Apple (AAPL) shareholders have had something to cheer about over the last two months after almost a year of misery. The stock had gone from over $700 a share last September to under $400 in late June before rebounding recently to ~$500 a share.
The Apple story and its stock could get much stronger this week based on two events. First, the company is unveiling the next version of its iconic iPhone franchise on September 10th. One of main reasons the stock has gone up nicely recently has been as a buildup to this critical product launch. How analysts/reviewers react to the new version of the iPhone will be crucial to whether the stock can continue its momentum.
If reviews come out along the lines of "Apple's new smartphone is a great combination of some interesting new features while incorporating the Android type functions it was missing", it bodes well. However, if reviews fall more towards "Apple's new iPhone unveiling shows why the company misses visionary Steve Jobs", this will not be a good sign. Also look for how analysts incorporate the new launch into their quarterly iPhone sale projections going forward after the new phone is revealed.
More importantly for Apple's long term prospects, this could be the week that Apple finally announces a deal with China Mobile (CHL). It is hard to overstate how much of a positive this would be for Apple's revenue and earnings growth going forward. China Mobile has some ~700mm subscribers and analysts have opined on CNBC and in Barron's that this could mean more than 15mm additional iPhone sales in 2014 if the companies partnered.
There are very good indicators this deal is going to happen and happen soon. UBS raised its price target recently to $560 a share partly on the belief this partnership will be consummated. In addition, the company has scheduled a follow up iPhone event in Beijing for the first time right after its main new product unveiling. Speculation is rampant that a deal between the companies will be announced at this time. Finally, a WSJ article just stated Apple is preparing to begin shipping iPhones to China Mobile.
If these two key events do not amount to enough positive catalysts for one week, there are multiple reports that Apple is also close to closing a partnership deal with NTT DoCoMo (DCM) and its ~60mm users.
Even after its recent run, Apple is still cheap at around 8x next year's earnings after removing its huge $100B plus of cash holdings. If the launch of the new iPhone is well received and Apple signs China Mobile and/or NTT Docomo, the stock could have an end of the year that will help erase the memories of the pain of the last quarter of 2012.