THE APPLE INVESTOR: It’s All About The Enterprise This Year For Apple

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S. Baker via Flickr

AAPL Moving With Market
Stocks are mixed in early trading as the U.S. goes into corporate earnings and European leaders meet to find ways to tackle the debt crisis. Shares of AAPL were up strong on positive investor sentiment but are currently moving with the rest of the market. Catalysts for the stock include holiday quarter results to be announced on Tuesday, January 24 at 5:00pm Eastern Time. iPhone upgrade cycles and adoption; update to the iPad in early 2012; continued market share growth of the Mac business line; further penetration in China and emerging markets; the evolution and potential re-conception of Apple TV; and platforms such as Siri, mobile advertising (iAd), books and publishing, gaming, mapping and social (Ping). Shares of Apple trade at 9.2x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).How Many iPhones Did Apple Sell This Holiday Quarter? (Fortune)
A lot. The most important metric  for Apple in the quarter that ended eight days ago, likely to account for more than half of the company’s revenue for its fiscal quarter, is the number of iPhones sold. 40 Apple analysts, both professionals and independents, were polled and for once they agree: this was almost certainly a blow-out quarter. The average from Wall Street is 29.74 million units, or a year-over-year increase of 83%. The average amongst the independents is 33.42 million units, or an annual increase of nearly 106%. Goldman Sachs just upped estimates this morning as well.

iPhone And iPad Sales Set To Reach 170 Million This Year (AppleInsider)
Combined iPhone and iPad sales in calendar 2012 are expected to reach more than 170 million in another record breaking 12-month span according to analyst Michael Walkley with Canaccord Genuity. He sees 2012 being another banner year for Apple, with sales of 116.4 million iPhones (up 20%) and 54.6 million iPads. iOS will represent 18% of the mobile operating system share, good for second place behind only Google’s Android with 52% on sales of 335.5 million handsets.

iPhone 4S Was The Top Selling Phone At All Three Carriers In December (BGR)
Apple’s iPhone 4S was the best-selling smartphone at Verizon, AT&T, and Sprint last month according to Michael Walkley analyst at Canaccord Genuity. Samsung’s Galaxy S II handsets held the number two spot at both AT&T and Sprint while the Galaxy Nexus was the second most popular smartphone at Verizon Wireless in December. Verizon Wireless revealed earlier this week that it sold 4.2 million iPhones in the fourth quarter.

The iPhone Should Have A Strong Couple Of Months (Fortune)
The next few months should be very good for Apple according to the results of a ChangeWave Research survey of 4,000 North American early adopters. More than half of the respondents who plan to buy a smartphone in the next 90 days are leaning toward an iPhone, down from 65% last quarter but far more than any of Apple’s competitors and “Apple has never dominated smart phone planned buying to this extent more than two months after a major new release.”

Apple’s Mark Up And Margin On NAND Is Incredible (Fortune)
Apple bought 23% of the world’s NAND flash last quarter and re-sold it to consumers for billions more than it paid, according to Sanford Bernstein analyst Toni Sacconaghi. The only difference between a 16 GB iPhone 4S and the 32 GB model is 16 GB of NAND flash memory, for which Apple charges customers $100. But according to Sacconaghi, Apple buys that memory for a heavily discounted price of $0.67 per gigabyte, or a total of $10.72. That’s a pretty sweet mark-up.

China Unicom Offering The iPhone 4S For Free With 2-Year Contract (Various via Scoople)
Carriers in China (now that exclusivity might be over) were only recently given the go-ahead to start selling the iPhone 4S, but they have already figured out how to use the handset to drive business. Apple’s carrier partner, China Unicom, is offering an aggressive promotion in which customers can get a brand new iPhone 4S for free if they sign a multi-year service contract. Customers can pay as little as 286 yuan, or $45 U.S. per month, for the plan to get a free iPhone 4S. Offering the phone for free could drive even more demand.

The Next Few Years Will Be About Enterprise Expansion For Apple (GigaOM)
In its Global Tech Market Outlook for 2012 and 2013, Forrester Research estimates over the course of 2012, Apple will sell $9 billion worth of Macs and $10 billion worth of iPads to enterprises worldwide. That’s up from the estimated $6 billion spent on Macs and $6 billion on iPads in 2011. Forrester calls its corporate growth “the big surprise of 2011,” especially because Apple has never actively or directly targeted business users.The three channels of corporate adoption include:

  • IT departments buying iPads
  • Smaller companies buying both Macs and iPads for employees
  • Employees bringing their own iDevice, then harassing their IT department to support them

And while Apple continues to make inroads into the corporate IT market, traditional PCs are expected to lose ground.

HTC, Motorola And Perhaps Samsung’s Demise Could Be Apple’s Gain (Business Insider)
Two big Android handset makers had terrible quarters. HTC sold only 10 million units in the last three months of the year, down from 13.2 million in the third quarter. And Motorola sold only 10.5 million, down from 11.6 million in the previous quarter. Meanwhile Samsung, perhaps not wanting to be tarred with the same brush, pre-announced a fantastic quarter. But Samsung said nothing about smartphone sales. Considering Windows Phone isn’t a contender, Apple could have had an even bigger iPhone quarter than anticipated.

Traffic Suggests The iPad Was A Dud This Holiday (BGR)
Advertising network Chitika saw traffic across its network from the Kindle Fire grow roughly 20% each day leading up to Christmas, and traffic then exploded by more than 120% on Christmas Day. BlackBerry PlayBook saw the second biggest spike, up just over 50%, and Samsung’s Galaxy Tab line of tablets saw traffic jump about 15%. Traffic from Apple’s iPad didn’t increase at all on Christmas Day, suggesting that rival tablets may have had an even bigger impact on holiday iPad sales than previously predicted. Not sure I put too much equity in web traffic stats.

Digital Music Download Surpass Physical Sales For The First Time (The Guardian)
Steve Jobs is smiling somewhere. 10 years after he promised to reinvent the music industry with the iPod, digital downloads have overtaken physical sales of singles and albums for the first time in the US. Digital downloads accounted for a record 50.3% of all music sales in the U.S. last year, according to an annual report by Nielsen and Billboard, contributing to a rise in total album sales for the first time since 2004. Total U.S. digital sales were up 8.4% year-over-year in 2011, while physical sales fell 5%.