Fri, May 22, 12:23 PM
- Re/code, which was the first to report Apple (AAPL +0.8%) plans to launch a Web TV service, now reports Apple wants to include "widespread access" to local U.S. TV channels, a feature not provided by Dish and Sony's offerings.
- Apple's efforts are said to have "complicated its negotiations with the broadcast TV networks, because most broadcasters don’t own all their local stations." Some execs also state broadcasters will have to invest in streaming infrastructure to support local feeds.
- As a result, the service might not launch in early fall, the target date Apple has given programmers. However, TV execs think it will eventually launch, and that money (rather than technical issues) is the main hurdle. The WSJ reported earlier this week Apple hopes to unveil the service at WWDC next month ahead of a fall launch.
- Separately, research firm Slice estimates (based on an analysis of online sales receipts) U.S. Apple Watch orders have generally been below 30K/day (implies a quarterly run rate of ~2.7M) following big early sales. Altogether, Slice thinks Apple sold nearly 2.5M Watches in the U.S. from April 10 (the day pre-orders started) through May 18.
- KGI's Ming-Chi Kuo recently cut his 2015 Apple Watch shipment forecast to 15M (others have forecast 20M-30M), citing a lack of major changes to shipment times in spite of supply constraints. Kuo also estimated ~80% of Watch orders are for the larger 42mm models.
Thu, May 21, 2:37 PM
- 9to5 Mac (has a good track record with Apple product scoops) reports Apple (AAPL +1.1%) is prepping Wi-Fi and Wi-Fi/4G 12" iPad models (codenamed J98 and J99), and also plans to give its tablet line support for dual-app (split-screen) viewing and multi-user login.
- Dual-app viewing, a feature long supported by Samsung's Galaxy Note tablet/phone line, will reportedly be baked into iOS 9 and possibly shown off at WWDC (runs from June 8-12). The 12" iPads and multi-user login are expected to arrive later. The dual-app mode (useful for business multitasking) will reportedly include support for 1/2, 1/3, and 2/3 views, depending on the app.
- Bloomberg reported in March Apple had delayed production of a 12.9" iPad (expected to be aimed at businesses and creative pros) to "around September" due to panel supply issues. Past rumors have stated Apple is thinking of including a stylus accessory and USB 3.0 ports; Apple just filed a patent application for a stylus whose input adjusts based on factors such as pressure and grip.
- Apple is coming off an FQ2 in which iPad revenue fell 29% Y/Y to $5.4B, and units 23% to 12.6M. Tim Cook defended the business on Apple's earnings call, noting a large portion of iPad sales still go to first-time buyers.
Thu, May 21, 9:17 AM
- New additions to Goldman's hedge fund hotels - 50 stocks which most frequently appear among the largest ten holdings of hedge funds: AerCap (NYSE:AER), Assured Guaranty (NYSE:AGO), Baker Hughes (NYSE:BHI), Citizens Financial (NYSE:CFG), Colony Capital (NYSE:CLNY), Dresser-Rand (NYSE:DRC), Family Dollar (NYSE:FDO), Hospira (NYSE:HSP), Netflix (NASDAQ:NFLX), NXP Semi (NASDAQ:NXPI), Pharmacyclics (NASDAQ:PCYC), Visa (NYSE:V), and Walgreens (NASDAQ:WBA).
- Since 2001, the basket has outperformed the S&P 500 in 66% of quarters by an average of 73 basis points. YTD, however, it has underperformed by nine bps. Goldman notes the current basket overweights Consumer Discretionary (22%) and underweights Consumer Staples (2%).
- Looking at the full list, Actavis (NYSE:ACT) leads the way, with 77 funds naming the stock as a top 10 holding. Next up is Apple (NASDAQ:AAPL) with 69, then Facebook (NASDAQ:FB) at 42. For the entire list of 50, the average is 26 funds making a stock a top 10 holding.
- The rest in order: Valeant (NYSE:VRX), Microsoft (NASDAQ:MSFT), DirecTV (NASDAQ:DTV), Citigroup (NYSE:C), Time Warner (NYSE:TWC), Delta (NYSE:DAL), Cheneire (NYSEMKT:LNG), Yahoo (NASDAQ:YHOO), Liberty Global (NASDAQ:LBTYK), AIG, SunEdison (NYSE:SUNE), Air Products (NYSE:APD), Amazon (NASDAQ:AMZN), GM, BofA (NYSE:BAC), JPMorgan (NYSE:JPM), Macquarie Infrastructure (NYSE:MIC), American Airlines (NASDAQ:AAL), Charter Communications (NASDAQ:CHTR), Google (GOOG, GOOGL), Ally Financial (NYSE:ALLY), NorthStar Realty (NYSE:NRF), Priceline (NASDAQ:PCLN), eBay (NASDAQ:EBAY), MasterCard (NYSE:MA), Alibaba (NYSE:BABA), Micron (NASDAQ:MU), Williams (NYSE:WMB), Gilead (NASDAQ:GILD), Berkshire Hathaway (BRK.A, BRK.B), Dolar General (NYSE:DG), NorthStar Asset (NYSE:NSAM), Brookdale Senior (NYSE:BKD), DISH Network (NASDAQ:DISH).
- See also: Goldman updates list of hedge funds most-shorted stocks (May 21)
Wed, May 20, 12:29 PM
- Apple (NASDAQ:AAPL) will follow up on its use of OLED displays for the Apple Watch by launching iPhones and iPads sporting OLEDs in the 2016/2017 timeframe, argues The Motley Fool's Steve Symington in a column today.
- Symington notes Apple has reportedly contracted Foxconn and Innolux to build a $2.6B plant to make flexible OLEDs for both smartphones and wearables, and that a JV launched by Japan Display, Sony, and Panasonic (known as JOLED) has reportedly been contracted by Apple to produce OLEDs for next-gen iPads.
- Universal Display (OLED +2.2%) has made fresh highs, and is now up 89% YTD. Shares jumped two weeks ago after the company disclosed a $45M Q/Q increase in its deferred revenue balance within its Q1 report.
- Also: LG Display (LPL +0.9%) recently showed off a 55" OLED panel prototype that's only 0.97mm thick - far thinner than its existing 55" panel (4.3mm). The prototype weighs only 1.9kg, and can be stuck to a wall using a magnetic mat.
- LG, which struck a new licensing deal with Universal earlier this year, says it plans to ramp OLED production in Q3, and is respectively aiming for 2015 and 2016 unit shipments of 600K and 1.5M.
Tue, May 19, 9:46 AM
- Two months after unveiling a 12" retina MacBook with a haptic Force Touch trackpad and updating its 13" MacBook Pro to include Force Touch and better internals, Apple (NASDAQ:AAPL) has updated its 15" MacBook Pro to include Force Touch, a faster SSD and graphics, and improved battery life (up to 9 hours of browsing/video).
- A model with a 2.2GHz. quad-core Intel Core i7 CPU (3.4GHz. Turbo Boost), 16GB of RAM, a 256GB SSD, and Intel Iris Pro GPU goes for $1,999; a model with a 2.5GHz. CPU (3.7GHz. Turbo Boost), a 512GB SSD, and AMD's Radeon R9 M370X GPU goes for $2,499.
- Meanwhile, Apple has tweaked its entry-level 5K-resolution 27" iMac (launched last October), and cut its price by $500 to $1,999. The quad-core Intel CPU's speed has been cut to 3.3GHz. (3.7GHz. Turbo Boost) from 3.5GHz., the 1TB Fusion drive replaced with a standard 1TB hard drive, and the Radeon M290X GPU replaced with a Radeon M290. A high-end model sporting a 3.5GHz. CPU (3.9GHz. Turbo Boost), a 1TB Fusion drive, and a Radeon M290X GPU will go for $2,299.
- Apple's FQ2 (calendar Q1) Mac revenue rose 2% Y/Y to $5.6B; ASP was at $1,231. FQ3 sales could get a boost from the new hardware and the 12" retina MacBook (began shipping in April).
Tue, May 19, 12:32 AM
- After close to a decade of research, Apple (NASDAQ:AAPL) "quietly shelved plans" to launch a TV set more than a year ago, the WSJ reports.
- Apple reportedly planned to make a 4K (Ultra HD) set, and considered including sensor-equipped cameras for making video calls. But it ultimately decided the TV's features wouldn't be "compelling enough" to enter a highly competitive market. A small team working on a set was "disbanded with members sent off to work with different product areas."
- At the same time, the WSJ backs up past reports about Apple's plans to launch a Web TV service supported by a new Apple TV set-top. Sources state Apple hopes to unveil both the TV service and set-top in June (presumably at WWDC, runs from June 8-12) before starting programming in the fall. However, the TV service's unveiling could depend on progress with media companies.
- Carl Icahn might need to change his model. On Monday morning, the activist predicted (while giving his reasons for setting a $240 target) Apple would launch a TV set in FY16 and sell $37.5B worth of them in FY17.
- Steve Jobs told biographer Walter Isaacson he wanted to create "an integrated television set that is easy to use," and that he had "finally cracked" the problem of a building a quality UI. But he also reportedly told employees TVs were "a terrible business" due to their low margins and upgrade rates.
Mon, May 18, 11:52 AM
- Carl Icahn's latest Apple (AAPL +1.1%) target (disclosed in a new letter) is up $24 from a $216 target set in February, and $37 from a $203 target set in October.
- Whereas Icahn's $216 target was based on a multiple of 20x expected FY15 (ends Sep. '15) EPS of $9.70 + $22/share in net cash, his $240 target is based on 18x expected FY16 EPS of $12.00 (exc. net interest income) + $24.44/share in net cash. The FY16 estimate, well above a $9.64 consensus, assumes a 20% tax rate rather than Apple's reported 26.2% "effective" tax rate (recognizes taxes on offshore profits).
- Icahn, optimistic as ever: "Considering our forecast for 30% EPS growth in FY 2017 and our belief Apple will soon enter two new markets (Television and the Automobile) with a combined addressable market size of $2.2 trillion, we think a multiple of 18x is a very conservative premium ... we believe the company’s shares should trade at a premium multiple to the S&P 500, as opposed to the S&P 500 trading at a 60% premium to Apple."
- He sees iPhone sales growth falling to the single digits in FY16/17, but also expects iPad growth to resume and Apple Watch sales to hit $45B in FY17. Though Apple hasn't announced a TV set (nor has one been reported to be close), $37.5B worth of FY17 TV sales are forecast.
- Not surprisingly, Icahn once more calls for a larger buyback - Apple recently hiked its buyback authorization by $50B to $140B, and raised $8B to help pay for capital returns. "[D]espite more than 30% growth in R&D annually through FY 2017 to $13.5 billion ... and your updated capital return program, Apple’s net cash position (currently the largest of any company in history) will continue to build on the balance sheet."
- Earlier: Apple/Samsung damages partly reversed; Q1 hedge fund data arrives
Mon, May 18, 11:04 AM
- A federal appeals court (the CAFC) has upheld the patent infringement violations found by a San Jose jury in Apple's (AAPL +0.4%) 2012 infringement suit against Samsung (OTC:SSNLF). However, it has reversed the $382M in trade dress dilution damages awarded to Apple (part of the $930M awarded overall), which will now be reconsidered by the San Jose court.
- Apple and Samsung's bitter legal war has been gradually dying down: Last year, the companies agreed to drop all suits outside of the U.S. That occurred shortly after Apple was awarded $120M in a U.S. infringement suit (separate from the 2012 complaint), much less than the $2B it originally sought.
- Separately, Whale Wisdom's Daniel Collins reports (following a review of Q1 13F filings) the number of Apple shares held by firms with over $100M under management fell by 4% in Q1 to 3.38B. 1,064 firms cut their positions, and 862 added to theirs; 121 created new positions, and 69 closed out.
- David Einhorn's Greenlight Capital and Philippe Laffont's Coatue Management were among the major hedge funds to cut their Apple stakes. Leon Cooperman's Omega Advisors liquidated its stake, while Ray Dalio's Bridgewater Associates upped its position. Carl Icahn's position was unchanged at 52.8M shares.
- Overall, 2,193 13F filers owned $421B worth of Apple shares - both figures are market highs. 1,186 firms counted Apple as a top-10 holding.
Mon, May 18, 12:58 AM
- Coherent Navigation provided high-precision GPS services (known as iGPS) that pair standard GPS signals with those from Iridium's (NASDAQ:IRDM) low-earth orbit satellite constellation to offer superior accuracy, signal integrity, and jamming protection. Whereas standard GPS is typically accurate to within several meters, Iridium and Boeing have claimed iGPS can be accurate to within centimeters.
- Apple (NASDAQ:AAPL) has bought Coherent for an undisclosed sum. The purchase follows several 2013 acquisitions aimed at improving Apple Maps: Wi-Fi indoor positioning startup WiFiSlam, business/POI location database provider Locationary, commercial mapping services firm BroadMap, and public transit app developers HopStop, and Embark. More recently, Apple appears to have launched an effort to add street imagery similar to Google Maps' Street View.
- Tim Cook disclosed in March Apple had bought 26 companies in the prior 15 months. As a list of Apple's known acquisitions shows, many of the purchases still haven't been made public.
Thu, May 14, 1:44 PM
- "The UBS Evidence Lab iPhone Monitor initially pegs June quarter iPhone (NASDAQ:AAPL) demand at 51.1mn units, above the Street consensus estimate of about 45mn," says analyst Steve Milunovich (Buy rating). Noting the model tries to gauge consumer sell-through rather than channel sell-in (i.e. what Apple records), Milunovich now expects 48M FQ3 (calendar Q2) iPhone sales, up from a prior 43M, and has hiked his FQ3 EPS estimate by $0.13 to $1.93.
- Unsurprisingly (given recent numbers), Milunovich reports Chinese demand is particularly strong. "Our model considers historical shipment data from 20 different countries and regions for which Google search values are established to forecast near-term demand. The data through May 2 estimates 23% YoY growth in global search volume and indicates continued strength in China with more than a 100% estimated search volume increase ... The model tends to overweight Greater China ... but has been directionally correct."
- Separately, Fortune reports Apple has delayed the launch of its HomeKit home automation platform "from an anticipated May or June time-frame to something closer to late August or September." HomeKit was first unveiled last June at WWDC with a slew of launch partners.
- A source says the code base related to the process for signing into HomeKit and making devices Web-connected "blew up" and required too much memory for smaller devices. Apple (hasn't announced a HomeKit launch date) is reportedly "trying to shrink the code back down to size."
- Shares are rallying amid a 1.3% gain for the Nasdaq. They're ~$6 below a high of $134.54.
- Update: Apple says the first HomeKit devices will be launched by partners in June.
Wed, May 13, 11:50 AM
- Digitimes reports TSMC (TSM +0.2%) has landed orders from Apple (NASDAQ:AAPL) to produce SSD controller ICs for the company. The chips will reportedly be made using TSMC's older 28nm manufacturing process - Apple's A8 CPU is made using TSMC's 20nm process, and the A9 is expected to rely on a next-gen 16nm process (along with Samsung's 14nm process).
- In addition to the A8, TSMC manufactures Apple's Touch ID fingerprint sensors, and acts as a foundry for a variety of Apple chip suppliers (Qualcomm, Broadcom, Cirrus Logic, etc.). The company's SSD controller clients include market leader Marvell and Taiwan's Phison Electronics.
- Back in 2011, Apple bought Anobit, an Israeli maker of high-performance flash controllers, for a reported $390M.
Mon, May 11, 2:17 PM
- After growing 19.1% Y/Y in Q4 (and seeing stronger growth earlier in 2014), Chinese smartphone shipments fell 4.3% in Q1 to 98.8M units, per IDC. Higher penetration rates, carrier subsidy cuts, and an inventory buildup near the end of 2014 contributed to the drop.
- IDC: "China is oftentimes thought of as an emerging market but the reality is that the vast majority of phones sold in China today are smartphones ... convincing existing users as well as feature phone users to upgrade to new smartphones will now be the key to further growth in the China market."
- Analysts have already noted Chinese smartphone demand has softened. Demand is expected to improve in 2H15, as inventories are cleared and 4G phone sales continue growing. IDC expects "relatively flat" growth for the whole of 2015.
- With strong pent-up demand for larger iPhones providing a lift, IDC estimates Apple's (AAPL -0.9%) share rose to 14.7% (#1 overall) from 12.3% in Q4 and 8.7% a year ago, via 14.5M shipments (+62% Y/Y). Revenue share was likely well over 30%, given sub-$150 Android phones account for a large portion of local sales. Apple, for its part, has reported its Greater China revenue (iPhone or otherwise) rose 71% Y/Y in Q1 to $16.8B (29% of total revenue).
- Xiaomi continues growing rapidly: IDC estimates its share rose to 13.7% (#2) from 9.2% a year ago. Fellow local Android OEM Huawei saw its share rise to 11.4% (#3) from 7.8%. Samsung (OTC:SSNLF), however, saw its share fall to 9.7% from 19.9% ahead of the Galaxy S6 launch. Lenovo/Motorola's (OTCPK:LNVGY) share fell to 8.3% (#5) from 10.3%. Everyone else had 42.2% of the market.
Thu, May 7, 12:49 PM
- Three months after selling $6.5B worth of debt, Apple (AAPL +0.8%) has sold another $8B, while stating it plans to use the proceeds to help pay for dividends/buybacks.
- Interest rates were low, but (thanks to a bond market selloff) higher than the rates often obtained in prior deals: Whereas 30-year (2045) bonds sold in February were priced to yield 3.498% (125 bps above comparable Treasurys), 30-year bonds sold in the latest offering were priced to yield 4.397% (140 bps above comparable Treasurys). 2017, 2020, 2022, and 2025 notes have also been offered. (prospectus)
- The offering comes after Apple hiked its quarterly dividend by 11% to $0.52/share last week, and upped its buyback authorization by $50B to $140B. The company had $193.5B in cash/investments at the end of March, but over $171B was offshore. Debt totaled nearly $44B.
- SA author Rubicon Associates considers the debt attractive relative to offerings from blue-chip tech peers, and (based on an analysis of Apple's peer credit curve) views the 2022 and 2025 notes as the most attractive. "Bottom line: I find the new debt cheap to peers and existing Apple debt."
Wed, May 6, 2:57 AM
- U.S. antitrust officials are scrutinizing Apple's (NASDAQ:AAPL) efforts to line up deals with record labels as it prepares to debut a new version of the Beats Music streaming service this summer, Bloomberg reports.
- The FTC is now examining whether Apple is using its position as the largest seller of music downloads through its iTunes store to put rival music services at a disadvantage.
Sat, May 2, 3:42 PM
- iPhone/iPad combo chip supplier Broadcom (NASDAQ:BRCM) is providing a Wi-Fi/Bluetooth/NFC/FM radio combo chip for the Apple Watch (NASDAQ:AAPL), according to an ABI Research teardown of the Watch's S1 chip module. As expected, NXP supplies a complementary NFC controller.
- The teardown also uncovered a 6-axis STMicroelectronics (NYSE:STM) motion sensor (accelerometer/gyproscope). There has been some debate about whether InvenSense (NYSE:INVN) will be a motion sensor supplier for the Watch, as it is for the iPhone 6.
- Analog Devices (NASDAQ:ADI) supplies a touch controller IC. Barclays reported in March ADI had scored multiple design wins to enable Apple's Force Touch pressure-based response feature (supported by the Watch) on future iPhones/iPads.
- IDT (NASDAQ:IDTI) supplies a wireless charging IC. The design win comes after Samsung opted to use a Texas Instruments charging IC within the Galaxy S6; IDC supplies a chip for the S6's charging pad. Dialog Semi (OTC:DLGNF) provides a power management chip.
- SanDisk/Toshiba (NASDAQ:SNDK) supply an 8GB NAND flash chip, and Micron/Elpida (NASDAQ:MU) a 4Gb (512MB) SRAM chip. SRAM typically carries higher ASPs than DRAM for a given amount of capacity (it's also faster).
- In the near-term (and perhaps longer), Watch volumes will likely amount to a small fraction of iPhone volumes - whereas Apple sold 192.7M iPhones in 2014, IDC forecasts 15.9M 2015 Watch shipments, and more bullish estimates are still generally in the ~20M range. However, strong growth is expected over the next several years, and the first-gen Watch serves as a valuable reference win when competing for other smartwatch/wearable designs.
Wed, Apr. 29, 6:21 PM
- The WSJ reports AAC Technologies, one of the two suppliers of the Apple Watch's (NASDAQ:AAPL) taptic engine (enables its haptic feedback features) was making defective components, and thus slowed down the ramping of Watch production. No recall is planned, since Apple doesn't believe Watches with the defective part shipped to consumers.
- Apple has reportedly responded by moving nearly all of its taptic engine production to Japan's Nidec, which didn't encounter the same issue. However, the WSJ states "it may take time" for Nidec to up production, and that Apple told some Watch suppliers last week to "slow production until June."
- The report comes as shipping times for many Watch models remain lengthy; a survey from research firm Slice indicated only 22% of U.S. Watch orders were delivered during the first weekend (376K out of 1.7M).
- In its FQ2 10-Q, Apple discloses the European Commission "could require Ireland to recover from the Company past taxes covering a period of up to 10 years," and that such tax payments could be "material." The EC has long been probing the use of Irish legal structures by Apple and other U.S. multinationals to lower their local tax bills; the FT reported last year Apple could receive a fine of up to several billions of euros.
- IDC estimates Apple's 61.2M calendar Q1 iPhone sales were good for an 18.2% global smartphone unit share, up from 15.2% a year ago; revenue share is likely above 40%. Samsung (OTC:SSNLF) had an estimated 24.5% unit share (82.4M shipments), down from 30.7% a year ago. #3 Lenovo (OTCPK:LNVGY) fell to 5.6% from 6.6% after factoring the Motorola Mobility deal.
- Overall, IDC thinks smartphone shipments rose 16.7% Y/Y to 336.5M. The total mobile phone market was roughly flat at 458.9M units.
AAPL vs. ETF Alternatives
Apple Inc designs, manufactures, & markets mobile communication & media devices, personal computers, & portable digital music players, & sells a variety of related software, services, accessories, networking solutions, & third-party digital content.
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