Research archive for AAPL

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.

A rare miss is what the Apple earnings, posted afterhours yesterday, is being called by the boxes in front of me, and the online publications that I read. I do not think that I have bought a newspaper this year, the physical stuff I mean. I pay for subscriptions, sure, but only the online ones, and the ones that I think are worth paying for. For instance, I will not pay for a New York Times subscription, but the FT, happy to pay for that. Off the topic, apologies, back to the Apple numbers. The results are on their investor relations portion of their website and for reference sake I will be quoting from here: Apple Reports Third Quarter Results. Both the top and bottom line miss estimates, and that was a rarity for the street, it is usually the street that misses by a country mile. Notwithstanding that, these numbers are impressive if you take a few steps back, sales for the quarter clocked 35 billion Dollars, and the company reported a net profit of 8.8 billion Dollars, or 9.32 Dollars per diluted share.

I am not too sure that the Google announcement was supposed to coincide with the Apple iPhone celebrating their 5th birthday yesterday. 150 billion Dollars worth of collective sales since 2007 and 250 million of them shipped over that time is nothing short of amazing. The app store will celebrate their fourth birthday next month. The iPhone 4S was released in October last year, and was a resounding success. I have seen various analysts stick a 1000 Dollar plus price on the stock. I see that most analysts still have a conviction buy on the stock, the next quarterly numbers will be a catalyst for the stock to move higher (or lower), it has had a cracking year so far, 41 percent higher, but is lower over the last three months.

When Apple makes announcements everyone gets very excited about what new life changing products will be introduced to the world. Yesterday they had a Worldwide Developers conference which included introductions of both new hardware and software. They started it off with some interesting facts about the App store. There are now over 400 million iTunes App store accounts with access to over 650 000 apps. These have been downloaded over 30 billion times. In the last quarter over $5 billion was paid out to app developers. That is an industry that did not exist a few years ago.

There was a bit of excitement at the opening bell when the Apple share price traded up to 644 Dollars exactly, which meant that the market cap of Apple had passed through the 600 billion Dollar mark. It has been pointed out several times that Microsoft was of course a 619 billion Dollar market cap back on December 30 in 1999. General Electric got close to 600 billion Dollars in the summer (northern hemisphere) of 2000, but did not quite crack that mark. If you needed reminding, Microsoft market cap last evening was 255 billion Dollars, GE was last at 198 billion Dollars.

On Friday the US market was on the up yet Apple fell 1.7%. Of late this is almost unheard of. Apple have been extremely resilient regardless of any economic data. Apple was down on company specific news this time as worker demands in China hit the spotlight. This is not a new phenomena, Apple have faced criticism about the condition of the workers who assemble their products for years.

It was basically all about the Apple announcement (actually from Cupertino, California) for the better part of the morning in the US. We listened into the conference call, but our bandwidth was poor and the call was not always reliable. But it was awesome nevertheless to hear the analysts asking Tim Cook (CEO) and Peter Oppenheimer (CFO) questions, and to hear them answered. We thought of submitting a typical analyst question, but it was both too late and we were talking about flow channels and blue sky in the kind of way that analysts think makes them sound so smart. So we just listened to the end, not for long and then we watched the share price. The share price in the after (pre) market had initially spiked on the news of the conference call, but then fell after the company announced that they expect to "spend" 45 billion Dollars in three years.