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AAPL Off With Markets
The Dow dropped 100 points in early trading Friday as stocks are on track to post the worst weekly loss in nearly a year. GDP data showed meager growth in the economy and the debt deal deadlock is keeping investors nervous. Stock recovered slightly by midday and are trading near the flatline as a new Boehner plan got the support of the House. Shares of AAPL are trading sideways, mostly flat. Catalysts include the next iPhone launch this fall as well as the possible iPad 3 ahead of the holidays (see below); continued adoption in China and other 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 10x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).
More Than One Third Of U.S. Consumers Want To Buy the iPhone 5 (PriceGrabber)
PriceGrabber polled approximately 3,000 U.S. consumers about Apple’s upcoming iPhone 5 in early July and found that 35% of consumers intend to buy the iPhone 5. Of those who intend to purchase the Apple handset, more than half plan to do so within the smartphone’s first 12 months of availability. The company also found that 48% of respondents claim iOS is their favourite smartphone platform while 19% said it was Android, 7% said it was Windows and 6% said their favourite smartphone OS is RIM’s BlackBerry OS.
Foxconn Loses iPad 3 Bid; Pegatron Takes Over (VentureBeat)
Device manufacturer Pegatron has landed the exclusive contract to build Apple’s upcoming iPad 3, beating out former Apple favourite Foxconn. Pegatron underbid Hon Hai for a new contract to manufacture the iPad 3, which is rumoured to become available some time near the Thanksgiving holiday. Hon Hai, owner of infamous Apple manufacturing partner Foxconn, manufactures Apple’s current-generation iPad 2 tablet along with a number of other Apple products.
Apple rumour To Buy Barnes & Noble Not Likely (Apple Insider)
Responding to a new rumour that Apple is considering a purchase of bookseller Barnes & Noble, Brian Marshall with Gleacher & Company said he doesn’t think such a deal would make much sense. In fact, if Apple’s sole goal was to obtain brick-and-mortar locations, the company might be better suited to purchase Borders, which has about 400 stores in liquidation. That said, Barnes & Noble has more than 700 stores plus another 600 college bookstores, as well as decent digital penetration with its own eBookstore and Nook e-reader.
Apple Has More Cash Than The U.S. Treasury (Business Insider)
According to the latest daily statement from the U.S. Treasury, the government had an operating cash balance of $73.8 billion at the end of the day yesterday. Apple’s last earnings report (PDF here) showed that the company had $76.2 billion in cash and marketable securities at the end of June. In other words, the world’s largest tech company has more cash than the world’s largest sovereign government.
iPhone Due Mid-September, iPad 3 Due Near Thanksgiving (BGR)
Apple will launch its next-generation iPhone smartphone during the second week of September according to China Times. Apple is said to have an initial order of 4 million iPhone 5 handsets on order for launch, plus another 400,000 units being manufactured now as part of a trial run. The same report states that Apple is reportedly now aiming to release the iPad 3 some time around the Thanksgiving holiday in November (making for a Black Friday nightmare).
Android Controls 39% Of The U.S. Smartphone Market (Nielsen)
According to Nielsen, the Android software platform is now installed on 39% of U.S. consumer smartphones, but Apple remains the largest smartphone manufacturer with the iPhone (at 28%) and RIM is second largest with Blackberry (20%). Both Android and the iPhone gained market share equally in June at the expense of virtually every other platform. Perhaps when the iPhone 5 launches we’ll see a bigger dent in the market share war.
Softbank Crushes Fiscal Quarter Results Thanks To The iPhone (TUAW)
Japanese cellular carrier Softbank’s fiscal first quarter results showed an almost 500% increase in net income from the previous year. Japan was previously the land of text messaging, but it’s obvious that the smartphone revolution being driven by Apple’s products is increasing data use dramatically. Softbank had a very high amount of data revenue compared to to voice, at the equivalent of over $31 per month on average per person. The increase is also due to a shift to smartphones.