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  • Apple's June Quarter: The Halftime Report [View article]
    The US market is not saturated with iPhones. Sprint added the iPhone in the December quarter and at the end of the March quarter Verizon had completed only its first year as an authorized carrier. Apple recently added a few regional carriers to the list.

    Subsidized contracts run on two-year cycles and for much of the buying public the iPhone is only now becoming available as existing two-year contracts expire.
    May 22, 2012. 11:32 PM | Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    kimboslice:

    In my view Apple is oversold and the shares are trading at the low end of the valuation range established over the past 18 months. Long-term it's earnings growth that will move the share price significantly higher. Apple is generating cash at the rate of over $1 billion per week and the company will continue its strong earnings growth performance through at least the release of the successor to the iPhone 4S and next fiscal year's March quarter.
    May 22, 2012. 10:51 PM | Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    Outsider22:

    The market is not a zero sum game. As equity prices expand over the next year the capacity to increase holdings in Apple will also expand. What will fuel Apple's share price appreciation is earnings growth, not a dramatic expansion of the earnings multiple.
    May 21, 2012. 11:36 PM | 2 Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    MadMilo:

    I do expect the earnings valuation to move back to 15 times trailing 12 months earnings. Long-term, earnings growth will drive the share price not the market's intermittent moods and short-term cycles. I maintain a $790 price target on the shares and will be updating my target in concert with the release of the Braeburn Group AAPL price target index scheduled for publication in early June.
    May 21, 2012. 11:31 PM | 1 Like Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    Thomas:

    As a former technology instructor I'm in favor of device solutions that best equip students to develop the critical thinking skills needed to compete in today's global economy. A conflict of interest might exist if you were pushing device solutions based solely on the fact that you were a shareholder of the device maker. I suspect you became a shareholder after developing an appreciation for the products Apple offers and how the products assist students in achieving success.
    May 21, 2012. 11:22 PM | Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    David:

    I'm not sure about the ongoing mileage in the US for the iPhone 4S handset. Domestic sales peaked in the introductory quarter for a number of reasons I've delineated in other articles. The cellular chipset Apple will adopt for the successor flagship handset has not been formally announced and remains a matter of speculation.

    Hands down Apple's biggest growth market through the release of the successor flagship handset is the Asia-Pacific region and in particular greater China.
    May 21, 2012. 11:10 PM | Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    danf:

    You can not compare all handsets sold by Samsung to the iPhone. Samsung competes in product tiers in which Apple isn't present and in markets in which volume is the only means to achieve an adequate return.

    Apple has stated repeatedly the company does not intent to be the world's largest cell phone maker and the economics of the global smartphone market provides for multiple players operating in different segments of the overall market. Market share doesn't equate to revenue share and market share doesn't equate to profit share.

    Look at it another way. One of my long-standing axioms about Apple is the following:

    Apple doesn't sell products. Apple crafts customer relationships and these customer relationships sell Apple products.
    Apple's successful approach is based on yield per customer, not the unit sales of a particular product line.
    May 21, 2012. 11:04 PM | 2 Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    David:

    In looking at Apple's growth prospects I evaluate the iOS eco-system as a whole. Isolating the iPhone product line and comparing specs of the iPhone to Samsung's Android products in my view will not yield accurate results.

    Samsung's products are best compared to other products inside the Android eco-system. Samsung competes more with other Android handset makers than with Apple. On post-paid contracts (outside of the iPhone), most customers purchase products based on what the carrier makes available. In a way Samsung has the burden of carrying the Android market. The tech specs are only important within the eco-system in which Samsung competes and in the perceived value proposition the handsets deliver to the carriers and the customers sifting through the array of handsets using the same mobile operating system.

    Moving outside the US there's a patchwork of carrier technologies in place that will leverage (or not leverage) a handset's capabilities. Simply put, content and access to content sells more devices than the underlying tech specs. Apple's more than one-quarter billion iTunes customers provide a powerful customer base for the sales of devices, content and services. By and large the iPhone also reduces carrier churn rates and increases overall customer satisfaction with the carrier. It's why the iPhone's ASP will remain high and why carriers will push the product line.

    The carriers will deliver what the customer wants and will pay handsomely for the ability to deliver the iPhone to their customers. The tech specs are not a primary selling point with most customers.
    May 21, 2012. 10:46 PM | 1 Like Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    Camden:

    A sequential gain in revenue is possible. If it occurs it will be slight. I do expect a significant sequential drop in iPhone unit sales. However, what will drive the quarter's year-over-year revenue and earnings growth is the iPad. The Mac may also contribute a small sequential gain in unit sales. This is dependent on the timing of the product line refresh. Apple will most likely deliver lower gross margin due to the change in revenue mix with the high gross margin iPhone 4S contributing a much lower percentage of total revenue than what occurred in the December and March quarters.

    Apple ended the March quarter with only two million iPads in the global channel and Mac supply well below the target range.
    May 21, 2012. 10:54 AM | Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    chanella and music composer:

    Apple's revenue and earnings growth is best measured year-over-year, not sequentially. For example, in the December quarter Apple reported revenue of $46.333 billion and eps of $13.87. Just because the March quarter results didn't match the December quarter outcomes doesn't mean one should have expected the share price to go down.

    Apple is currently trading at below 13 times trailing 12-month earnings. This is at the low end of an established range. Apple will report strong revenue and earnings growth on a year-over-year basis in the June quarter. It's possible Apple will report a sequential gain in revenue but a decline in sequential eps due to lower overall gross margin on products sold.

    The rates of year-over-year eps growth in the June and September quarters will most likely not match the rates of growth in the December and March quarters. There are strong seasonal factors at play and the iPhone 4S delivered extraordinarily high overall gross margin in the first half of the fiscal year due to the overall percentage of revenue delivered by the product line.

    Apple will report strong year-over-year revenue and earnings growth in both the June and September quarters. It's earnings growth that will primarily drive the share price significantly higher. Last June quarter Apple reported revenue of $28.571 billion and eps of $7.79 per share. This June quarter Apple will deliver much higher revenue and eps numbers thus adding to the rolling 12-month earnings per share total. I expect the share price to return to a valuation closer to 15 times trailing 12-month earnings by early fall.
    May 21, 2012. 03:36 AM | 1 Like Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    Timing dividends might work for some investors in some instances. But timing trades to capture Apple's dividends while being out of the stock for the potential share price appreciation may ultimately limit your upside or worse. It could be a costly mistake.

    You may be regularly chasing higher share prices each successive quarter around the ex dividend date which will limit your upside gains. This may be a costly strategy versus buying and holding the shares. Under that scenario you will reap the benefits of both the dividend payouts and the share price appreciation.
    May 21, 2012. 01:12 AM | 2 Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    Outsider22:

    Apple is currently generating cash at the rate of over $1 billion per week. Gross margin is greater than 40% of reported revenue and in the March quarter nearly $.30 of each revenue dollar flowed to the net income line.

    For Apple, revenue growth is earnings growth. Strong revenue growth as a mega cap coupled with high quality earnings puts Apple in an equity class all its own.

    Because revenue is rising at a rate much higher than the rate of growth in general, selling and administrative expenses, the rate of revenue growth has a material impact on net income per revenue dollar. As the rate of revenue growth slows the percentage of revenue that reaches the net income line may diminish.
    May 21, 2012. 12:53 AM | 4 Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    I said in another comment on this article that a small investor's most effective resources are patience and information.
    May 20, 2012. 11:10 PM | 4 Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    Artimedes:

    Over the long-term Apple's earnings growth will drive the share price. Apple has another four fiscal quarters (or more) of strong earnings growth ahead. In my view there's more risk being out of Apple and sitting on the sidelines. My current price target is $790 per share. There's far more upside than downside. But don't expect "blow out" earnings in the June quarter.
    May 20, 2012. 11:09 PM | 2 Likes Like |Link to Comment
  • Apple's June Quarter: The Halftime Report [View article]
    danf:
    In the March quarter Macintosh unit sales revenue represented about 13% of reported revenue. The PC market has reached a mature phase and outside of Macintosh sales global industry revenue growth has slowed to a crawl. As early as the September quarter Apple may reemerge among the world's top 5 PC makers and the company is the most influential PC maker on the planet in terms of product innovation.

    There's little risk to Apple through continued innovation. Apple's biggest risk is a lack of innovation.

    Concerning supply chain vulnerabilities: Apple has diversified its component sources and through strategic partnerships is providing for stable lines of component supplies. From the chips used in IOS devices to the SSD technology now used in most devices, Apple continues to deploy proprietary technologies. A risk to component supplies and manufacturing capacity is somewhat remote. Apple has ample cash resources to invest in its supply chain to acquire components and manufacturing capacity as needed and from different sources.
    May 20, 2012. 09:24 PM | 5 Likes Like |Link to Comment
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