Apple (NASDAQ:AAPL) has recently announced that Steve Jobs will be resigning as Chief Executive Officer and will be succeeded by Tim Cook. This announcement caught many investors off guard. Investors expected Jobs to step down from day-to-day operations one day, but they didn't think that it would be so soon.
After the announcement, AAPL dropped as much as 7 percent in after hours trading. AAPL is presenting long-term investors with a great buying opportunity. Many investors feel that the change in management will cause AAPL to lose focus. I don't see any evidence of this, in fact I would argue that AAPL is on track to do spectacular. Jobs has been on medical leave since January 17, with his responsibilities being handled by Cook. I see a smooth transition with no reason to panic.
Here are some positives working in Apple's favor:
Product Lineup - Iphone 5 is expected to launch this coming October. This is once again be a big driver for AAPL. Going into the fourth quarter the Iphone will once again be a big hit. Sprint (NYSE:S) is rumored to be able to sell the new Iphone at launch. This could be a big driver of earnings for AAPL, especially due to the holiday shopping season. Sprint being a value leader, could introduce a new type of customer to Apple products. Apple has long targeted premium customers through partnerships with AT&T (NYSE:T) and Verizon (NYSE:VZ). This could all change with this new partnership. Sprint would be the third national carrier to be able to sell the Iphone and will expand AAPL's potential customer base by 50 million.
International expansion - AAPL is in talks with China Mobile (NYSE:CHL) and China Telecom (NYSE:CHA). AAPL has long been trying to grow their distribution in China. A deal with two of China's largest wireless providers will grow China distribution by leaps and bounds.
Expand Market - AAPL is expected to launch a lower priced version of the Iphone 4. This version is expected to be necessary in order to compete in the emerging markets. I see AAPL gaining new market share upon launch of this lower priced device.
I'm bullish on Apple and view any pullback as a buying opportunity. The market is over reacting to the news and is presenting long-term investors with an excellent buying opportunity. Steve Jobs will still serve as Chairman of Apple and I feel will still keep an eye on the long-term direction of the company.
Apple will continue to outperform and I don't see any reasons why that would change. Apple will continue to execute its plans and will reward shareholders who keep the long-term view in mind.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.