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AAPL Up In A Recovering Market
Stocks opened down this morning but are currently recovering, possibly on news that Egypt’s president Hosni Mubarak is finally resigning. Upcoming catalysts for the stock include news regarding Steve Jobs‘ health and return; the rumoured second quarter launch of the next generation iPad; monthly NPD data (Mac / iPod business); iPhone sales updates on new carrier Verizon as well as the launch of the iPhone 5 anticipated this summer; new revenue streams such as video, books and social (Ping); moving iTunes into the cloud; and the continued evolution and adoption of Apple TV. Shares of Apple trade at 14x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).
Gene Munster Had A Busy Team Yesterday; Chimes In On Verizon iPhone Launch (AppleInsider)
Here’s what he has to say:
- Verizon’s iPhone Will Disrupt 1 Million Android Sales: Analyst Gene Munster at Piper Jaffray believes Verizon typically would have sold between 4 – 5 million Android handsets this quarter if Apple’s iPhone were not available. But he sees the arrival of the iPhone taking a chunk out of Android sales on Verizon, disrupting them by about a million. The analyst sees Apple selling about 1.5 million iPhones on Verizon in the carrier’s first fiscal quarter of 2011. On AT&T, Munster sees Apple selling 2.9 million units in the March 2011 quarter, a number which assumes Verizon sales will cannibalise 740,000 sales from its rival.
- Survey Shows Most Verizon iPhone Purchasers Are Already Verizon Customers: He also took a look at early adopters of the Verizon iPhone. Of those polled, 63% indicated they are already Verizon customers. Just 8% were switching from AT&T, less than the 18% switching from Sprint and 13% from T-Mobile. In terms of platform, 28% were switching from the BlackBerry, 13% were making the jump from Android and 8% were coming from Nokia. Dan Frommer covered the story at Business Insider.
New Verizon iPhone Costs 9% Less To Make Than The AT&T Version (iSuppli)
Despite having nearly the same functionality and a similar bill of materials (BOM) as the previous model, the new code division multiple access (CDMA) Verizon iPhone 4 includes significant design and component changes. Research firm iSuppli completed its full tear down of the CDMA iPhone that launched on Verizon this week, estimating that the device carries a bill of materials cost of about $171.35, down from $187.51 or approximately 9% less than the original iPhone 4. Great for margin.
Apple Developing Cheaper And Smaller iPhone In Assault On Android (Bloomberg)
Apple is rumoured to be developing a cheaper and smaller version of the iPhone. It’s about a third smaller than the iPhone 4. Going down market is a direct threat to stemming the advances of Android. Apple may also be developing a dual-mode model for GSM and CDMA network capabilities from the same handset as well as offering a universal SIM card to allow users to go between carriers. That oughta go over well with the carriers. Read more from Jay Yarow at Business Insider.
iAd Hurting To Fill Slots And Renew Contracts? (TechCrunch)
Application developers and advertising industry insiders reportedly claim that Apple’s fledgling iAd interactive advertising business for iOS is struggling to fill slots and renew contracts. Several developers mention that fill rates for iAd fell sharply after the New Year with two separate developers saying that rates dropped from 18% to just 6%. And in a few instances for some newer apps, none of the ad slots were getting filled, compared to nearly complete fill rates from other mobile ad networks.
iPad 3 Could Be Out As Early As This Fall (VentureBeat)
Reports have emerged of a fall (September) launch of Apple’s third-generation iPad in order to match the release schedule with the company’s annual iPod releases and ahead of the holiday season. We don’t even have number 2 yet which is expected to be unveil within the next few weeks. So 4 months between launches? Then why bother with the iPad 2? The rumours suggest that Apple is planning on accelerating the iPad’s release cycle, in line with theories that the tablet life-cycle will be significantly less than that of the PC. Read more insight at Business Insider.
New iOS Version Hints That Apple TV Will Support Online Gaming (Engadget)
New code in the iOS 4.3 beta 3 firmware hints that Apple TV may soon support online gaming. Several references have been found that point to a controller of some sort, leaderboards (Game centre), a way to schedule games (multiplayer) and a store front (iTunes App Store). Apple TV’s minimum storage capacity (about 8GB) suggests the company might look to streaming not entirely unlike how OnLive works; streaming low bandwidth data and computing locally could happen, in theory.
Apple Stock Takes A Dive Mid-Day; Was It Just A Fat Finger? (Forbes)
Apple’s stock took a nose-dive yesterday around 1:39pm ET. There was a huge spike where dollars were being skipped in the selling. Traders saw Apple tick from $351.70 to $349.00 within seconds with abnormal selling. Some attribute it to the rumour circulating on Twitter that Steve Jobs was in the hospital. Others are saying empty stores in San Francisco probably drove a “sloppy seller” which likely sparked a sell off by algorithmic trading systems.
Patent Suggests Apple To Merge Cloud Content With Locally Stored Media Library (AppleInsider)
The U.S. Patent and Trademark Office revealed a new patent application from Apple. It details a system that would include a centralized list of media files; some saved locally and others available remotely. The application suggests that Apple’s long-rumoured cloud-based iTunes music streaming service could allow users to seamlessly merge their locally saved media files with additional content available for streaming via the Internet.
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