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AAPL Up With Markets
Stocks were mixed in early trading but stabilised in the positive by midday as the best week of the year in trading comes to a close. Shares of AAPL are up over 1%. Catalysts include second quarter results released the third week in July (TBA); the next iPhone launch this fall; smartphone push into China and emerging markets; iCloud rollout and adoption; the continued evolution and next generation of Apple TV; and new platforms such as books / publishing and social (Ping). Shares of Apple trade at 11x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities), low versus historical standards.
Apple Makes A Lot Of Money Annually Per iOS User (Asymco)
What’s the yearly, recurring revenue per user of iOS, Apple’s mobile platform? Some $150, estimates Asymco’s Horace Dediu, extrapolating from the number of devices in the market and a 3.5 average device lifespan. That’s a lot of money per user. And assuming users are loyal, that’s recurring revenue. “If we extrapolate growth of iOS to 500 million users then we can assume they will generate $74 billion per year in recurring revenues,” Dediu adds. And yet Apple trades 15x earnings.
The Debate Continues, Apple To Offer Low-End iPhone In 2012 Says Analyst (CNet)
Apple will offer the iPhone 3GS for free and the iPhone 4 for $99 timed with the release of the iPhone 5, says Mike Abramsky from RBC Capital Market. He believes these price cuts will be part of an entry-level iPhone strategy on Apple’s part, designed to “target mid-market smartphone buyers and counter Android s mid-market expansion.” Abramsky thinks the “baby” iPhone is coming in 2012.
HP TouchPad No Match For The iPad (AppleInsider)
According to reviews of the HP TouchPad which arrived in stores today, the iPad is still king of the tablet world. The Wall Street Journal tech scribe Walt Mossberg describes the TouchPad as “simply no match for the iPad” while admonishing the device for “poor battery life, a paucity of apps and other deficits.” The New York Times’ David Pogue called the TouchPad “late for the ball” and claiming the tablet “doesn’t get off to a good start” because it’s 40% thicker and 20% heavier than the iPad 2.
Apple Could Constrain Amazon’s Tablet Production (Digitimes)
Amazon will soon place initial component orders for its upcoming tablet, which is slated to launch in the second half of 2011. According to industry sources, Amazon’s initial order will likely fall in the 1.5 million to 2 million-unit range, and the retail giant is expected to take its first delivery in September. But production plans could be constrained by Apple’s existing touch panel demands.
App Sales To Double Next Year (AppleInsider)
Software sales from Apple’s mobile App Store as well as competing platforms (there’s basically only one, the Android Market) are expected to continue their huge growth in the coming years, reaching $14.1 billion in direct revenue in 2012 and nearly $40 billion by 2015 according to Canalys. Sales from digital download destinations for mobile devices will grow 92% from an expected $7.3 billion in 2011.
iPad Apps Reach 100K Apps In The App Store, Schools The Other Tablet App Stores (MacStories)
At the end of March the iPad App Store reached the 75,000 apps milestone in less than 365 days since the original iPad came out in April 2010. As of the end of June, there are 100,161 iPad apps in the Store. That’s exponentially greater than the paltry 300 or so dedicated Android Honeycomb apps currently available on Google’s platform, not to mention similarly lacking app store selections from HP and RIM.
Apple Shares Continue To Be In The Toilet (Bloomberg)
Apple shares have dropped 4% this month, capping their worst first-half performance in three years, as investors fret over Steve Jobs’ medical leave, await new products and fret that rivalry from Google will slow growth. And Apple’s next financial report could boost shares, thinks Ryan Jacob of Jacob Asset Management. However, Walter Price of RCM Capital Management thinks, “It’s hard to know if the stock is going to outperform the market.”