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AAPL Sideways As Market Rises
Stocks are up mid-week after the Greek parliament passed an unpopular austerity plan critical to avoid a debt default. Shares of AAPL are trading sideways, while the markets have recovered in the positive after an early morning sell-off. Catalysts include second quarter results released the third week in July (TBA); 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 (including long-term marketable securities), low versus historical standards.
Analyst Raises Third Quarter Estimates Based On iPad And Mac Sales (Barron’s)
Needham analyst Charlie Wolf raised estimates based on predictions about Apple’s Mac and iPad shipments. In terms of the iPad, competitors “have made an imperceptible dent in the trajectory of iPad sales”. He upped his iPad sales estimate for the fiscal third quarter to 9 million units, an increase from 7.5 million. Mac unit estimates he raised from 3.75 million to 4.25 million for the quarter. He also increased his long-term revenue and EPS forecasts for Apple. For fiscal 2011 he sees just under $103.6 billion in revenue, with EPS of $25.
Clash Of The Analysts: Will There Or Won’t There Be A Low-End iPhone Released? (AppleInsider)
Another analyst has countered recent reports that Apple plans to release a cheaper iPhone for the pre-paid mobile market. BMO Capital’s Keith Bachman believes that the iPhone 3GS will continue to serve as the company’s “low-end” handset. FBR Capital Markets analyst Craig Berger agrees with Bachman that a low-price iPhone is unlikely. This is in contrast to Deutsche Bank’s Chris Whitmore, who has stated a mid-range, contract free $300-$500 iPhone will launch in September.
Nearly 70% Of The World Not Being Addressed By The iPhone (Asymco)
Speaking of cheaper phones, according to research firm Asymco, nearly 70% of the world’s population uses pre-paid phones. So far, Apple is missing in action in that marketplace. Despite Apple’s recent decision to offer a contract-free iPhone, the handset remains ridiculously expensive. The company will eventually fill 100% of the post-paid market through the expansion of carrier agreements. When put in these terms, why on earth wouldn’t Apple address the low-end?
A Tale Of Two iPhones: Just Look At Apple’s Product History (Daring Fireball)
John Gruber would agree. He says there is a bit of evidence of the release of a low-end iPhone amongst the scraps of information that have leaked regarding new iOS hardware. More importantly, it makes strategic sense. Eventually Apple is going to expand the iPhone to multiple tiers as in multiple new products. It’s just a matter of when. Examine the history of the iPod. Apple presses technologically at the high end, and the company expands into the mid-range market with lower priced models. Why not now?
Apple The Top Mobile Device Vendor In Australia As Nokia Takes A Dive (IDC)
Apple has become the top mobile device vendor in Australia for the first time, with nearly one third market share, according to IDC’s Q1 2011 Mobile Device Tracker report. The market there has mainly been dominated by Nokia, but this year the Symbian platform has seen a huge tumble along with a dip in demand for feature phones mainly due to the rise in smartphones and consumers shying away from the platform ahead of the transition to Microsoft’s Windows Phone.
Google Seeing 500K Android Devices Activated Every Day (Various via techDygest)
Half a million Android devices are activated every day, a number that’s growing 4.4% each week, Google’s Android chief Andy Rubin revealed in a tweet. That means that Android could hit 1 million daily activations by October if this growth rate maintains. Henry Blodget at Business Insider says this leaves Apple in the dust. Back in January, Apple announced (in a roundabout way) over 360,000 daily iOS activations, and at that time Google was seeing 300,000 activations. Getting to $14 billion in mobile ad revenue in the next 4 years doesn’t seem so far-fetched.
Daily Trader: Samsung Replaced By TSMC As The A6 Processor Maker (Various via iDygest)
It is speculated that the move to give Taiwan Semiconductor Manufacturing Company (TSMC) exclusive manufacturing of the A6 may be a result of Apple’s lawsuit against Samsung. Increasing legal tension between the two companies has prompted Apple to switch to contract fab to TSMC to build its next-generation A6 chip. Samsung is the company contracted by Apple to build the ARM chips found inside the iPhone 4, iPod touch 4th generation, and iPad. Could be a decent short-term pair trade.
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