The Apple Investor: Morgan Stanley Wildly Bullish About Stock, iPhone, And iPad

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Steve Jobs Says $40 Billion Cash Hoard Is For “Big, Bold” Investments, But This Seems Unlikely
(Bloomberg)

Apple store wedding

Topics of discussion at Apple’s annual shareholder meeting included its retail plan for China and its massive stockpile of cash. While Apple has had little presence in China, the company is now opening 25 stores. In so doing, Apple is employing one of its most effective marking tools: using retail to show off its products while educating consumers about them at the same time. When asked about Apple’s huge mountain of cash, Jobs recited Apple’s traditional line that he would rather have cash at his disposal instead of dividends or buybacks. Now, that doesn’t mean Apple is going to go out and buy a huge company, and we don’t expect that it will. Historically, the company has acquired companies for technology and talent, usually for small sums of money. Let’s see who the next lucky companies will be.

Morgan Stanley Still Banging Apple Drum, Bullish On iPad And iPhone Product Cycle
(Apple Insider)
Analyst Katy Huberty at Morgan Stanley is the latest bull advising investors to back up the truck based on attractive valuation at 15x calendar 2010 EPS and several near-term catalysts. She notes that there has been (and will continue to be) a change in investor sentiment about the iPad. While investors were initially disappointed with the functionality and fanfare behind the device, it’s clear that they like iPad pricing. Katy thinks Apple will sell an aggressive 6 million iPads this year, considerably higher than the consensus view of 3-4 million. Additionally, she is encouraged by the upcoming June iPhone product cycle as the next generation phone will lower the total cost of ownership. Bears…anyone? We’re waiting. Click to see the interactive model.

Palm’s Disaster Is More Evidence That Apple Is Still Highly Dependent On Steve Jobs
(Business Insider)
Palm blew its quarter, citing lack of consumer demand for its Pre and Pixi smartphones. In the short term, that’s good news for Apple, whose iPhone has been able to gain ground despite increased competition. But in the long term, Dan Frommer argues, it’s more evidence that Apple is still dependent on visionary CEO Steve Jobs. Palm is basically Apple, Jr. with a roster of Apple alumni, but this hasn’t allowed it to build a better product.  At Apple, Steve still calls the shots, both big and tiny ones. And his vision holds everything together.

Apple Stock Split rumours Drive Investors Into A Tizzy Even Thought It’s Meaningless
(Barrons)
rumours of a 4-for-1 Apple stock split sent the stock up nearly 1% and lifted the Nasdaq yesterday afternoon. While the company did host its annual shareholders meeting, no stock split was announced (not much else was announced either, but that’s a different post). Eric Savitz at Barrons is baffled at why investors would react so positively stating “It simply doesn’t matter.” Yes, while it is just numerical split of price and numbers, most traders and investors view stock splits as high potential trading opportunities. A lower stock price allows small and individual traders to invest more and the sudden occurrence of this ‘affordability’ results in more demand and greater liquidity. Apple at $50 a share seems yet another reason to jump on the bandwagon.

The Gadget That Really Could Use The iPhone OS? The Mac
(Mac rumours)
Considering iPods and iPhones are selling like crazy, why not use the iPhone interface / OS as the basis for a new round of touchscreen computers? It seems as though Apple has been tinkering with this idea for quite a while. It’s also not a bad idea considering developers would have to build applications for only one platform. The platform could even be extended to Apple TV and the next generation of that product that the company denies making. Whether this feature will actually surface, make no mistake: Apple is actively working on making computing less of a keyboard and mouse experience, and more one that involves your fingers.

Some Idiot Thinks All iPad Apps Should Be Paid For
(Betanews)
Joe Wilcox at Betanews thinks that Apple should ban freebees from the iPad App Store in an attempt to differentiate itself from the iPod and iPhone as well as elevate overall perception. This is an awful idea. Paid doesn’t always mean better. Not to mention that 90% of downloaded apps are free. It would also undoubtedly reduce the choice of applications overall and exclude most open source applications as well as ad sponsored services. Developers use a free version of their app to get people hooked and so that they then buy the upgraded premium service. Why would the company alienate that marketing and up sell ability when they make anywhere from 2-4 cents (and increasing) per quarter on the App Store? Apple is not likely going to go for it.

Even Al Gore Can’t Make Apple Green
(CNet)
Even board member Al Gore couldn’t push green initiatives through. The irony. Apple shareholders rejected two green proposals yesterday; a sustainability report (a report that competitors Dell, IBM, and Hewlett-Packard already practice) and a board committee focused on green initiatives. Both would encourage the company to analyse its impact on the environment. That said, Jobs outlined several examples of how the company is working to simplify packaging as well as making products with non-toxic materials.

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