The Apple Investor is a daily report from SAI. Sign up here to receive it by email.
Photo: Flickr/The CBI
AAPL Down As Market Continues To Sell Off
Stocks are lower in early trading. It appears we are going into our 6th straight week of loses. The markets have suffered as an onslaught of weak economic news dampened hopes about the pace of the global economic recovery. Shares of AAPL are off as well, however to a lesser extent than the rest of tech. Catalysts include second quarter results released in July; 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 (incl. long-term marketable securities).Second Quarter Tracking Above Street Estimates According To “Barometer” (AppleInsider)
Apple’s second calendar quarter may be much better than the Street thinks, according to Ticonderoga Securities analyst Brian White. He issued the latest update for his “Apple Barometer” to investors on Thursday. The barometer tracks trends in Apple’s Taiwan supply chain. The latest numbers for May show Apple tracking up 87% year-over-year. The estimate shows Apple’s sales for May up 10% month-over-month, a number well above the 6-year average 2.2% month-over-month.
TouchPad Not Priced Aggressively Enough And Features Won’t Compete With iPad (BGR)
HP finally revealed a launch date (July 1) and pricing ($500) for its TouchPad tablet. JP Morgan analyst Mark Moskowitz doesn’t see HP’s maiden tablet voyage attracting buyers away from Apple’s iPad 2. While he thinks that the webOS platform will be a differentiating factor compared to the many Android tablets expected to reach the market, he thinks it’s priced too high with limited functionality.
iPhone Expected To Lose Market Share Over The Next 4 Years, To Windows! (IDC)
IDC released new long-term forecasts for worldwide smartphone operating systems, predicting that Apple’s iOS (iPhone) will fall from 18.2% market share in 2011 to 16.9% in 2015. Android is anticipated to stay in front but Windows is forecast to claim second place (thank you Nokia). The research group expects the smartphone market to grow 55% or 4x the broader mobile phone market, reaching 472 million devices in 2011.
Apple Is Now The World’s Largest OEM Semiconductor Purchaser (iSuppli)
IHS iSuppli released a report that shows that Apple is now the world’s largest OEM semiconductor buyer, surpassing HP. Apple bought $17.5 billion worth of semiconductors in 2010, up 79.6% from 2009. In other words, through a common ecosystem, Apple leverages each device to sell other devices. The surge was “driven by the overwhelming success of its wireless products” which “consume enormous quantities of NAND flash memory.”
Other Countries Won’t Get iCloud Until Next Year, Or Later (The Telegraph)
Apple won’t be launching its iTunes in the Cloud service in the UK until 2012. Citing a spokesman for the Performing Right Society, a group that ensures composers, songwriters, and publishers are paid for their work, talks between Apple and UK-based labels are in their early stages.
Android Market App Attrition Double That Of Apple’s App Store (GigaOm)
Android Market is not on pace to overtake Apple’s App Store in overall apps any time soon. Analysis from app discovery service Appsfire found that of the 300,000 apps that have been published on the Android Market, 95,000 or 32% have been pulled over time. Meanwhile, of the 500,000 apps that have appeared on Apple’s App Store, 80,000 or 16% have been unpublished at some point.
Next iPhone Could Launch On Verizon, AT&T And Sprint (All App News)
It’s gonna be a busy Fall for Apple iOS 5 which is scheduled to drop alongside a brand new iPhone. And it may come with its third U.S. carrier, as sources now report that a Sprint iPhone is in advanced testing. The physical design of this device is akin to the iPhone 4 of today, so this might be the iPhone 4S device with support for all carriers that we have been dreaming up and hearing whispers about.
Apple Caves On Subscription Pricing (MacRumors)
Apple has finally stopped insisting on taking a mandatory 30% cut of subscription prices from publishers who sell subscriptions within apps. Henry Blodget at Business Insider believes that as Google’s Android operating system continues its meteoric rise and Amazon’s Kindle continues to boom, Apple will likely be forced to make other concessions like this to stay competitive. There are increasingly more alternative choices, putting pressure on Apple to either open up or become a niche player.
Business Insider Emails & Alerts
Site highlights each day to your inbox.