THE APPLE INVESTOR: Only Supply Constraining The iPad Now, But Critics Say Android Will Crush It Within Three Years

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AAPL Up With Tech
The market is shaky in early trading ahead of the Federal Reserve’s assessment of the economy this afternoon. Shares of AAPL, however, are up a solid percentage point. Upcoming catalysts include the WWDC starting June 6; iPad 2 sales updates; the next iPhone launch this fall; smartphone push into China and emerging markets; iTunes and other cloud initiatives; the continued evolution and adoption of Apple TV; and new platforms such as video, books / publishing and social (Ping). Shares of Apple trade at 11x Enterprise Value / Trailing Twelve Months Free Cash Flow(incl. long-term marketable securities).

Apple Captures Just 5% Smartphone Market, But 55% Of The Global Profits (Asymco)
Asymco analyst Horace Dediu created various charts illustrating that although Apple has just 5% of the global smartphone market, it raked in 55% of the global profits in the first quarter. In terms of profitability, competitors such as LG, Sony Ericsson and Motorola nearly vanish in terms of profitability. Three years ago Nokia was earning 47% profit share or $2.35 billion. This past quarter Apple’s 57% was equivalent to $5.23 billion, more than 2x as much.

Supply Constraints Limiting Apple’s iPad Production Goals (Business Insider)
FBR analyst Craig Berger claims that Apple’s goal of producing 40-45 million iPads is “out of reach”. Apple’s current second-quarter production target is 6.2 million iPad units, but that may not be possible due to production issues. Berger says touchscreen availability and Hon Hai production problems are limiting Apple. Well, if the are limiting Apple, I can only imagine how the competition is feeling.

NVIDIA CEO Says Android Will Crush iPad Within Three Years (Reuters)
Jen-Hsun Huang, CEO of NVIDIA, is the latest outspoken executive to predict that, within three years, Android tablets will be outselling Apple’s iPad. Huang pointed to the rapid progress of Android smartphones over the past few years, suggesting that the same pattern would hold true in tablets. So far, not so much. The year is nearly half over and so far the iPad doesn’t have any credible competition.

Pharma Sales Turning To The iPad To Win Doctors And Hospitals (Mac Observer)
Medical facilities are increasingly using iPads in the workplace. Apple has always enjoyed showing medical applications in keynotes and commercials. And big pharmaceutical companies spend a lot of time, money and effort trying to attract the attention of doctors in order to get them to use their expensive new products. So now big pharma is turning to the iPad as a way to grab doctors’ attention. Yet another use case in the enterprise.

Apple Retail Anniversary Coming Up, But What’s The NDA For? (Boy Genius Report)
Apple may be planning something big for its 10th retail anniversary which is tomorrow. The dirt:

  • There’s an overnight shift planned over the weekend for each Apple Store requiring employees lock cell phones in the main office and sign NDAs
  • Apple stores have apparently already received hardware to install, which is under lock and key
  • Black curtains will be hung in the windows of all stores so that passersby can’t peek
  • Employees have had to download gigabytes of “training” data

Dan Frommer at Business Insider doesn’t think it’s anything important like a new product launch. Apple Insider thinks that it could be an early back-to-school promotion. That would be early considering half the country isn’t even out of school yet.

NFC Payment Processing Coming To All Apple Stores; Meaning NFC iPhones Not Far Behind (Edible Apple)
Apple may be integrating NFC technology into its stores. Apple’s POS devices (iPod touch-based wireless payment terminals) recently all went offline for “maintenance,” leaving customers unable to purchase some items or return merchandise. Assuming the rumour true, NFC enabled iPhones could be closer than we think, despite reports to the contrary. This also might be the hoopla related to the 10-year anniversary of Apple’s retail initiative.