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Photo: Canaccord Genuity and IDC
AAPL Hitting New Highs
Shares of AAPL have completely broken out technically over the past several days, reaching new highs, and propelling overall September gains. Upcoming catalysts for AAPL include monthly NPD data (Mac / iPod business); iPhone sales updates and carrier diversification; iPad sales updates and expansion; new content revenue streams such as video and books; and the uptake of the newly refreshed Apple TV. AAPL trades at 16x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).iPhone Coming To Verizon Early 2011 And AT&T Isn’t Scared (AppleInsider)
According to Susquehanna Financial Group analyst Jeffrey Fidacaro, Apple is expected to build its first Verizon-compatible CDMA iPhones this December. Checks with overseas suppliers indicated Apple is prepared to build 3 million CDMA iPhones. This means the device is on track for early 2011 launch. Meanwhile, AT&T is saying that they aren’t afraid of losing iPhone exclusivity. They should be. I bet I am not the only one that didn’t purchase the new iPhone 4 so I could switch to Verizon early next year.
While Apple Lags In Unit Sales, It Crushes The Competition On Margin (Fortune)
Canaccord Genuity initiated coverage of Apple with a Buy rating and a price-target of $356 per share. Of note, Apple sold 17 million mobile handsets in the first half of 2010, compared with 400 million handsets sold by Nokia, Samsung and LG. Yet, the company pulled in 39% of the industry’s profits during that period, more than the 32% earned by the world’s three largest handset makers combined. Apple’s ability to monetise through selling high-margin consumer products that drive strong earnings results and growth trends is staggering. Most OEMs struggle to post a profit while Apple boasts roughly 50% gross margin and 30%+ operating margin for its iPhone products.
South Korea On Target To Hit 1.2 million iPhone Mark In Under A Year (Electronista)
South Korea’s KT (mobile telecommunications provider) said the company had passed the one million iPhone sales mark nine months in August, ahead of the iPhone 4 arrival. Sales are accelerating with the launch of the current model and the provider is working on fulfilling the 350,000 units of back orders. The company expects to reach 1.2 million iPhone sales in October.
Research In Motion To Allow Tablet Tethering With Other Blackberry Device (The Wall Street Journal)
Research In Motion has had questionable success in updating handsets to be competitive in a post-iPhone world, but the company is going to challenge the iPad nonetheless. rumoured to be named the BlackPad, RIM’s tablet is expected to run some variation of the the QNX operating system instead of the company’s own Blackberry OS 6. At 7 inches, the BlackPad would be closer to Samsung’s Galaxy Tab. The one differentiator, RIM might offer 3G tethering to a Blackberry smart phone. Which in theory would cut down on another service fee, but would also mean you have to have a Blackberry.
Three Key Influences That Will Make The iPad More Successful Than The iPhone In China (Forbes)
Last week Apple launched the iPad in China and many analysts, despite lines being outrageous, wonder whether the device will be a success (I’m going to go with yes). Shaun Rein at Forbes outlines three key things Apple is doing right with the iPad where it might have failed with the iPhone:
- Catering to Chinese customers (users in China prefer pay-as-you-go, with the WiFi version they aren’t stuck in a contract)
- Faster time to market (it took forever for China to get the iPhone)
- Apple will have stores open during the launch.
Apple In Partnership With Rovi To Expand Apple TV (All Things Digital)
If Apple TV is still a “hobby,” what does it want with the in-home and mobile entertainment company Rovi? According to an SEC filing, Apple and Rovi entered into a multi-year agreement. Given Rovi’s business, it seems likely that Apple is after the same interactive television program guides the company licenses to digital cable/satellite providers and set-top box manufacturers. Piper Jaffray analyst Gene Munster believes the partnership “is further evidence that Apple is developing live TV and DVR features for its Apple TV product.”
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