THE APPLE INVESTOR: Apple's Annoying Way Of Delivering The Future

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AAPL Up Despite Retail Sales Fall
Markets are off after retail sales fall an ugly 0.5% in June. Shares of AAPL are up on positive analyst comments on the quarter. The company will report earnings for its third fiscal quarter on Tuesday, July 24. Shareholders are earning a dividend as of July 1. Investors remain focused on iPhone penetration globally and the anticipated launch of the next generation in the fall; iPad adoption and the rumoured launch of a smaller version; market share growth of the Mac business lines; the introduction of the anticipated Apple TV set and related products; and evolution of platforms such as Siri, iAd and iBooks. Shares of Apple trade at 9.6x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).

What You Need To Know Before Reacting To Apple’s Earnings (Forbes)
iPhone sales have become the metric by which Apple is judged these days because the iPhone now accounts for over half of Apple’s revenues. Demand is speculated to falter as consumers await the upcoming iPhone 5, with analysts forecasting a 10-13% decline in iPhone unit sales from previous forecasts since April. But a current-quarter slowdown in iPhone sales has substantial upside impact. This happened last year and Apple followed up that quarter with the highest earnings report in the history of the company. For investors, an Apple earnings “miss” on lower-than expected purchases of iPhones, and potentially iPads for the same reason, should be viewed as a “tee-up” for two successive monster quarters.

Analyst Raises Estimates To 20M iPads Sold Last Quarter (Various via Scoople)
The third generation iPad is selling like hotcakes, and now that the iPad 2 is cheaper than ever, it is flying of the shelves in record numbers as well. Needham analyst Charlie Wolf raised his estimate for iPad sales for the three months ended June from 13.5 million units to 20 million. Saying that his earlier estimates were “hastily formulated,” Wolf now believes that Apple had an immensely successful quarter with its third-generation iPad. Do you believe Apple sold a record breaking 20 million iPads this past quarter?

iPhone Sales This Last Quarter May Not Be That Bad (Business Insider)
Gene Munster at Piper Jaffray thinks the bearish iPhone estimates have gotten out of hand, and Apple will easily beat the expectations of the buy-side people. Munster is calling for 28-29 million iPhones in the June quarter, which is above buy-side expectations of 25-27 million. He thinks the next quarter, though, will be the one where were see iPhone sales drop as everyone waits for the next iPhone. But, he’s expecting a huge holiday quarter. All in all, Munster says buy some Apple stock before it beat expectations again.

The NY Times All But Confirms The Smaller iPad (The New York Times)
They have jumped on the bandwagon as well saying Apple “is developing a new tablet with a 7.85-inch screen that is likely to sell for significantly less than the latest $499 iPad, with its 9.7-inch display, according to several people with knowledge of the project who declined to be named discussing confidential plans. The product is expected to be announced this year.”

Feeling The Backlash, Apple Rejoins EPEAT (The Next Web)
Apple is adding its products back to the EPEAT database and re-adopting the ratings standard for its products. One of the most prominent headline stories after Apple effectively dropped the EPEAT standard was that the city of San Francisco was planning to block further purchases of Apple computers if it didn’t adhere to the standard, which the city requires. Apple surely didn’t want any other government agencies getting up in arms about it. So they are back. And the company gets a 100% rating, better than Dell, HP and Samsung.

Apple’s Annoying Way Of Delivering The Future (The Atlantic)
The company’s habit of killing off technologies before they’re really dead is inconvenient, but Apple is playing the long game. It seemed like a radically dumb idea at the time, but Apple eliminated floppy drives from its products altogether in 1998; the beginning of the end for the storage format. Fast forward a decade, and in the latest update to the company’s notebook line, Apple does away with physical DVD drives and spinning hard disks. Now, every purchase of a new Mac is one more step toward the death of DVDs, ending demand for technology that will be dead in a few years anyway.

Apple Is Also Changing The Retail Industry (iDownloadBlog)
How Apple has affected retail stores? Well, Samsung has just opened its first retail store in North America and it looks an awful lot like an Apple Store: tablets and smartphones laid out on white tables and employees walking around in blue shirts. But Samsung’s not alone. There are a number of retail chains looking to remodel the interiors of their stores to mimic the inside of Apple’s gadget havens. Best Buy announced a new “Connected Store” strategy, set to debut later this year, that involves such a makeover. And Verizon is planning a similar redesign for its stores.

Is Apple Creating A New Aristocracy? (Cult Of Mac)
Aristocrats are characterised by, among other things, desirable social privileges and conveniences. Some examples:

  • Apple filed a patent for an app called iTravel. The app is a kind of “easy-pass” for air travel. While the commoners line up for check-in, security and boarding, the Apple aristocrats just stroll onto the plane.
  • rumours also indicate Apple plans to enlist Bluetooth 4.0 in their long-predicted mobile wallet initiatives to turn every store into an Apple store by enabling the purchase point-of-sale for Apple users. So while other customers wait in line at the register, Apple aristocrats just summon a store employee, process their payment and go on their merry way.

So is Apple creating a new aristocracy? No, of course not. But reading the news lately, it sure looks that way.

Passbook Can Trump Any Other Mobile Payment Method (Cult Of Mac)
PayPal is the closest thing there is to a leader in the mobile payment space, but the company has too many different payment services and technologies that it’s trying to launch and market all at once. Then there’s the NFC-oriented partnerships going on around the world between banks, mobile carriers, and device makers. You also have location and industry-specific options like Tabbedout. And you have organisations like Amtrak delivering their own apps and related payment systems. Apple is actually being very smart with its Passbook app. With this much fragmentation, it’s easy to see why Apple is hanging back from lunching an iWallet.

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