THE APPLE INVESTOR: Apple Could Shred The Credit Card Companies

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Credit Cards Cut


AAPL Sideways In Up Market  
The markets are up on European bailout optimism despite the miss in consumer confidence. Shares of AAPL are sideways as tech rises. Investors remain focused on iPhone penetration globally and the anticipated launch of the next generation in the fall; iPad adoption; market share growth of the Mac business; the introduction of the anticipated Apple TV set; and evolution of platforms such as Siri, iAd and iBooks. Shares of Apple¬†trade at 9.0x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).Apple After Steve Jobs Isn’t Missing A Beat (Read Write Web)
It’s been a year since Jobs’ last ‘Stevenote’. And the Apple team is running smooth and strong. It’s going to be a few years before we really see how Tim Cook does things his way at Apple. But what the company showed off Monday at its annual Worldwide Developers Conference seemed as impressive and consistent as it ever was under Jobs. No, Apple didn’t unveil any major surprises. But that’s not fair to expect: Those only happen every few years. What Apple did do at WWDC was show that it’s at the top of its game in every aspect: Software, hardware, design, and efficiency. And that’s a great sign.

iOS App Sales Run Rate Is About $4 Billion Annually (Asymco)
Based on metrics given at WWDC, the app download rate has been increasing. It is now at about 49.5 million apps downloaded every day. Although music and books are available to the same user base (actually higher due to Macs and iPods which do not run apps), apps are being downloaded at least four times fast. So in terms of transaction value, clearly apps are now a bigger business, even if Apple only keeps 30%. The bigger story here is that the iOS app economy has reached a run rate of $4.3 billion per year from a standing start four years ago. How big will the TV app economy be four years from the launch of an Apple smart TV?

Apple Has A Big Opportunity In Disrupting The Credit Card Business (Read Write Web)
Apple took another step toward mobile payments when it introduced its Passbook app for iOS devices, manoeuvring itself into position to challenge Visa and MasterCard. If Apple really wanted to disrupt the credit card companies, it could bypass them entirely, building its own online-payment infrastructure. There are good reasons for Apple to create its own iPay-style platform, especially with 400 million iTunes accounts. It would let the company keep for itself the money it pays to credit card companies in transaction fees. And it could expand its core hardware business with a new product line: point-of-sale terminals for millions of cafes, restaurants and retail shops.

Is Apple Fragmenting The iPhone? (CNet)
In the fine print about Apple’s upcoming iOS 6, you’ll find a little note that says new features like Flyover and turn-by-turn directions are only available on the iPhone 4S, or the iPad 2 or higher. A note immediately below that says Siri is only available on the iPhone 4S or third-generation iPad. Since the iPhone 3GS, iPhone 4, and iPad 2 are all actively for sale and still being marketed by Apple, I have to wonder: is Apple on the road to fragmenting the iOS experience? Technically, yes. But it’s still nowhere near the level of fragmentation you see on Android devices.

Baidu To Give Apple Cut Of Ad Revenue From iPhone Search Integration
(Bloomberg via Apple Insider)

The addition of Chinese search engine Baidu to iOS later this year will give Apple a cut of advertising revenue from the popular website. Terms of the deal are similar to revenue sharing agreements with other smartphone makers who provide built-in Baidu search. And Baidu accounts for about 80% of Internet searches in China. Baidu integration iOS will also extend to the voice-driven Siri personal assistant on the iPhone. When iOS 6 launches this fall, Siri will also understand Mandarin, tuned for both Taiwan and the Chinese mainland, and Cantonese, for Hong Kong and the mainland.

Time Inc. To Join Apple’s Newsstand Offering (The New York Times)
Time Inc.’s magazine lineup is coming to Apple’s Newsstand. This includes People, Sports Illustrated, InStyle and Entertainment Weekly. Up until now, the standalone Time Inc. apps have not enabled subscription purchases in-app. Time, Inc. has been reluctant to agree to the restrictions Apple imposed on companies that sold magazine subscriptions through its App Store. At the crux of this complaint was restricted customer data, which Apple has eased and now gives users the option to share their information to the publisher. The Huffington Post has a newsstand magazine now too.

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