THE APPLE INVESTOR: iPhone Infiltrating Financial Institutions, RIM Should Be (More) Scared

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AAPL Up Marginally In Mixed Market
Shares of AAPL are up nearly $1 to $255 in a struggling market. The stock traded sideways most of last 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.

Blackberry’s Corporate Dominance Could Be On Its Way Out (Reuters)
Standard Chartered (a British bank) is replacing the Blackberry with the iPhone as its standard corporate communication device. Eventually the replacement could result in thousands of bankers (75,000 employees) switching to Apple. “It’s a group-wide initiative involving wholesale and consumer banks globally,” said a spokeswoman. This is a huge win for Apple as many financial institutions restrict usage to the Blackberry because of security concerns. Perhaps other banks will follow suit.

Manufacturer Finally Named in Verizon iPhone Production (Brighthand)
According to various unconfirmed reports and wide speculation, Apple is producing a version of the iPhone with support for CDMA wireless networks. Pegatron Technology is supposedly manufacturing a version of the iPhone for Verizon in August or September. Analysts predict that Pegatron could make as many as 10 million units in the first year of production. Diversifying iPhone carriers is one of the biggest market opportunities for Apple in the U.S. and “could significantly shake up the phone market.”

Sony Waiting For Apple To Completely Dominate The Tablet Market Before Entering (Business Week)
Sony wants more evidence that consumers will actually buy a tablet that would compete with the iPad before investing in one. The company plans to keep investing in its e-Reader devices – the company’s fastest growing product in its most recent fiscal year. This is great news for Apple who sold 1 million iPads in less than a month after its debut (faster than the iPhone). iPads in Australia are already sold out as pre-order shipping dates have been pushed back to June 7. Not sure how much more evidence Sony needs.

AAPL Showing Bullish Price Movement (Market Intelligence centre)
Apple stock has been indicating support around $251 and resistance in the $268 range. Technical indicators are currently bullish for the stock. For a hedge, buy the July 2010 $260 covered call for a net debit in the $243 range, which is also the break even stock price for the trade. A lower cost hedged play would be to buy a longer term call option, going long the January 2011 $170 call and selling the July 2010 $260 call for a $80 debit.

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