THE APPLE INVESTOR: Business Is Booming But Stock Is Wiping Out

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AAPL Off With The MarketsĀ 
Stocks are mixed in early trading as a delay in emergency loans to Greece and a possible downgrade of Italy’s credit rating are fueling fears about the euro zone debt crisis. Shares of AAPL are off over 2% as the stock continues its downward trend. Catalysts include second quarter results released in July; the next iPhone launch this fall (see below); 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 10.3x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities), low versus historical standards.iPad Business Alone Is As Big As EMC, Will Continue To Skyrocket (AppleInsider)
The market for tablets could top 215 million units by 2015, with the iPad expected to dominate the market’s explosive growth. Sanford Bernstein analyst Stacy Rasgon expects tablets to “grow like wildfire” with a compounded annual growth rate of 66%. Consumer interest will continue to be “staggering,” with 20% of individuals surveyed indicating plans to purchase a tablet in the next year. With its iPad business alone, “Apple has created a company the size of EMC in one year.”

Apple Has Enough Cash To Buy The Entire Mobile Phone Industry (Asymco)
Apple now has enough cash to buy the entire mobile phone industry, with the exception of Samsung. As of the close of the second calendar quarter, Apple is expected to have about $70 billion in cash (equivalents, short- and long-term marketable securities). That’s a sum so massive it could buy out HTC ($25.4 billion), Nokia ($22.6 billion), RIM ($13.8 billion) and Motorola Mobility ($4.2 billion).

Apple Not Afraid Of Facebook’s Web App Platform (AppleInsider)
Apple knows about and is lending support to Facebook’s “Project Spartan” HTML5 web app platform. Facebook’s goal was to get people to use its own network as the distribution model for games and other apps, “not the App Store (or any other distribution hub)”. Apple, however, is said to be lending “minor support” to the HTML5 app project because it doesn’t see the initiative as a threat to the App Store.

Apple Might Not Own Video Sales, But It Owns The Devices Playing Them (Cult Of Mac)
Apple only owns 10% of all video sales, handily beaten by YouTube, Amazon and Netflix. Video has been viewed as Apple’s next breakout area, to the point where the company invested $1 billion in its North Carolina data centre. However, a recent survey conducted by Citigroup analyst Mark Mahaney shows that, as Google has yet to find commercial appeal for YouTube, videos are largely being watched on Apple devices.

Apple To Bid On Nortel Patents Against Google (Bloomberg)
Apple has received approval to proceed with plans to bid on a group of wireless technology patents from Nortel. Apple will join join Intel and Ericsson in a bidding dogfight with Google to acquire a teeming lot of 6,000 patents from the telecom-equipment maker Nortel. Last week, Apple settled its long-running patent dispute with Nokia for what analysts estimate could be as much as $1 billion in licensing fees.

Chart Of The Day: Apple Stock Has Stalled (Business Insider)
For about a year and a half following the financial crisis, Apple’s stock was a rocket ship zooming from a low of $85 to a high of $360. But all of the sudden, the stock has flattened. Year to date, it’s down. And this has investors confused. What’s holding the stock back? It’s not like Apple isn’t delivering results. And while the general market is flat for the year, you’d think Apple would outperform. But fears still persist regarding Jobs’ return as well as products in the pipeline. There’s also the stock manipulation issue.

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