Any Weakness In Apple Is A Buying Opportunity

Jun.19.12 | About: Apple Inc. (AAPL)

Apple (NASDAQ:AAPL) is the company that started the tablet revolution and now with tablets quickly becoming as popular as PCs, Apple is clearly one of the best positioned companies for the transition to mobile. Investors pay careful attention to Apple's announcements for a window into the computing industry as a whole. Last week, Apple's annual Worldwide Developers Conference (WWDC) was held in San Francisco and Apple made several announcements, none of which seemed to help Apple's stock.

While all of Apple's announcements seemed positive for both the company and the development community, many investors expected more news about the next iPhone. A lot of people still expect it to be released in the fall, even though Apple failed to confirm that. The announcements began when Siri (the iPhone's personal assistant) provided some impressive statistics from Apple's App Store. The Store is available in 155 countries, 30 billion apps have been downloaded, 650,000 apps are now available and Apple has paid out 5 billion dollars to developers.

Apple went on to announce updates to its line of Macbook products. The new Macbook Air will feature an Intel (NASDAQ:INTC) Ivy Bridge chip with 8GB RAM and 512GB flash storage, a 720p upgrade to the Face-Time camera and USB 3.0. With a better graphics chip, faster data transfers and an upgraded camera, the 11-inch MacBook Air is priced at $999 and $1099 depending on how much storage space is included. The MacBook Pro will get the same upgrade treatment and the 13-inch is $1199 or $1499 and the 15-inch costs $1799 or $2199, which is similar to previous incarnations of MacBook Pros.

The final update to the MacBook line is the high-end Retina MacBook Pro. Apple boasts that the Retina display has pixels that are so small your retina cannot discern them. It's a 15.4-inch screen, weighing 4.5 pounds, that is about as thin as the MacBook Air. It contains a quad-core Intel Ivy Bridge chip and an NVIDIA graphics chip, along with a backlit keyboard, HDMI port, USB 3.0 and iPhoto, Aperture, Mail, and Safari are all updated to Retina display-quality graphics. The Retina MacBook Pro is clearly targeted towards the well off techies looking to buy the next hot gadget and the price starts at $2199.

Some of the other announcements made involved a small operating system upgrade to the new Mountain Lion and the debut of iOS 6 in the fall. It is the fall release of iOS 6 in the fall that has analysts thinking the next iPhone may be released at the same time. A new Maps app was added, which no longer uses Google (NASDAQ:GOOG), but is designed by Apple's team. It also has traffic info and turn-by-turn directions that can also be spoken by Siri. Apple also finally integrated Facebook into the operating system and users will be able to log in on a system level just like they are able to do with Twitter now. This update is just keeping pace with Android and Windows Phone - which have had the feature for years now. Siri will be available on the new iPad through an update to the iOS. The Safari browser will also get a smart search bar like the one featured in Google Chrome.

On Monday, June 18th, Microsoft (NASDAQ:MSFT) announced it would be entering the hardware business and created a thin mobile PC called the 'Surface'. Microsoft was very careful not to call it a tablet, probably because the company wanted to stress its powerful features. In the presentation, Microsoft said it could do the same tasks as a desktop PC could perform. For more of the features of the Microsoft Surface read about its announcement here.

While Microsoft's new product is directly designed to compete with Apple for tablet market share, there are several reasons why this may not hurt Apple stock. First, Microsoft seems to be targeting very high end customers, stating that the price would be comparable to the Ultrabook. Ultrabooks start at around $1000, which is twice what the average tablet PC is selling for. This may put the Surface in an entirely different market than the iPad. Next, the Apple ecosystem is so much more developed than Microsoft's and it will take a while before developers can catch up with apps and games. Meaning the new Surface might initially be used by consumers for business computing and the average person may not need that much power in a tablet.

The news of Microsoft's tablet will probably put some pressure on the Apple stock. While investors were also hoping for more news out of the WWDC, the past few years traders bought leading up to the conference and sold after the announcements. Apple also has one of the lower P/E ratios in the technology sector and it may only be a matter of time before investors realize that it deserves a higher multiple than companies like Facebook (NASDAQ:FB). With all of Apple's positive news, the new iPad last March and the new iPhone this fall, I think any weakness in the stock due to Microsoft's announcement or unmet expectations at the WWDC, makes the stock a good buying opportunity.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AAPL over the next 72 hours.