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AAPL Sideways As Market Falls
Despite data being relatively benign this morning, markets are off. Weakness is likely caused by policymakers articulating that Europe’s debt crisis poses dangers to the global economy. As if we didn’t already know that. Shares of AAPL are trading sideways at the flatline while the tech tape is diving in the red. Catalysts include iPhone upgrade cycles; update to the iPad in early 2012; continued market share growth of the Mac business line (see below); penetration in China and emerging markets; the evolution and potential re-conception of Apple TV; and platforms such as mobile advertising (iAd), books / publishing, mapping and social (Ping). Shares of Apple trade at 8.5x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).The iPad Won’t Stay On Top Unless It Cuts Prices, Says Goldman Analyst (BGR)
Demand for Apple’s iPad tablet is said to be in decline as competition finally heats. Goldman Sachs analyst Bill Shope suggested Apple’s firm grip on the global tablet market may finally loosen. The analyst sees three main factors correcting the waning demand:
- Continued adoption of iCloud
- The launch of Siri on the iPad (imminent)
- Lower price points.
Despite all this, Shope is maintaining his estimates for the quarter’s iPad sales.
Will The Tablet Market Be Bigger Than The PC Market? (The Mac Screencast Guy)
Tim Cook thinks the “tablet market” will be larger than the PC market. Tablet usage will increase over time as they become even more mainstream, becoming an even more viable alternative to a traditional PC. If the current iPad can replace a good percentage of people’s computing needs, the next generation will take it to the next level, especially if new adopters of the tablet platform continue to evangelize at the current levels. If Tim Cook is right, it’s just a matter of time.
Apple On Pace For Record Holiday Mac Sales (AppleInsider)
Apple is set to have another blockbuster quarter for the Mac platform, with the latest sales data showing the company headed toward selling as many as 5.3 million over the holidays. Analyst Gene Munster with Piper Jaffray shared the latest domestic sales data from the NPD Group, which showed Mac sales up 19% year-over-year in October. As sales continue to pick up leading up to the holidays, he sees Apple selling between 5.1 million and 5.3 million Macs during the December quarter. Those numbers would represent year over year growth of between 23-28%.
MacBook Airs Now Account For 28% Of Apple’s Total Notebook Shipments (AppleInsider)
Apple’s MacBook Air models now make up 28% of the company’s notebook shipments, up from just 8% in the first half of the year. Research by Morgan Stanley analyst Katy Huberty, incorporating NPD figures, indicate Apple’s thin new MacBook Air models now account for more than a quarter of the company’s notebooks. The MacBook Air’s rapidly growing share of Apple’s notebook mix grew dramatically following the summer enhancements that brought Thunderbolt.
The iPhone 4 And 3GS Were The Top Selling Smartphones In The U.S. Last Quarter (AppleInsider)
Demonstrating the success Apple has had in continuing to sell previous-generation iPhone models at a discounted price, the iPhone 3GS was the second-best-selling smartphone in the U.S. last quarter, bested only by Apple’s iPhone 4 (despite being 1.5 years old), according to the NPD Group. And these results represent the third quarter of 2011, before the iPhone 4S became available. Apple beat out rivals like the HTC EVO 4G, Motorola Droid 3 and Samsung Intensity II.
Trouble Brewing For Apple (Business Insider)
Henry Blodget at Business Insider believes the market is focused on some specific concerns for Apple. Short-term iPhone production problems would hurt Apple’s quarter, but they would not indicate a decline in Apple’s long-term competitive advantage or margins. More intense competition in tablets, however, could directly impact sales and margins over the longer term. And as more credible alternatives appear in both markets, and Apple continues to lose unit share, Apple’s leverage over developers and media companies will continue to diminish.
Components For 15-inch Ultra-Thin MacBook Starting To Ship (DigiTimes)
MacBook lovers will only have to wait until the second quarter of next year to get the sought after 15-inch (and possibly 17-inch) MacBook Airs. Upstream suppliers have recently started shipping a small volume of components for a 15-inch ultra-thin notebook model from Apple in November. The device could be either MacBook Air or just a thinner MacBook Pro. Or just rumours.
iTunes Match Finally Launches (Various via iDygest)
Apple finally flipped the switch on iTunes Match. The program is a $25-per-year service that automatically identifies what songs you own and provides iTunes-quality matches available on any of the internet-connected mobile devices or computers. Apple is trying to make it easy to listen to your music library from any computer or iDevice you own. Meaning that any of your 128K encoded mp3s can be replaced with higher quality versions. All said and done, however, iTunes Match is not a game changer.
Apple Assigns New Board Member, Levinson Is Chairman (Bloomberg)
Apple beefed up its board by appointing Art Levinson as chairman, filling a vacancy left by the passing of Steve Jobs, and adding Disney CEO Robert Iger as a director. Levinson has been on Apple’s board since 2000. And adding Iger will likely cement ties to Disney for content. Iger will also sit on Apple’s auditing committee, an assignment that may draw scrutiny because of the ties between the two companies.
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