The Apple Investor is a daily report from SAI. Sign up here to receive it by email.
Photo: Associated Press
AAPL Climbing Up In A Down Market
Despite the third drop in jobless claims in the last four weeks, stocks are dropping ahead of G20 summit. Shares of AAPL were off in early trading, but climbing back up nearly $2 midday. Upcoming catalysts for Apple include monthly NPD data (Mac / iPod business); holiday iPhone and iPad sales updates and carrier expansion; new content revenue streams such as video, books and social (Ping); moving iTunes into the cloud; and the uptake of refreshed Apple TV. AAPL trades at 15x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).Climbing Local Taiwanese Dollar Squeezing Apple Suppliers (Bloomberg)
Apple’s component suppliers in Taiwan say their earnings are being crunched as the local dollar climbs faster than the rest of Asia’s currencies in the past month, raising the prospect of higher prices. Component price increases have likely been factored into Apple’s guidance and hence the company’s more cautious gross margin forecasts. According to Shaw Wu, analyst at Kaufman Bros., “The reality is that all the vendors involved will likely absorb these higher costs.”
Apple Buys Wi-Gear For Bluetooth Headphones (9To5Mac)
Apple might have acquired wireless headphone maker Wi-Gear. Although neither Apple nor Wi-Gear have confirmed an acquisition, the Wi-Gear site says that the company “has ceased operations and is no longer in business.” The LinkedIn page of Wi-Gear co-founder Michael Kim includes Wi-Gear as his past job, and lists “iOS Bluetooth Engineer at Apple Inc.” as his current position.
Google, Facebook And Apple Battle For World Domination (Forbes)
There’s a battle for total world domination going on between the big three: In the advertising business, the more you know about your audience, the more ads you can sell. Enter Google at the expense of the whole publishing industry. But social networking is stickier than search. Enter Facebook. Finally, to round out the competition, Apple has iPod, iPhone, MacBook, iPad and now AppleTV. While all of those are very sticky, it’s not clear if Apple can keep the buzz going.
Amazon Increases Revenue Split For Newspapers, Opens Door For Apple (GigaOM)
Apple has had trouble working out a subscription model with publishers. Amazon just announced that it would be increasing the revenue split for newspapers and magazines sold in the Kindle store to 70/30. It’s the same deal Apple offers, so the Kindle store should see an influx of content. Amazon now requires that all periodicals must be able to be read on any platform on which the Kindle application appears, including the iPhone, iPad and Android devices. “Buy once, read anywhere.” Dan Frommer at Business Insider argues that this initiative paves the way for Apple to open a periodical store.
iPhone Could Double Its Market Share Next Year (IHL Group)
Antennagate, schmatenna gate. The iPhone is still outselling a number of industry veterans and looks to double its market share by next year. For current smartphone owners, the iPhone or an Android device is the phone of choice going into next year. According to IHL Group, more than 56% of current smartphone users are seriously considering an Apple iPhone and 44% an Android device for their next smartphone. Meanwhile, only 24% are considering a BlackBerry while a paltry 10% gave Microsoft‘s Windows Phone 7 any serious consideration (which might not be far off given the abysmal opening earlier this week).
Gartner Says Apple Became Fourth Largest Mobile Phone Manufacturer Last Quarter (Gartner)
Similar to IDC’s report (out two weeks ago), Gartner published its worldwide mobile phone sales estimates which shows Apple overtaking Research in Motion to become the world’s fourth-largest manufacturer not just of smartphones, but of all mobile phones. The good news for Google is that sales of Android devices easily outpaced Apple’s iPhone sales.
Daily Trader: AAPL Selling On Strength But Could Break Out Soon (The Wall Street Journal, stockpickr)
AAPL topped the list of stocks for selling on strength (stocks that rose in price but had the largest outflow of money) earlier this week. That said, AAPL is posed to breakout and is one of a few stocks for traders to keep on their radar.