The Apple Investor is a daily report from SAI. Sign up here to receive it by email.
AAPL Up With Markets
Markets are surging after the European breakthrough with shares of AAPL up with the rest of tech. 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 lines; the introduction of the anticipated Apple TV set and related products; and evolution of platforms such as Siri, iAd and iBooks. Shares of Apple trade at 8.9x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).Analyst Says iPhone 5 Will Be Biggest Product Launch In CE History (Street Insider)
Wells Fargo resumed coverage on shares of Apple with an Outperform rating and $640-$660 valuation range. The firm said “new iPhone launches and the resulting earnings upside driven by demand have historically been the biggest share catalysts for Apple.” Trading at 10.5x Wells Fargo’s fiscal 2013 estimates, the stock looks undervalued “given what we believe will be the biggest product launch in consumer electronics’ history (iPhone 5 in fall).”
Apple Crushes Google On App Retention (Localytics)
App retention rates are improving as app publishers shift from an early focus on “downloads” to more mature customer acquisition and retention models. The overall app industry improved retention rates 19% over the last year. App publishers for the iPhone and iPad saw the greatest success, with retention rates 52% higher than those on Android. A healthy 35% of Apple iOS users launched an app more than 10 times after downloading, compared to 23% of Android users. The average Android app also suffers from 24% one-time usage rate compared to just 21% one-time usage rate for iPhone and iPad.
Can Apple Beat Google’s Mapping Army (Cult Of Mac)
With iOS 6, Apple is finally ditching Google as a maps partner and releasing their own custom maps solution, built upon partnerships with companies like TomTom and using their own technology acquired from companies like C3. How costly would it be for Apple to compete with Google Maps head-on, though, by building their own mapping system from the ground-up without any outside deals? More than you might think: in fact, Apple might have to increases its global workforce by 50%. Nicolas Carlson at Business Insider says that Google has 1,100 full time employees and 6,000 contractors working on its mapping products. Excluding its retail army, Apple only has 13,000 employees in total.
Apple Ax Gives Siri A ‘D’ Rating, Google A ‘B+’ (Business Insider)
Piper Jaffray’s Apple analyst Gene Munster tested 800 searches on Google and Siri. He said Siri only had 62% accuracy in its results and an apprehension of 83%. He gives it a ‘D’ grade. He pegs Google’s accuracy at 86%, a ‘B+.’ Munster says Siri is still two years behind Google, but it has potential to be disruptive in the future.
Apple’s Senior Vice President Of Hardware Engineering To Retire (Apple)
Apple today announced that Bob Mansfield, Apple’s senior vice president of Hardware Engineering, will retire and the role will be transitioned to Dan Riccio, Apple’s vice president of iPad Hardware Engineering, over several months. The entire hardware engineering team will continue to report to Mansfield until his departure. Mansfield has been with Apple since 1999 and led hardware engineering for the iPhone, iPod, and the Mac. But his biggest accomplishment was probably the iPad. It was his baby since inception. The iPad has been called an engineering marvel. The brain-drain continues. The post-Steve-Jobs era of Apple is upon us.
Apple Said To Be Making Big Changes to iTunes (Bloomberg)
Apple plans an overhaul of iTunes that would mark one of the largest changes to the world’s biggest music store since its 2003 debut, according to source. Apple will unveil the changes by year’s end including closer integration of its iCloud file-storage service with iTunes so users can more seamlessly access and manage their music, videos and downloaded software apps across different Apple gadgets. Apple also plans new features for sharing music. Given the success of social music streaming services like Spotify, it’s not surprising that Apple would want to make iTunes a little more social as well.
CHART OF THE DAY: iPhone’s Average Selling Price (Business Insider)
The iPhone turns five this week. One of the most impressive things about the iPhone’s five year run is that the average selling price of the phone has remained just about the same around $600, notes Horace Dediu of Asymco. Meanwhile, Apple’s rivals pull in less than $400 per device. Apple defined the modern smartphone market with the iPhone. It then faced an onslaught of competition from Google, Microsoft, Palm, and Research In Motion. But Apple has managed to stay on top. This is evident by the fact that since 2008 Apple has never had to slash its prices. With all the competition, and pressure from carriers, if Apple was losing the smartphone battle, you’d expect it to cut the price of the phone. Instead, it’s been steady.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.