Meanwhile, Samsung’s tablet PC saw a 7.69% year-on-year decrease in its market share, which stood at 3.59% in the second quarter of 2012.
Apple Is Hogging All The Mobile Revenues (All Things D)
Apple, thanks to the higher gross margins of the iPhone and iPad, far outshines its rivals in both revenue and operating profits. Though it shipped only about 6% of the industry’s smartphones and tablets in the second quarter, Apple captured about 43% of the industry’s revenue, according to Raymond James analyst Tavis McCourt. And it generated an astonishing 77% of the industry’s operating profits. This, even in a seasonally weak period for iPhone sales and as Samsung is outselling Apple in smartphones two to one. Ouch.
Mobile Payments: What’s Taking So Long And Who Will Win? (BI Intelligence)
Here’s why Apple, and only Apple, could make NFC work:
- NFC essentially turns phones into wallets
- But, NFC suffers from the chicken-and-egg problem
- And, there is no evidence that NFC is actually more convenient than cash or credit
- Apple is therefore uniquely able to make NFC a viable payments solution
Apple’s Ads Are No Longer Running, But We Are Still Talking About Then (TechCrunch)
During the opening ceremonies of the Olympics, Apple aired three ads for its Genius Bar. Over the ensuing weekend, a number of widely-read blogs posted mostly negative pieces about the ads. Today, Apple’s ad agency told Mashable that the ads are no longer running and they were only intended to run the first weekend of the Games. Again, several posts were written on widely-read sites. And therein lies the real “Genius” of the ads: we’re still talking about them.
Apple and Google Duke It Out Over Kodak Patents (WSJ)
Kodak is on the verge of obscurity, but in a final grasp to raise some money, the company is selling off its entire patent portfolio. It could fetch upwards of $2.6 billion, and Apple and Google are going head to head for them. However, neither company has submitted a bid anywhere near Kodak’s estimate. Kodak received two bids from investor groups pitting Silicon Valley giants Apple and Google against each other ahead of an auction set for today (Wednesday). The bids from the two teams came in around $150 million to $250 million. That’s a far cry from $2.6 billion.
Business Insider Emails & Alerts
Site highlights each day to your inbox.