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LIVE iPhone 4 Conference Call Coverage (Business Insider)
The big news today is Apple’s press conference on the iPhone 4 antenna problem. Join us at 1:00 pm ET at SAI for live coverage and commentary.
AAPL Flat Ahead Of Call
Shares of AAPL are flat in a weak market as investors prepare for the fallout from today’s iPhone 4 press conference. Next week, Apple will release its June quarter earnings report on Tuesday, July 20, 2010 at 5:00 p.m ET. Future catalysts include monthly NPD data (Mac / iPod business); iPad sales and unit updates; and possible entry into the TV market. AAPL trades at 22x estimated fiscal-year 2010 EPS and 12x Enterprise Value / Trailing Twelve Months Free Cash Flow.
Wall Street Weighing Towards Recall And / Or Repair (Various)
Analysts try and prepare investors for the fallout from today’s call.
- Gene Munster at Piper Jaffray believes that Apple’s press conference increases the likelihood of an iPhone 4 modification going forward. This change in manufacturing could disrupt sales in the September quarter, impacting EPS by $0.38. If there is no modification and Apple replaces existing iPhone 4’s, this would result in a $1 billion one-time charge which he sees as an investment in the brand. He maintains his Overweight rating.
- Shaw Wu at Kaufman Brothers believes that a full recall is unlikely even though checks indicate the company is exploring hardware and software fixes. Fortunately, the “death grip” appears to impact a small set of users, meaning financial impact is likely to be immaterial. Most investors will likely treat it as one-time item anyway. Shaw believes we will look back at this as a minor blip months from now. He maintains his Buy rating.
- Mike Abramsky at RBC Capital believes there is now a higher probability of a repair or recall. Firstly, a press conference is unprecedented for Apple. Secondly, Apple’s online store shows iPhone 4 availability now in 3 weeks (from 7-10 days a few days ago) possibly implying a transition in production. He reiterates his Outperform rating.
Your Guess Is As Good As Any Editor’s On The Outcome Of The Call (Various)
Everyone and their dog chimes in with possible outcomes.
- Apple should be more like Intel: Announce a retribution program and get on with it. (Seeking Alpha)
- While explanations regarding the issue have only fuelled discontent, Apple is not likely to announce a recall according to a source close to the matters. (The New York Times)
- Five things Apple can do: apologise, spotlight Steve Jobs, explain what went wrong, offer a real fix, offer how the change can be fixed going forward. (The Wall Street Journal)
- The company has invested too much in the consumer to ignore them. That being said, there will be no recall (Forbes).
- In the call, Apple could just offer a change in the manufacturing process for phones going forward. (Financial Times)
- The call is just a way to pivot the message back to what Apple perceives to be the facts. John Gruber is in agreement but thinks there’s a bigger message coming. (TechCrunch, Daring Fireball)
At Least There Is Still Good Demand For The iPad; There’s That (Reuters)
Apple has already sold more than three million of its iPad tablet computers in just over three months – a faster time period than analysts and the company had anticipated. In a 1,000 people surveyed by America’s Research Group, 6% per cent said they planned to buy the device while 8% had already bought one. The number of people planning to buy is 70% of those who have already bought which “shows incredible demand for the product.”
Apple Refreshing iPod And MacBook Air Line (Barron’s)
Apple is planning to roll out a new generation MacBook Air with an 11.6-inch display in the second half of 2010. Also in the works is a new iPod Touch with a camera that can shoot both stills and video. Depending on the price point, we could see a bump in iPod sales.
Daily Trader: Bearish Pressure Building. Gee, Ya Think? (Learning Markets)
In looking at recent money flows, AAPL has an up / down inflow ratio of 0.93, trending to the bearish side as more money flows out of the stock. Can AAPL change perception today and break out of current trading ranges or will increasing bearish sentiment push the stock lower? AAPL has gained 8.11% during the past month and is currently trading above its 20-day, 50-day and 200-day moving averages.