Research archive for AAPL

Apple was a huge drag on the broader index which eventually ended as close to flat as one could possibly imagine. Down a whopping 12 percent is where Apple finished, we are reminded that this is a very widely owned stock and if the majors are pushing and getting out at any level, it will have an impact. 52 million shares traded yesterday, that is around 5.4 percent of the entire outstanding shares (938 million) of Apple. 5.4 percent? In one day? At that run rate the entire share capital of the company would swap hands in less than 19 trading days. Talk about making up your mind!

Sometimes when you are expecting Wagyu Kobe beef steak (the finest I am told, 258 Dollars per kg – 2321 ZAR per kg, it better be!) and instead you are slapped with a filet mignon. Apologies to my vegetarian, Hindi, Muslim and Jewish friends, you can send me another comparison. What I am talking about are the Apple results. You were expecting world class and all you got was enough to make the national team. Not all bad, because as the headline says: Apple Reports Record Results.

There is no doubt that Apple has lost market share. It was inevitable. When you have those kinds of margins as first movers in the high end smartphone market, it is standard economics 101 that competitors will see those abnormal returns and try and get their piece of the pie. Samsung have been worthy competitors responsible for 31.3% of shipments in the third quarter of 2012 compared to Apple's 14.6%. For Apple however it was never about market share of shipments, it was market share of profits of which they pulled in over 60% at the end of last year.

Tech stocks in New York, New York. 40o 43' 0" N, 74o 0' 0" W were dragged lower as a result of Apple inc. getting completely flushed. The stock was down nearly six and a half percent. Why? Well, the two reasons that people could come up with was a rise in the dividend taxes coming (another dumb idea in my opinion, the company is taxed, why should the investor be taxed too?) and perhaps Apple is losing traction in their dominance of the tablet market. Those were the two reasons that I could see directly. TechCrunch had this piece: Apple Drops 6.4% Due To Volatility And Uncertainty: The iPad Mini Is Out, Now What? And then there was another one, which quotes well known Apple analyst from Piper Jaffray, a fellow by the name of Gene Munster. Did You See Gene Munster's Opinion of the Massive Apple Inc. (AAPL) Selloff?

The going has been tough for Apple shareholders over the last 6 to 7 weeks, for a number of reasons. After having started the year at roughly 405 Dollars per share the stock rose all the way up to 700 Dollars plus by mid September. An amazing and meteoric rise for any company, but this now became the most valuable company in America. People want these expensive products, because they are beautifully crafted. But in recent weeks there have been unrest and problems with their outsourced manufacturing facilities in China, and people have just not been able to get their new iPhone 5. The iPad mini has been priced at perhaps a little too expensive, and there might be margin compression there at some stage, as well as cannibalization away from their main product offering in that regard. The iPad 3 was given an upgrade. Some are expecting an iPhone 6 shortly and are almost willing to wait a little longer for that. That could see the current quarters iPhone sales fall comfortably short of the estimates. The quicker product cycle might not necessarily be a good thing for the allure of the products.

Apple missed expectations last evening, the company reported Fourth Quarter Results after the bell. A record September quarter, with revenue of 36 billion Dollars and profits of 8.2 billion Dollars, which in turn translated to basic earnings per share of 8.76 Dollars. A dividend of 2.65 Dollars per share was declared. Revenues were ahead of expectations, iPhone sales were ahead of expectations at 26.9 million units. That was an increase of 58 percent over the corresponding quarter last year. That is huge, but the shareholders expect that, huge increases. iPad sales on the other hand fell light of expectations. Some folks are saying that the iPad miss is more than just a little disappointing. And the mini, what does it mean for those sales when the pricing is quite aggressive. Mac sales, Paul got one the other day, also set a record meaning that the migration across to the laptop from more traditional places has happened too. Once people get used to the quality, they want Apple in all of their hardware.

Yesterday, as I am sure you have already heard, Apple released the iPad mini. Before I establish an opinion on these product releases based on what everyone else has to say I go straight to the Apple website and watch the clip explaining the new product. Then you can go ahead and read what everyone else has to say. Here is the clip so you can watch it before you read what I have to say. iPad mini overview.

There has been a fair amount of negative press concerning Apple over the last few weeks. First there was the Apple map saga which required a formal apology from CEO Tim Cook. This would have had Steve Jobs rolling in his grave. And now there are talks of production concerns, a fall in demand for the iPhone 5 in the US and some issues with the iPhone 5 cover. This has caused the share price to pull back more than 14% from its recent highs.

What? You want more? Over the first weekend of sales of the iPhone 5 there were "only" five million. People were expecting closer to six million, even though the phone itself was the single biggest weekend for Apple ever. I even heard about a scuffle outside the Apple flagship store in New York. That was not good. What was good however is that the phone sold out completely. Not one left. Apple spent a month building the phone en masse. So we are going to have loads more, right? Well, not so fast, we might have a slight delay, when I read Foxconn China plant closed after 2,000 riot. This is just one Foxconn factory, the Taiwanese company employs one million people in China. So perhaps whilst this continues to highlight the concerns of the working conditions (this is a global thing you see) the roll out for richer consumers of their favourite product might be stalled for a while. Either way I guess this is not the best news for Apple the company. Related, the WSJ reports New iPhone Sellout Tests Apple Supply.

Apple shares reached a record high yesterday crossing $700 for the first time ever. The scariest thing about this company is on an earnings basis it doesn't even look expensive. The company has just grown so fast and made so much money that earnings have always justified the rise in share price. We started buying the stock for clients "at all time highs" in April 2010 at around $250 a share. I'm telling you this to emphasise that you should not avoid a stock because it is trading at all time highs.

If you have been following the iPhone 5 news closely you will have seen talk about the success of the product being vital for the US economy. in fact J.P Morgan released the following research note which looked at the impact of iPhone sales on US GDP. Here are some extracts from the note.

The most amazing thing, before the FOMC meeting of course was the big release! Is the new iPhone 5 all wow and worth the excitement that some associate with the product? I "watched" the release of the phone by drifting through my Twitter stream and by following live blogging from cnet, this link is what you need to follow to compare the specs of the last version, and the new one: So, what's new? Comparing the iPhone 4S and iPhone 5. You can also check out the Apple iPhone 5 on the producers website.

Apple will supposedly unveil the newest iPhone today. Not quite the iPhone 4, because the 4S came after 4. There was of course no iPhone 2, we went straight to 3. For 3G, I think, the 3GS was a better version. Cnet are following it if you want to feel it and be a part of it: Apple's iPhone event: Join us Wednesday (live blog). And then the link to the live blog: CNET's Apple event live blog (Wednesday, September 12). Because each release comes with more anticipation than the last, the stock could have quite easily set us up for something big, another huge leg up, and equally another fall. One way or another, this is a huge event!

This has been confusing me for a long time, the ongoing patent disputes between Samsung and Apple. I know that the two products look similar in design and feel, and the optimal design might have been held by one or the other, or both. I use optimal in the sense that the single button design is huge for the fans. Now there is actually a number, 1.05 billion Dollars in damages has been awarded to Apple by a US court, which has led the Samsung board to hold an emergency meeting overnight. A Korean court called it a tie on Friday, at least that is what a Marketwatch article says: Apple, Samsung tie in Korea verdict. The upshot of it all is that Samsung devices might be banned from selling their blockbuster products in the US. For the time being. Which is of course is not good for the company, the share price in Korea ended the day down 7.61 percent. Down 97 thousand Won on the session to close at 1,178,000 Won. More confusing is dealing with the large outlandish numbers.

Apple became the most valuable company ever last evening. But not on an inflation adjusted basis, but then again who is checking that? It turns out that there are some folks. The stock closed at a 52 week and all time high at 665.15 Dollars a share, to give the company a market valuation of 623.52 billion Dollars. This tops the Microsoft all time high back in December of 1999, where the company was grossly over-valued at 616.34 billion Dollars. The strike out is for obvious reasons, Apple currently trades on a multiple of only 15.64 times, historic that is.