THE APPLE INVESTOR: iPhone Killing It In Japan, Analysts Going Bananas About iPad Sales

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AAPL Down As Europe Worries Markets
Shares of AAPL are trading down again today as European economic fears continue to rattle the U.S. markets. The stock is off nearly $2 to $250. AAPL has been trading sideways for the past week. Future catalysts for the stock include monthly NPD data (Mac / iPod business); international launch of the iPad next week; and the launch of the new iPhone (June 7 at the Worldwide Developers Conference). AAPL trades at 22x estimated fiscal-year 2010 EPS and 12x Enterprise Value / Trailing Twelve Months Free Cash Flow.

Wall Street Out In Full Bullish Force On Apple (Barclays Capital and Bernstein Research)
Analysts calling for investors to back up the truck for different reasons:

  • Barclays Capital analyst Ben Reitzes is “excited” about AAPL because of the iPad. Channel checks continue to indicate very strong sales and corporations are piloting the device at a surprising pace. He believes that his estimate of 1.5 million iPad units for the June quarter will likely be conservative by about 1 million units (that’s a lot of upside). Reitzes reiterates his Overweight rating and $315 price-target.
  • Toni Sacconaghi at Bernstein Research believes European currency provides a risk to revenue forecasts for hardware companies.  In addition, he continues to believe that 2010 will be a strong year (relatively speaking) and that PC related names are inexpensive at current levels. Toni reiterates his Outperform rating on AAPL and price-target of $300.

The iPhone Is Killing It In Japan According To Research Firm (The Wall Street Journal)
The iPhone is kicking butt and taking prisoners (Samsung, RIM) in Japan. According to MM Research, Apple sold 1.7 million iPhones in Japan, or 72% of total smartphones sold in the fiscal year ending in March. In the latest quarter, iPhone sales tripled while competitor sales flatlined.  Softbank (Apple’s exclusive carrier) added new subscribers at three times the pace of NTT DoCoMo and KDDI, the country’s two market leaders. The outperformance has been surprising to local analysts as broader smartphone utility in Japan far outweighs the capability of the current iPhone.

Google’s Android Also Taking Off; Outpacing iPhone Growth Worldwide (Electronista)
Another research firm is indicating that Android phone sales have overtaken the iPhone in North America. Gartner reports that Google Android OS shipments were up 906% year-over-year to 5.21 million phones in the first calendar quarter. Worldwide however, Apple’s iPhone OS outsold the Android platform, jumping from 10.5% of the market a year ago to 15.4%. Gartner calls for Android to overtake the iPhone as worldwideshare growth outpaced that of Apple, up from 1.6% to 9.6%. Not surprising as the Android platform is available across numerous devices (HTC, RIM, Motorola, etc.) and carriers (Verizon, Sprint, etc.).

iPod Sales, Not Macs, Are Being Pulverized By The iPad (Seeking Alpha)
Many had feared that the launch of the iPad would cannibalise sales of the Mac. According to April NPD data, sales of the iPod, not the Mac, are taking a hit. iPod sales were down 17% year-over-year in the U.S., significantly below the 9% decline forecasted, while Mac sales continued to be up a strong 39%, ahead of the 19% projected by Wall Street. As a side note, iPad sales continue to do well, selling out in tri-state area.

Buying Opportunity Exists In AAPL As Stock Will Accelerate Into Quarter (The Street)
Jason Schwarz (Apple bull, Google bear) believes there is currently a buying opportunity for Apple stock. Comparing growth in various line items and businesses to actual AAPL stock performance yields a large disconnect. The stock is trading 34% higher than it was two years ago. However, revenue is up 80%, net income is up 192%, iPhone growth is up 415%, cash has increased 115%…you get the idea. Not to mention the iPad didn’t exist back then, nor did iAds. Schwarz forecasts that the company will make up that percentage difference in spades as the stock price tries to catch up with its price-to-earnings ratio each quarter.

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