The Apple Investor is a daily report from SAI. Sign up here to receive it by email.
AAPL Up As Market Dives
Today is turning into a rout for commodities as the markets are drifting lower. Shares of AAPL are slightly higher trading near the flatline. Investors will be looking for the new iPad adoption; 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 11.3x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).Another Analyst Lifts Apple Stock’s Price Target To $700 (Barron’s)
ThinkEquity’s Mark McKechnie becomes the latest individual to join the “$700 Club,” raising his price target on Apple to $700 from $600 to account for what he believes will be an “iPhone 5” and a dedicated Apple television set, without going into detail. It was only a few weeks ago he raised his target to $600 from $550. He also says the heat issues off the battery in the new iPad will be ameliorated by Apple when they replace an older Qualcomm baseband chipset. It’s still a bunch of crap.
Nearly One-Quarter Of All Tech-Savvy Consumers (Ages 18-34) Are Buying The New iPad (All Things Digital)
Baird Equity Research surveyed a group of nearly 500 tech-savvy consumers between the ages of 18 and 34, and found that 24% of U.S. respondents planned to purchase the new iPad in the next three months. Among international respondents, that number rose to 29%. Interestingly, 42% of respondents (both U.S. and international) said the purchase would be their first tablet, while the remaining 48% said they already owned the iPad 2 or its predecessor.
Tim Cook In China To Discuss “Greater Investment” (SlashGear)
Tim Cook spoke with Chinese officials throughout last week while he was visiting China and representatives say that expansion is inevitable on the very near horizon. For Apple, “China is very important to us and we look forward to even greater investment and growth here.” As a reader recently pointed out, with 1.3 billion people, I would imagine so. Currently Apple has two stores in Beijing, three in Shanghai, and one in Hong Kong. Back in 2010, the company projected it would have a total of 25 stores by the end of this year.
New Apple Retail Stores Coming Across Europe (9To5Mac)
Speaking of stores, according to Apple’s 10-K report in October, we already knew that the company planned to spend approximately $900 million on retail stores during 2012. The investment would account for the opening of roughly 40 new locations throughout the year. At least some of that investment will be going towards three new stores in Germany, one in the northwest region of Spain, and others in Australia and France’s Burgundy wine region. The new stores will bring the total number of Apple stores up from the current 362 to roughly 400. Apple expects three-quarters of those 40 new locations to open outside of the United States.
The New iPad Cleared For Sale In China (All Things Digital)
Apple’s new iPad has been cleared for sale in mainland China, and could debut there as soon as next month. The China Quality Certification centre recently approved the Wi-Fi version of the device for sale in the country, granting it the Compulsory Certification necessary for Apple to sell it in China. The company hasn’t yet announced a hard launch date for the new iPad in China, but if it follows a timeline similar to that of previous devices, we could see sales begin in mid-April.
Apple Integrating Baidu Into Search Options In China (TechInAsia)
Chinese news portal Sina Tech is reporting that according to “knowledgeable sources,” Apple will integrate Baidu’s search function into its iOS mobile operating system next month. Apparently, Baidu’s cloud and mobile chief Li Mingyuan said that the company already had a comprehensive cooperation agreement with Apple in China. The implementation would give Safari users on iOS the option of setting Baidu, rather than Google, as their default search engine. Considering Baidu controls over 80% of the search market in China, it is expected that most users will make the switch.
iPad App Store By Far The Biggest Tablet App Store (The Next Web)
A report by Distimo’s, based on U.S. only data about the App Store for iPad as measured throughout February 2012, shows that two years post-iPad launch, there are now over 180,000 applications available in the App Store for iPad. That means it is growing at roughly the same pace as the App Store for iPhone and Google Play (formerly Android Market), which offered 200,000 and 175,000 applications after two years in business, respectively.
How Popular Is Siri, Really? (The Wall Street Journal)
Siri is popular but its usage is limited, according new survey research from Parks Associates. The firm surveyed nearly 500 iPhone 4S owners and asked about their usage of the virtual assistant:
- 87% iPhone 4S owners use Siri at least monthly
- Roughly 33% of iPhone 4S owners use Siri “almost daily”
- Initiating calls and texts were the most common Siri-related activities
- 26% use Siri to send email daily
The survey found that 55% of respondents were satisfied with Siri; however 9% were not.
Apple Is Still Cheap Enough For A Bite (Forbes)
With all the excitement, drama and still relatively low P/E multiple, is this cash generating behemoth still a buy? Apple’s key to success will be to keep their momentum going. Apple is good at producing quality products that continue to intrigue and excite consumers. It does an excellent job of refreshing their entire suite of products. For the longer term investor, you have to feel darn comfortable with the company’s valuations. The recent pullback may provide a good entry for this raging bull. Uh, what pullback?