Seeking Alpha

Apple roundup: iOS 8, iPhone 6, iTunes Radio

  • 9to5 Mac reports iOS 8 will feature a major overhaul of Apple Maps (AAPL). The UI will be revamped; transportation/POI data from recent acquisitions BroadMap, HopStop, and Embark will be included, and public transit directions (frequently requested) will be added.
  • Apple is also said to have "begun work on augmented reality functionality that leverages the iPhone’s compass hardware to visually see nearby points of interest," though this feature isn't expected in iOS 8. The report comes as Google launches Project Tango, a 3D-scanning/motion-tracking solution.
  • Japanese site Macotakara (has a mixed track record) reports Apple plans to launch 4.7" and 5.7" next-gen iPhones, and that the devices will take design cues from the iPod Nano (uses anodized aluminum, is available in several colors). Other reports have stated 4.7" and 5.5" iPhones are on tap.
  • An Edison Research survey of 2K Americans aged 12 and older found 8% claiming to use iTunes Radio. That figure is above Spotify's 6%, and nearly matches iHeartRadio's 9%. Pandora (P) still dominates with a 31% share.
  • Earlier: Pac Crest upgrades Apple
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Comments (23)
  • Nigel D'Souza
    , contributor
    Comments (233) | Send Message
     
    Apple's upside is entirely dependent on market expectations of future growth which is tied to new product cycles and categories.

     

    Apple's current valuation is lower than MSFT which is astounding.

     

    However, AAPL is a great asymmetric trade because the downside is limited (valuation can't get much lower plus Tim Cook buybacks) and the upside is substantially higher (a valuation in line with GOOG would push the share price over $1000)
    11 Mar 2014, 07:30 PM Reply Like
  • Ninja Trader
    , contributor
    Comments (1197) | Send Message
     
    Agreed Nigel. Also, a larger screened phone IMO will finally put AAPL at or above $600.

     

    Long AAPL
    11 Mar 2014, 07:39 PM Reply Like
  • David RG
    , contributor
    Comments (1894) | Send Message
     
    How do you figure a company with no growth right now would get a valuation anywhere near Google? And by the way, Microsoft is growing faster than Apple so it is not all that astounding.
    11 Mar 2014, 08:35 PM Reply Like
  • Nigel D'Souza
    , contributor
    Comments (233) | Send Message
     
    @David RG

     

    Apple grew over 8% from fiscal year 2012 to 2013. Apple also reported the 4th largest corporate profit (of any company) in market history for Q1 2014 (Dec 2013).

     

    By contrast, Microsoft grew by less than 6% from fiscal year 2012 to 2013.

     

    Apple's valuation is entirely based on future growth expectations. If new product cycles convince the market that Apple can maintain or grow annual revenue then the share price will appreciate substantially.
    11 Mar 2014, 08:46 PM Reply Like
  • samuel_liu
    , contributor
    Comments (2798) | Send Message
     
    "Microsoft is growing faster than Apple so it is not all that astounding."

     

    David RG:

     

    Can you cite sources to back up this claim.

     

    Thanks!
    11 Mar 2014, 08:54 PM Reply Like
  • Bigisbetter
    , contributor
    Comments (820) | Send Message
     
    Upside could be higher? But downside not lower? THat is not possible. Apple has been bumping the same stone agian. Consumers are demanding, Apple would be wise to HEAR. Google, FB Samsung hear.
    11 Mar 2014, 09:59 PM Reply Like
  • DanoX
    , contributor
    Comments (2800) | Send Message
     
    The sound of Free?
    12 Mar 2014, 02:49 PM Reply Like
  • CoffeGunsAndMoney
    , contributor
    Comments (233) | Send Message
     
    If you are looking for 8%, go home, you should never be in the stock
    market, what the hell?
    11 Mar 2014, 08:57 PM Reply Like
  • DanoX
    , contributor
    Comments (2800) | Send Message
     
    Most of the American PC OEM's are doing just that going home closing up.
    12 Mar 2014, 02:50 PM Reply Like
  • David RG
    , contributor
    Comments (1894) | Send Message
     
    "Apple now expects between $42 billion and $44 billion in revenue this quarter, down from the Wall Street estimate of $46 billion" vs. $43.6 billion in Q2 2013

     

    http://cnet.co/1iaLJtF

     

    "Microsoft has published its Q2 2014 earnings report, and the company has made $6.56 billion in net income on $24.52 billion in revenue. Revenue has increased by 14 percent from the same period last year, and net income increased by 2.8 percent"

     

    http://bit.ly/1iaLJtI
    11 Mar 2014, 08:58 PM Reply Like
  • Nigel D'Souza
    , contributor
    Comments (233) | Send Message
     
    @David

     

    You are mixing up historical earnings with earnings forecast. On a historical basis Apple has a higher growth rate than Microsoft. On a forecast basis, the market expects flat to declining earnings. AAPL is priced in with the expectations of declining earnings and is valued less than MSFT.

     

    As I stated originally, if the new product cycle convinces the market that APPL can maintain and grow revenues then the stock price will rise substantially
    11 Mar 2014, 09:05 PM Reply Like
  • David RG
    , contributor
    Comments (1894) | Send Message
     
    Apple's revenue growth was 5.6% in Q1 on the heels of the 5S and Air launches, largely due to iPods declining by 50% and iPhone sales declines YoY in North America. Earnings were exactly flat at $13.1 billion.

     

    Q2 is guided down 3% to flat. If they beat, we might see 1% increase. So through the first six months, revenue may be up 4% and earnings will be flat since GM are also flat to declining.

     

    That is my definition of no growth. They will need a heck of second half.
    11 Mar 2014, 09:34 PM Reply Like
  • samuel_liu
    , contributor
    Comments (2798) | Send Message
     
    Someone else posted that Apple would not see growth in FY 2014.

     

    Which caused me to focus on Tim Cook's words that Cn is very important. Unfortunately, most top-line products are not bought in the mainland, as they are costlier.

     

    That is the reason Michael Blair was able to surmise that the Apple-Cn Mobile deal to be more of hype than actual new purchasers of the latest IPhones.

     

    The market is brutal unfortunately to companies as Apple ... but then that brings opportunities to traders!
    11 Mar 2014, 09:43 PM Reply Like
  • Bigisbetter
    , contributor
    Comments (820) | Send Message
     
    Maintain growth and expectations have been THE issue for Yrs. What have Bull done: Disguise misespectations.
    11 Mar 2014, 10:02 PM Reply Like
  • Nigel D'Souza
    , contributor
    Comments (233) | Send Message
     
    @David RG

     

    ASP actually increased Quarter over quarter for Q1 and gross margin was higher than expected. Hence the 4th largest corporate profit in US market history.

     

    Margins will be pressured going forward and top-line growth appears flat. However, AAPL is underpriced relative to flat growth as well. Current price is justified only if AAPL experiences negative revenue growth for 2014.
    12 Mar 2014, 11:18 AM Reply Like
  • dmarilley
    , contributor
    Comments (616) | Send Message
     
    OMG guys evaporating margins look more like a slam dunk every day. Like Roger McNamee said, take your I Pad on a cruise and try to use Apple TV to play your movies, and it wants the internet to validate ownership. Whoops no internet on the ship. So you have this useless poorly engineered item???? It is getting worse, too.
    11 Mar 2014, 09:25 PM Reply Like
  • ultraz2@aol.com
    , contributor
    Comments (625) | Send Message
     
    Apple needs Q3/Q4 2014 new products and upgrades AND certainly NO LATER than Monday September first 2014, the first day of Q1. Apple needs a full quarter of sales on their upgrades and for their new products sales. Non of this partial NUMBER OF DAYS crap they have done regarding some of the past Q1 quarter introductions of new products . 92 days are in the quarter and 92 days of sales data for new and upgraded products must be reflected in the Q1 quarterly report with respect to upgrades and new products. In the January 2015 financial report for Q1 2014 , 92 days of sales data of the upgraded products and new products must be reflected.
    11 Mar 2014, 10:02 PM Reply Like
  • ultraz2@aol.com
    , contributor
    Comments (625) | Send Message
     
    I guess I need to go back to bed and start the day all over again. I meant October.
    11 Mar 2014, 10:06 PM Reply Like
  • PJBrown
    , contributor
    Comments (5) | Send Message
     
    Here is something I pulled from the web. Date 2006 . "Apple's days are numbered"

     

    And the excerpt goes ....
    They are doing well, granted, but that growth has topped.
    For several years now, Apple has enjoyed a rebirth. iBooks, iMacs, iEverything. The cute candy-color and slick design started the campaign that turned things around.

     

    And then came the iPod. This little device really accelerated things for Apple. During Q4 2005, they sold more than 6.5 million iPods. That’s up 220% from Q4 2004. iPod sales are stronger now than they were last year, but the growth has leveled off, and has started to whimper with a sales decline to 8.1 million units Q2 2006 (that’s a 4.7 decline from last quarter)

     

    And we know what has transpired since. Even if AAPL had multiple transformative products in the pipeline, it makes no sense whatsoever to unleash them in a fashion that Wall Street and Tech Gods want. Consumers can handle only so much purchases from an economic standpoint. And AAPL knows exactly how to extract the most amount of profit before they move on to the next big thing.

     

    So watch ...

     

    And the pundits are a repeat of slobbering history
    11 Mar 2014, 10:20 PM Reply Like
  • ctownzoo
    , contributor
    Comments (55) | Send Message
     
    Facebook 2013 revenue: $7.8 billion

     

    The iTunes Store 2013 revenue: over $10 billion

     

    Does anyone on wall street realize apple has the iTunes Store? It happens to be growing quite well.

     

    They now have iOS in high end cars such as Ferrari, Volvo, and others.

     

    They added 55 new carriers last quarter worldwide for the iPhone including china mobile.

     

    iPhone 6 with a larger screen is about to be released

     

    New Apple TV with more content and gaming features introduced is coming out.

     

    Possible fitness monitoring, watch, TV, payment systems to be introduced soon?

     

    How is this stock not going up rapidly?

     

    Google has missed on 8/9 earnings reports, buys non revenue producing robots, is working on project loon - the free balloon internet, bought some thermostats, and it goes crazy.

     

    Doesn't innovation have to also require that google makes money off of these ideas at some point?
    12 Mar 2014, 02:10 AM Reply Like
  • Warren Buffet007
    , contributor
    Comments (978) | Send Message
     
    Compare the share price of BAC and Apple one year ago, you will notice the point what all big investors mean with Apple.

     

    That's one of the reasons why Warren Buffet not buy Apple!.
    12 Mar 2014, 03:38 AM Reply Like
  • samuel_liu
    , contributor
    Comments (2798) | Send Message
     
    " why Warren Buffet not buy Apple!."

     

    Because Buffet's friendship with the Gates!
    12 Mar 2014, 04:28 AM Reply Like
  • NWCats404
    , contributor
    Comments (279) | Send Message
     
    @WB007: It is no revelation that AAPL has underperformed the entire market in the past few year, not just BAC. However, Buffet also wouldn't invest/hasn't invested in FB, ZNGA, NFLX, or any number of tech companies that have greatly outperformed the market. I don't understand your point.

     

    @ctownzoo: Your comment reminded me about the $25 gift card sales promotion of AppleTVs a few weeks back. Have there been any updates to that story, or any enlightened speculation about the new AppleTV release? It seems like it would have to be soon, if they are trying to clear the shelves, right?
    12 Mar 2014, 11:43 AM Reply Like
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