THE APPLE INVESTOR: Has Apple Missed The Social Music Boat?

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sinking boat

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AAPL Sideways As Europe Figures It Out
Stocks are on the rise in early trading ahead of key meetings in Europe (follow LIVE coverage here) strong earnings reports as well as durable goods beating expectations. Shares of AAPL are moving sideways with the rest of technology. Catalysts include upgrade cycle and conversion to the iPhone 4S and response to the free iPhone 3GS; update to the iPad in early 2012; continued growth of the Mac business line; mobile adoption in China and emerging markets; the evolution and reconstruction of Apple TV (see below); and platforms such as mobile advertising (iAd), books / publishing and social (Ping). Shares of Apple trade at 8.8x Enterprise Value / Trailing Twelve Months Free Cash Flow (including long-term marketable securities).iTunes Mastermind Said To Be The Guy Behind The New Apple TV (Bloomberg)
Apple is turning to Jeff Robbin, the software engineer who helped create the iPod and built iTunes, to help lead its development of the Apple HDTV project. Robbin’s involvement is a sign of Apple’s commitment to extending its leadership in smartphones and tablets into the living room. Steve Jobs told biographer Walter Isaacson that he had “finally cracked” how to build an integrated TV. Outside of Jobs’ remarks, Apple hasn’t acknowledged that it’s developing a TV set. And it won’t until we see it. Many say it won’t change the TV industry.

Analysts Try And Size The TV Market That Apple Is Going To Enter (Various)
Dovetailing off of Steve Jobs’ TV comments:

  • Combining Live TV With iCloud (CNN Money): Piper Jaffray analyst Gene Munster believes that a significant hurdle to a full-fledged Apple television set (as opposed to the Apple TV set-top box) is combining live television with shows previously captured on iCloud. He believes that of the estimated 220 million flat panel TVs estimated to be sold in 2012, 48% or 106 million units will be internet-connected, of which Apple could sell 1.4 million units (dependent on launch date of course), which could add $2.5 billion or 2% to revenue next year.
  • The $100 Billion Opportunity (AppleInsider): Brian White with Ticonderoga Securities anticipates Apple’s high-definition television set, complete with iOS features including Siri voice commands, FaceTime video chat and access to the App Store, to be a strong product in a massive $100 billion market. Prototypes are already being made in China. Apple would maintain margins by charging a “healthy premium” when compared to competitors. Per usual.

When do you anticipate the TV launching?

Feels Like Apple Is Playing Catch Up In Music Sharing And Streaming (GigaOM)
The music service Google is close to launching will include sharing features via integration with its Google+ platform. For Apple, the new social features Google is offering will reinforce that Apple and iTunes are falling behind in the social-music race. By any measure, iTunes is still the 800-pound gorilla of the digital-music industry. But despite Twitter’s recent Ping integration, it still feels like Apple is playing catch-up in an industry that is quickly moving towards sharing and streaming of music.

rumour Says Apple To Join LTE Race Next Year With New iPhone (Digitimes)
Apple is expected to launch a new version of the iPhone handset next year that will include an embedded 4G LTE radio, according to industry sources in Taiwan. I’m going to say this is not likely. There will be millions of pissed off iPhone 4S holders. In the U.S., most of the current 4G share of smartphones is held by HTC, while other major vendors including Samsung, Motorola and LG all sell LTE-enabled models. But things will heat up in the mobile industry as Sprint’s LTE network kicks into full gear in mid-2012.

Modest Android Sales Could Be Sign That Users Are Switching To iPhone 4S (BGR)
Morgan Keegan analyst Tavis McCourt believes smartphone sales dipped sequentially during the third quarter of this year. That is likely due to consumer anticipation for the iPhone 4S, however Android sales weren’t immune either despite the introduction of a number of new handsets. He believes this is an “ominous sign for Android vendors.” It could be the fact that Android and Blackberry users were “waiting to switch to the iPhone.” If true, that’s great for Apple as switching consumers get tied up in 2-year carrier contracts. Tablet Shipments Overtake Netbook Shipments During The Second Quarter (BGR)
Global tablet sales into channels exploded in the second quarter of 2011 to surpass netbooks for the first time, according to ABI Research. Tablets grew 112.5% in the second quarter to reach 13.6 million units, up from 6.4 million tablets in the first quarter. Comparatively, netbook shipments declined from 8.4 million units to 7.3 million over the same period. Or just over half the number of tablets shipped. This is a phenomenon not likely to reverse. Apple’s iPad was responsible for 68% of tablets shipped globally in the second quarter.Android Beats Out iOS For Mobile Ad Impressions (AppleInsider)
Android captured 56% of all ad impressions during the third quarter, outshining Apple’s iOS, which accounted for only 28% according to on Millennial Media. BlackBerry followed in third place with 13% of ad impressions while Symbian (Nokia) and Windows devices were responsible for just 1 per cent of ads each. Android took over the lead this past year “due in part to their contrasting strategy to iOS, allowing multiple device manufacturers to have access to their platform.” Yes, that is the whole ball of wax right there. Which will win?

Siri Co-Founder Bails Right After The Launch To Launch Something New (All Things Digital)
Siri co-founder and CEO Dag Kittlaus has left Apple just days after the iPhone 4S launch. He had been planning a departure from Apple for a while due to a desire to take time off, be closer to family and brainstorm new ideas (read launching a new startup). His departure is said not to affect the future development of Siri as other members of the Siri executive team are expected to remain at Apple.

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