AAPL Up Against The Grain
Stocks are fighting off a recent flurry of selling pressure, but they continue to trade in mixed fashion overall. Shares of AAPL are up about 50 basis points while the rest of the NASDAQ trades mostly in the negative. Catalysts include the news flow from the company's WWDC throughout the remainder of the week;
iPad 2 sales updates (see below) and news regarding the iPad 3; the next
iPhone launch this summer / fall; smartphone push into China and emerging markets;
iCloud adoption (see below); the continued evolution of
Apple TV; and new platforms such as video, books / publishing and social (
Ping). Shares of
Apple trade at
11x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).
Wall Street Overwhelmingly Positive On Apple's Recent Cloud And OS Announcements (Fortune) Responses continue to pour in from Wall Street regarding Apple's recent announcements. Here is a brief summary of the accolades (minus Alex Gauna):
- Piper Jaffray's Gene Munster: Bottom line is that Apple is increasing the likelihood that consumers buy multiple Apple devices. He maintains his Overweight rating and $554 price-target.
- Deutsche Bank's Chris Whitmore: iCloud will greatly increase the stickiness of the Apple platform and further differentiate it in terms of scale and size which is likely to extend Apple's leadership with developers and customers. He reiterates his Buy rating and $450 price-target.
- Barclay's Ben Reitzes: The software and service upgrades announced will help keep Apple ahead of its competitors in digital music and within the mobile ecosystem. These innovations are laying the foundation for the next round of share gains. He reiterates his Overweight rating and $465 price-target.
- Goldman Sachs' Bill Shope: Announcements enhance the value of the platform and increase barriers to entry. More importantly, few companies will be able to fully replicate. Reiterate Buy rating and $470 price-target.
- UBS Maynard Um: The seamless integration of applications and content across the Apple ecosystem will continue to drive hardware sales to consumers well into the future. He reiterates his Buy rating and $510 price-target.
- Credit Suisse's Kulbinder Garcha: This will provide Apple with a sustained level of differentiation both as a mobile device and PC vendor, thereby also allowing the company to maintain its premium pricing strategy. He reiterates Outperform rating and $500 price-target.
- Ticonderoga's Brian White: These new announcements further strengthen Apple's digital ecosystem and will drive further adoption of Apple devices. The presence and active participation by Steve Jobs during the keynote is clearly a positive. He reiterates his Buy rating and $612 price-target.
- Needham's Charlie Wolf: There is no competing service that remotely matches iCloud. He reiterates his Buy rating and $450 price-target.
- J.M.P. Securities' Alex Gauna: He reiterates his Market Perform rating stating that the recent announcements were more evolutionary than revolutionary. This is the first WWDC without a new phone and it is likely to exacerbate concerns around Apple's ability to execute without a healthy CEO.
- Wells Fargo's Jason Maynard: Apple's announcements should stem any major disruptive threats for the foreseeable future. Apple is ahead of the game from a software standpoint. Reiterated Market weight and valuation range of $400-$420.
- BMO Capital's Keith Bachman: He believes this is just the beginning of iCloud, with more features and functionality to come. Reiterates his Outperform rating and increased his price target to $420.
- RBC Capital's Mike Abramsky: Apple may expand its addressable device market by 4x, addressing the ~3B handset users who have a phone. He thinks we may see new devices based off iCloud services. He reiterates his Outperform rating with above Average Risk and price-target of $450.
And there you have it.
Read » Apple's Going To Start Releasing New Devices Every 6 Months To Compete With Android (Business Insider) Adnaan Ahmad of Berenberg Bank believes Apple is going to accelerate its iPhone and iPad release schedule to 2 upgrades a year to better compete with the onslaught of competitors. Ahmad also thinks
Apple will soon release a "cheap" iPhone priced in the $300 range (before subsidies) to fight off cheaper competition. Henry Blodget counters saying isn't the 3GS already priced in this range? It now sells for $50 after carrier subsidies with a two-year contract.
Read » iOS 5 Details And New Features (Boy Genius Report) Some highlights:
- Preference to open pages in Safari in a new page or in background
- More alert choices for emails, calendar and the ability to buy more
- Ability to create keyboard shortcuts (auto text) to replace custom phrases
- Software update option in settings to check for the latest OS
- Sync button to wireless sync to iTunes
- Ability to customize how notifications in Notification Center
- Twitter installs directly from the settings page
- FaceTime button in iMessage messages at the top now
And on and on. Take the
iOS 5 tour at Business Insider.
Read » Apple Leaks iPad Numbers, Supply Issues Are Apparently Worked Out
(Mashable and Business Insider) Apple has sold 25 million iPads in the first 14 months after its release, Scott Forstall, senior vice president of iOS software for Apple, revealed at the WWDC keynote. That's a rate of about 87,000 per day, which amounts to almost
8 million iPads for the current quarter, better numbers than anticipated. Forstall revealed a slew of other metrics: The
iTunes store has also sold 15 billion songs and Apple has paid out over $2.5 billion to App Store developers. In addition, users have downloaded a total of 14 billion applications from the iTunes App Store; including 90,000 iPad apps and 130 million downloads from the iBookstore.
Read » Apple Just Backdoored Its Way Into The Game Console Market (148Apps) One of the new iOS features is called AirPlay Mirroring. This feature replicates the functionality of Apple's AV Digital Adapter which lets you output whatever is on an iPad's screen to an external display using HDMI cable, basically backdooring into the console market. Meaning any game users play on the iPad, will be able to be played on TV. Boom, instant game console.
Read » Twitter's Big Win Over Facebook (TechCrunch) Apple announced a fairly in-depth Twitterification of the newest version of its mobile OS. Twitter will be integrated in the contacts to fetch profile pictures, as well as Maps, YouTube and Safari. The important point here is that Apple iOS 5 is using
Twitter xAuth, which is going to give Twitter a huge push as a sign-in system. This is a huge win for Twitter sign-on over
Facebook Connect as a de facto social log-in.
So much for Apple working out that deal with Facebook.
Read » Apple Just Dealt The Death Blow To Blackberry (Cult Of Mac) Apple announced what could be the death blow to
Blackberry: iMessage, a way to securely message between iDevices. You can use the service to send text, photos, videos or contacts, even group messages. This is a serious wake up call to
RIM. Their last great advantage just flew out the window. BlackBerry Messaging is unique no longer. Time to evolve or die.
Apple finally stuck a dagger into SMS.
Read » Intel In Talks To Manufacture Apple Gadget Chips (Barron's) Intel is in talks with Apple to manufacture its custom A4 and A5 chips, says
Citi analyst Glen Yeung. The semiconductor giant wants to be making and selling the chips that go into iPads and iPhones. Yeung believes Intel's "Tri-Gate" breakthrough in chip manufacturing, announced in mid-May, is "the main attraction for Apple." It wouldn't be for two more years, but
a big shift if true says Jay Yarow at
Business Insider.
Read » 
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