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AAPL Still Weak
Markets are up as U.S. GDP slows but beats expectations. Shares of AAPL are off on continued weakness. Investors remain focused on the iPhone 5 launch 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 9.4x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).
The iPhone Is Twice As Profitable Than The iPad (Reuters)
A glance at unsealed documents in the Apple-Samsung trial reveals that iPhones are much more of a profit driver for Apple than its iPads. Double to be more precise. Apple earned gross margins of 49-58% for U.S. iPhone sales between April 2010 and the end of March 2012, while Apple had gross margins of 23-32% on U.S. iPad sales, according to the filing. That means Apple makes as much money on one iPhone as it does on two iPads. It highlights what a big risk it is for Apple to lose carrier subsidies.
Mountain Lion Just Became the Ultimate Cord-Cutting OS (Wired)
People are skipping over perhaps the most significant update in Mountain Lion of all: AirPlay Mirroring. Your computer (iPad or iPhone) wirelessly transmits whatever is playing on that device to your Apple TV, which then shoots this mirrored content to your HDTV via an HDMI cable. In other words, Apple just created a formidable cord-cutting platform. The new operating system can change the way we watch video in the living room, and might even compel some users to finally cancel their cable and satellite services.
Amazon’s Kindle Fire Will Be Destroyed By Apple This Holiday (Business Insider)
Gene Munster, a top Apple analyst with Piper Jaffray, told Bloomberg West that Amazon shouldn’t bank on having strong tablet sales this holiday because the Kindle Fire tablet is going to be “destroyed” by Apple. “The only reason people really buy the Kindle Fire is because it’s cheaper,” he said. “There’s a high probability that Apple comes out with that 7-inch tablet that’s going to compete against the Kindle Fire this holiday, and I think it’s just going to get really difficult for really all the players.”
Apple’s Long Product Cycles Are Killing It (Business Insider)
The iPhone 4S looks small and old next to the latest generation of Samsung phones, which Henry Blodget thinks is contributing to the weak sales Apple saw last quarter and is expecting this quarter. And according to a former (yet objective) Microsoft executive, he’s right. According to the industry insider, “For Apple’s sake, the iPhone 5 better be killer – and not rest on their laurels again. Great numbers as with the iPhone 4s can mask a more fundamental weakness. And they need to ship the iPad mini, because the Nexus 7 could be huge.”
Samsung Crushed Apple In Smartphone Sales Last Quarter (SlashGear)
Samsung had an iPhone-squashing second quarter, analysts predict, shipping twice as many smartphones in the three month period, though the specter of the iPhone 5 is expected to put a dampener on Korean celebrations. The Galaxy S III helped lead Samsung to a total of 52 million smartphones, Juniper Research estimates, more than double Apple’s market-disappointing 26 million iPhone sales. Strategy Analytics also pegs Samsung’s smartphones at around 50.5 million, while IDC estimates 50.2 million.
Reports Pointing To iPhone 5 Launch Late September (BGR)
Expect another quarter of “lackluster” iPhone sales. The iPhone 5 rumour mill has settled on a date when Apple’s highly-anticipated smartphone will be released: September 21st. Sources at both PhoneArena and App4Phone, say that Apple will launch its latest iPhone on the third Friday in September. That release would make sense since it would come shortly before Apple’s fourth fiscal quarter ends and would thus make an excellent time to mark the start of the “fall transition” to new products that Apple CEO Tim Cook talked about during his company’s earnings report earlier this week.
iPad Education Sales Outpace Mac 1-2 (Apple Insider)
iPad is quickly becoming the company’s strongest asset in the education market as sales nearly doubled from a year ago, meaning the tablet outperformed even portable Macs in the segment. This is the second consecutive quarter where the iPad doubled sales of Macs in the education market. Driving the iPad’s high education adoption rate was the cheaper iPad 2. A more affordable tablet was key in garnering sales at the education level and gives much of the credit to the legacy iPad 2’s new pricing scheme. If you were a teacher, would you prefer an iPad or a MacBook for your students?
Apple Executives Watching Amazon’s App Store (WSJ and Business Insider)
Apple executives are really starting to get worried about competition from Amazon’s App Store, according to developers. They believe Amazon’s controlled, iTunes-like approach makes it more competitive than other app stores. Amazon does have a leg up on some of Apple’s other competitors in the app market in part because its model is so similar to Apple’s. It still seems premature to view Amazon’s app store as a big threat to Apple now, but an Amazon’s app store could pose a bigger threat down the road with a larger Kindle Fire and new smartphone.
Steve Jobs Named On Influential American List (TIME)
Steve Jobs was named one of the 20 most influential people in American history according to TIME. He sits alongside the likes of George Washington, Henry Ford and Albert Einstein. He is dubbed the “high priest of the computer age.” Do you agree that Steve Jobs is on of the most influential Americans of all time?
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