The Apple Investor is a daily report from SAI. Sign up here to receive it by email.
Photo: Wikimedia Commons
AAPL Struggling In A Down Market
Stocks are in a slump this morning as investors fear Spain’s banking troubles. Shares of AAPL are recovering to flat after being off with the rest of tech as Facebook falls again. Upcoming events Apple’s developer conference (WWDC) slated to start June 11 (where the company is expected to make a slew of announcements). 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 as well as the upcoming refresh; the introduction of the anticipated Apple TV set; and platforms such as Siri, iAd and iBooks. Shares of Apple trade at 9.0x Enterprise Value / Trailing Twelve Months Free Cash Flow(including long-term marketable securities).
Analyst Pounds The Table On Apple For Obvious Reasons (BGR)
He’s pretty late to the party. RBC Capital Markets analyst Amit Daryanani believes Apple will revamp its MacBook computers in June and release a new iPhone in September or October. He reiterated his Outperform rating and maintained his price target of $700, which is achievable thanks to new MacBooks, the upcoming next-generation iPhone and a potential “iTV” television set, which makes “strategic sense.” An “updated version” of the MacBook Air could also potentially happen in six months, which could help sales of the entire Mac lineup to grow between 10% to 15% this year.
What You Need To Know From Tim Cook’s Keynote (Business Insider)
The highlights from the All Things D Conference:
- Tim Cook teased the audience by mentioning “the things I cannot talk about today.” He of course is alluding to the WWDC in two weeks where Apple has “some incredible things coming.”
- He reiterates that he believes iPads will be bigger than PCs. Likely a safe bet.
- He will run Apple differently than Jobs saying, “I love museums but I don’t want to live in one.”
- On why he fights patents: Engineers give their lives to products. And then someone rips it off. That’s not right.
- He outlines how the smartphone competition is in the early days, so anything can change.
- “One thing is that we’re not fragmented. Look at the percentage of users who upgraded to iOS 5. We have one App Store. We have one phone with one screen size, one resolution. So it’s pretty simple if you’re a developer.” Does this mean no new 4-inch iPhone that has been rumoured?
- Apple TV is growing nicely. Last year they sold 3 million and they’ve already sold 2.7 million this year.
- In terms of an actual TV set, Cook says “I would say most people would say this is not an area in their life that they’re pleased with. And we’re going to keep looking at it.”
- Cook also spoke about “a lot going on” in terms of further development with Siri. Do you think Siri will ever be as good as it is in the Apple ads?
Overall, pretty boring.
Three Problems Apple Faces In The Near-Term (kickingbear)
Guy English takes his shots. He lists the top three things that should trouble Apple in the near-term:
- Content Management: If you can’t figure out how to make that direct connection to the creatives then you’ll always be stuck with a middleman that doesn’t have to be there. The risk here is that someone comes along with a more simple and direct method of dealing with media content in the mobile space.
- iTunes: iTunes is dead. But it’s still the big play, but it needs a rethink. iCloud is a start. But it can’t yet carry all the water. The risk here is that someone else figures out the formula and the deals to appeal to the majority of content consumers.
- People: iOS was launched in 2007. It’s been five years since the original team were granted stock options. Ultimately, the retention of talent will be Apple’s Achilles’ heel.
Time to play hardball.
Tim Cook Gets Closer To Washington (CNN Money)
Tim Cook got barely any notice when he slipped into the Capitol last Tuesday for a handful of meetings with Congressional leaders. But the fact that Cook visited at all signals a subtle but significant pivot for the outfit inside the Beltway. Apple has hewed to a studiously hands-off lobbying strategy because of Steve Jobs’ aversion to tangling with policy making. As his successor begins to put his own imprint on the company, however, Cook wants Washington to know they now have an open line of communication.
Foxconn rumoured To Start Trial Production Of Apple’s TV (China Business News via WantChinaTimes)
Apple’s long-awaited television set may finally be in the works. Foxconn, Apple’s Chinese manufacturing partner, is in the very early stages of producing the new TV, according to a report. The publication is hearing that Foxconn has received orders for an Apple TV and is currently in the “trial production stage.” This matches up with the timeline laid out by noted Apple analyst Gene Munster who predicted that the TV would be announced this December and begin shipping in early 2013.
labour Shortages Affecting New MacBook Production (DigiTimes)
As Apple’s new MacBooks are expected to launch in the near future, the related supply chain is reportedly facing labour shortages because of strong orders from Apple. Some supply chain makers are even outsourcing orders to meet shipment schedules, according to sources. Component manufacturing plants in eastern China have reportedly been suffering from labour shortages for a long time. Component shipments are expected to continue to rise in June, with the new MacBooks possibly launch in July. Shipments have a chance to grow from 12.79 million units in 2011 to 16.24-19.2 million units in 2012, up 30-50% year-over-year.
Goodbye Google Maps, Hello 3D Apple Mapping (BGR)
Apple has been working on an in-house mapping solution for a few years (plus some acquisitions), and it appears as if the company is finally ready to release a new Maps app for iOS, sidestepping Google’s mapping data for its own. Now there are pictures to actually prove it. Apple is putting the finishing touches on its 3D mapping functionality, and it is currently being tested in build 10A3XX of iOS 6.
The TSA Is Looking To Use Apple To Fight Terrorism (Apple Insider)
The U.S. Transportation Security Administration is set to initiate a pilot program to purchase up to $3 million dollars worth of Apple hardware over the next three years, including 1,000 Macs and 1,000 mobile devices. The products will find use in certain areas of TSA’s Risk Based Counter-Terrorism mission and are deemed “critical to meet a variety of operational, programmatic, and mission specific requirements.” They will also “fill a gap” in the TSA’s existing hardware ecosystem.
Apple Tops Goldman’s VIP List For Hedge Fund Holdings (Market Folly via Apple Insider)
Goldman Sachs released its Hedge Fund Trend Monitor report for the first quarter of 2012, which includes the 50 stocks that appear most often among the “top 10 holdings of fundamental focused hedge funds.” Apple had a clear lead with 106 funds listing it in their top 10, followed by Google with 73 funds choosing it. The list has It has “outperformed the S&P 500 by 55 bp on a quarterly basis since 2001.”
Smartphones And Tablets Now Make Up 20% Of Online Traffic (Chitika via All Things Digital)
Mobile Web browsing continues to take off, with smartphones and tablets accounting for 20% of online traffic in the U.S. and Canada, according to Chitika. Smartphones account for 14.6% and tablets make up 5.6%. Of note, tablet and mobile phone Internet usage peaks in the evening hours when people leave their computers for a bit and pretend to have a life, but are really just staring at their phones or sitting on the couch watching TV and simultaneously pawing an iPad. Speaking of, 95% of tablet Web traffic comes from an iPad, compared to phones, where Apple’s share is 72%, compared to 26% for Android devices.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.