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AAPL Bucking The Trend
The markets are mixed today, putting the Dow’s 7-day winning streak at risk. Shares of AAPL, however, are up about 1% in a down tech tape. 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).
Wall Street Weighs In On Verizon iPhone Sales (Business Insider)
We have a possible record breaker on our hands:
- Verizon may have sold 500,000 iPhones on the first day the Apple handset became available last week according to JP Morgan analyst Phil Cusick. The estimate is based on the carrier’s statement it had sold more iPhones in the first two hours than were sold on any of its previous first day events. If Cusick’s estimate is correct, Apple is on path to break its previous first weekend sales record of 1 million sales set with the last two iPhone versions.
- Susquehanna’s Jeff Fidicaro predicts the carrier sold 100,000 iPhones in the first 17 hours and could sell 2.9 million iPhones by March or 11.6 million Apple handsets for all of 2011. Jeff is low versus consensus, with the high of around 16 million for 2011.
iPhone And iPad Growing Faster Than Anticipated, Says Analyst (Barron’s)
Needham & Co. analyst Charlie Wolf raised his target price on shares of Apple to $450 from $375, stating that the “trajectory” of sales of the iPhone and iPad now appears to be higher than he originally expected. For 2011, he’s modelling that Apple will sell 75 million iPhone units. Wolf sees Apple with a 16% share of smartphones, moving to perhaps 22% in the next five years, with the assumption Verizon sells 16 million units this year and 16 million next year. In terms of the iPad, he assumes Apple will capture 90% of the market or about 31 million units. He reiterates his Buy rating.
iPad 2 Goes Into Production, According To Familiar Sources (The Wall Street Journal)
Apple’s iPad 2 has entered production, according to The Wall Street Journal. It comes as no surprise, the iPad 2 is rumoured to be thinner and lighter than the first iPad, at least one camera on the front of it, and a display with resolution “similar to” the first model. Lack of enhancement to the display resolution as a potential disappointment. An enhanced display had been rumoured given that the iPhone 4 last year was upgraded to the finer Retina Display.
iTunes Remains Dominant In Movies Despite Gains From Rivals (iSuppli)
Market research firm iSuppli released data on U.S. online movie downloads and streams for 2010, that revealed that Apple continues to dominate the market with a 64.5% share of total spending. That share is down, however, from 74.4% in 2009 in the face of growth of other services. The overall market grew 60% in 2010, with Microsoft riding the popularity of its Kinect controller to late-year gains with its Zune Video offerings and Wal-Mart making significant gains with its Vudu service.
Which Is The Better Stock To Own: Apple Or Google? (Seeking Alpha)
10 years ago it looked like Apple and Google would be friends forever as they battled Microsoft. Things are not so nice now. Apple and Google are going toe to toe in some key markets with Microsoft fading into irrelevance. So which stock is the better stock? Based on valuation, product mix and software excellence, The Balanced Bull says Apple. The company is simply dominating, taking market share, expanding margins and locking users into the i-ecosystem.
As In-App Purchases Soar, So Do Parent’s Tempers When They See Bills From Child Purchases (GigaOM)
Parents and lawmakers are raising questions about the way Apple handles in-app payments in apps aimed at children. Children were racking up big in-app purchases inside freemium iOS apps to the surprise of parents. The issue ultimately paints the in-app purchase boom in a new light. App analytics company Distimo finds that in-app purchases rival paid downloads as the top revenue source for developers last year.