THE APPLE INVESTOR: Will Walmart Get iPad Before Back-To-School Rush?

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AAPL Being Eaten By The Market
European economic fears are dragging down the market again, sending AAPL off $5 to $253. Future catalysts for the stock include monthly NPD data (Mac / iPod business); international launch of the iPad on May 28; and the launch of the next generation iPhone (June 7 at the Worldwide Developers Conference). AAPL trades at 22x estimated fiscal-year 2010 EPS and 12x Enterprise Value / Trailing Twelve Months Free Cash Flow.

iPad Coming To The Biggest Retail Operation, Walmart (BusinessWeek)
The iPad should be available for sale at Walmart later this year, according to Walmart SVP of Entertainment, Gary Severson. Walmart currently sells the iPhone as well as various models of the iPod, so this statement seems likely to come true. With rivals promising to release iPad challengers later this year, getting the iPad into the biggest retail operation in the world is obviously good for Apple. If Walmart can have the iPad on the shelves before the back to school shopping season begins it could potentially drive sales volume. Wonder if this means price cuts are coming sooner than anticipated?

Wall Street Gets Analytical: iPad Destroying Netbook Market and Apple Holds The “Keys”

  • Morgan Stanley analyst Katy Huberty issued a monthly (April) NPD data report that showed PC unit growth decelerating to approximately 10% in April from 19% in March and 34% in February. Demand continues to recover following the Windows 7 launch late last year.  In addition, netbook penetration rate in the US appears to be stabilizing due in part to the iPad launch earlier this year.
  • CLSA Asia-Pacific Markets analyst Steven Fox believes that Apple’s Buy rating is justified because of the company’s ability to capture a disproportionate share of the profit pool from near-field communication (NFC) and location-based services (LBS). He believes “that Apple’s potential involvement in the NFC ecosystem could enable the company to hold platform ‘keys’ to not only digital music and publishing, but also mobile payments. Meanwhile, LBS can entice new revenue opportunities in its mobile ad platform, iAd.” TBI Research analyst, Rory Maher outlined these mobile phenomenons in his Mobile Commerce report back in March.

Top Mobile Publisher Blown Away By Apple’s iAd (Business Insider)
Apple might have a challenge getting advertisers to commit $1 million for the first iAds but getting publishers and app developers to use those ads will be a piece of cake. Justin Siegel, CEO of Mocospace, told Business Insider that Apple’s mobile ad team pitched him on using iAds in his app and “they’re gorgeous, and there’s no comparison in the mobile ad world.” His concern is if Apple will be able to provide enough advertisements to keep up with produced impressions. That said, if iAd is successful, Justin believes Apple’s mobile advertising platform will generate significantly more revenue for him than any other.

Hulu Says Not Adopting HTML5 But iPad App On the Way (All Things D)
Hulu says it will not be adopting HTML5 (the next version of code to power the web as supported by Apple) in the browser because the technology is not ready. Hulu continues to exclusively use Adobe’s Flash to power videos, meaning you can’t watch content on iPads and iPhones. Don’t worry, you will still be able to get Hulu on your iPad because the company is working on an app.  However, how Hulu can stream via an app without using HTML5 has yet to be explained. Most likely the app will be bundled in with Hulu’s “in-the-works subscription plan.” Yet another company skirting the Adobe vs. Apple battle.

A Company That Sells “Indulgences” Could Become The Largest U.S. Entity (SmartMoney)
As Microsoft and Exxon stock decline and Apple continues to rise, the number one company in the U.S based on market capitalisation could be the gadget giant in the near future. Apple has differed from leading companies of yore for three reasons: 1) it’s a consumer business; 2) lacks leading market share; and 3) the products are things we can live without. Apple has come out on top by “selling indulgences rather than needs.” Which begs the question, does the largest company deserve the multiple garnered for selling the “cool” factor?

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