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AAPL Up As Market Rises
The bull market enters its fourth year this week as consumer confidence breaks out. Shares of AAPL continue to climb. Investors will be looking for the new iPad adoption as pre-orders sell out; iPhone penetration, especially in China and emerging markets; market share growth of the Mac business; the evolution of Apple TV; and platforms such as Siri, iAd, iBooks and Ping. Shares of Apple trade at 10.2x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).
The iPad Is The New TV (InformationWeek)
Streaming is the future. Apple knows it: You don’t build a billion-dollar data centre and launch iCloud merely to compete with Dropbox. TV as a term should be retired. “Display,” “screen,” or “monitor” would be better because they’re more neutral; they don’t imply a particular programming source. If you look at the iPad peripherals market, you can see the change coming in the form of iPad wall mounting kits, installing iPads in kitchens and on walls in other rooms, where small TVs have been thriving. The new iPad can stream video at up to 1080p through one of the third-generation Apple TV boxes. That’s as sharp as a most HDTVs today. The screen is the new TV. Here’s to imagining a 50″ iPad.
iPad Demand Is ‘Off The Charts’ (USA today)
Apple confirmed over the weekend that it has sold out of its first batch of preorders due to ship on launch day, March 16. Apple called demand for the new iPad “off the charts,” but did not say how many preorders it has taken so far. The company usually waits until after a product’s launch weekend to provide sales numbers. If you pre-order today, it’ll take 2 to 3 weeks for a new iPad to ship.
Apple Top Smartphone Manufacturer In Japan During Holiday Quarter (AppleInsider)
During the winter quarter, Apple’s iPhone topped smartphone sales in Japan for the first time, with 26.6% market share, according to IDC Japan. The launch of the iPhone 4S dramatically shifted sales numbers, sending first place Sharp into third place during the quarter with 15.7% share, and pushing the combined sales of Fujitsu-Toshiba into second place with 18.2% share. For the full year, Sharp led sales with 20.1% share, followed by Fujitsu-Toshiba at 18.8% and Apple at 14.2%.
China Telecom Takes In 200K Pre-Orders For iPhone, Exceeds Expectations (M.I.C. Gadget)
Major Chinese carrier China Telecom started selling Apple’s iPhone 4S in China last week, making it the second carrier to offer the phone. The carrier has taken more than 200,000 pre-orders and counting which has exceeded the carrier’s expectations. Adding China Telecom will double the potential sales for the iPhone. China Telecom has 129 million subscribers and operates the largest CDMA network in China. Henry Blodget at Business Insider believes that Apple’s strategy of aligning the iPhone with a single mobile carrier appears to have backfired in China.
The iPad 3 Is Costing Apple More To Make (PadGadget)
And they didn’t pass that cost on to the consumer, which means margins are likely to get squeezed. UMBTechInsights did a preliminary breakdown of the cost of the new iPad and believes that the cost of the 16GB Wi-Fi+ 4G model costs Apple approximately $310 in raw components. This 51% margin is less than the cost of the same model iPad 2, which had a 56% margin. The biggest increase in price, which is not a surprise, comes from the Retina display. These estimates are based solely on raw materials and don’t take into account additional costs like assembly, shipping, marketing and research and development.
Hell Yes, Apple Should Issue A Dividend (The Economist)
Apple is unlikely to suffer a similar fate as Microsoft did when it started issuing its dividend in 2003. Demand for its iGizmos seems insatiable. That is why the company needs to come up with ways to invest more of its cash sensibly. Like ramping up its forward purchases of components and setting up its own semiconductor factories or swallowing smaller companies via acquisition. None of this would put much of a dent in $100 billion. So Apple will probably start handing cash back to shareholders later this year. Working out how to do so will take time.
Siri Could Be A Big Thorn In Google’s Side (Barron’s)
Barclays Capital Internet analyst Anthony DiClemente thinks that Siri “remains a threat [to Google] as long as Apple retains significant mobile OS share,” given that Google has said mobile will be 20% of all paid search, and that two thirds of mobile searches are presently coming from Apple’s iOS devices. Siri is a speech-oriented technology that directs users to a variety of data sources so it can “circumvent traditional search engines and provide the user with answers that may have originally required a search.” If Siri does disrupt traditional search then Google will have a problem.
Steve Jobs Approached CBS For TV Content (The Hollywood Reporter)
Leslie Moonves, the CEO of CBS, said that he was approached by Steve Jobs to provide content for Apple’s long-rumoured television subscription service. Ultimately he said he wasn’t interested in providing CBS shows or films to the venture out of concern for existing revenue streams. “I told Steve, ‘You know more than me about 99 per cent of things but I know more about the television business.'” Moonves said Jobs, in characteristic fashion, strongly disagreed with his assessment. And in the coming years, Moonves will likely eat his words. Do you think it would have been better for CBS to do a deal with Apple?
Apple Adding Slew Of Korean-American Attorneys To Fight Samsung (FOSS Patents)
Two things recently happened that increase Apple’s chances of dealing with the language barrier in fighting Samsung: Apple brought in 73 Korean-American contract attorneys and 20 reviewers to sift through tons of documents. And in one of the federal lawsuits, Apple was given a chance to take second depositions of up to 10 Samsung witnesses since it previously didn’t have a fair chance to sift through late-produced documents in time for the original depositions.
Apple Commits To More Jobs In The U.S. (MacRumors)
The State of Texas announced that Apple has committed to spend $304 million to expand its operations in Austin, seeking to add 3,600 employees to its facilities there. That will more than double the size of Apple’s workforce in Texas over the next decade. The purpose of the expansion will be to support the company’s growing operations in the Americas with expanded customer support, sales and accounting functions for the region.
Apple Already Admitting Fault In eBook Case (BetaNews)
Apple has already admitted to two of the most damaging allegations in the case that the Federal Government is likely to include in the eBook price-fixing case. The heart of the case is the agreement struck with publishers which changed the way eBooks are sold to retailers. Apple has already admitted to the central facts of the case, which could strengthen the government’s position should Apple lose in civil court, although it attempts to argue its decisions were for competitive and financial reasons. Best bet is to settle out of court.
Let’s Clarify This Post-PC Era Nonsense (PCWorld)
The idea of the “post-PC era” needs some clarification. There is much hoopla and fanfare being dedicated to dwindling PC sales, and the idea that tablets are going to be the death knell for PCs. It’s not a “death”, it’s an “evolution” and the tablet is just the new PC. The advent of tablets may be a harbinger of doom for traditional operating systems like Windows and Mac OS X, but not for PCs. The tablet is a PC itself, it is a device or platform a person uses for computing.
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