Today, 7:44 AM
- In his "We Are Full of Bull" note this morning, Morgan Stanley's Adam Parker says the economy will accelerate in Q2 and Q3, bringing stocks along for the ride. If investors are gun-shy thanks to record levels for the averages, Parker suggests looking for names with decent long-term earnings forecasts trading at a discount to the market.
- The ten largest U.S. stocks trading at a discount, but with above-average expected growth rates: Apple (NASDAQ:AAPL), Citigroup (NYSE:C), Gilead (NASDAQ:GILD), Union Pacific (NYSE:UNP), Actavis (NYSE:ACT), Twenty-First Century Fox (NASDAQ:FOXA), Time Warner (NYSE:TWX), Ford (NYSE:F), BlackRock (NYSE:BLK).
- Conversely, one might want to avoid those stocks selling for substantial premiums. The ten largest stocks trading at a premium to the market while growing at a below-average rate: Exxon (NYSE:XOM), Procter & Gamble (NYSE:PG), Chevron (NYSE:CVX), Coca-Cola (NYSE:KO), Pepsico (NYSE:PEP), Schlumberger (NYSE:SLB), MMM, McDonald's (NYSE:MCD), UPS, Nike (NYSE:NKE).
- Source: Bloomberg
Yesterday, 5:35 PM
Thu, Apr. 23, 5:41 AM
- Apple's (NASDAQ:AAPL) iOS operating system contains a bug that lets attackers crash iPhones and iPads within range of a wireless hotspot, security company Skycure Ltd. says.
- Hackers have mainly targeted Android devices, but this bug shows that attackers occasionally get the opportunity to damage Apple customers as well.
Fri, Apr. 17, 11:34 AM
- Apple (AAPL -0.5%) is "in negotiations with Canada’s six biggest banks about a potential November launch" of Apple Pay, the WSJ reports. As in the U.S., both credit and debit cards would be supported.
- However, Canadian banks are said to be unhappy with Apple's fee proposals and "concerned about security vulnerabilities like the ones that U.S. banks experienced as they rolled out the service." Talks are ongoing.
- Canalys estimates the iPhone has a third of the Canadian smartphone market. Thus far, Apple Pay has only launched in the U.S.; in February, MarketWatch reported talks with state-owned Chinese credit/debit card operator UnionPay had stalled. Talks with U.K. banks (and bank concerns about data collection) were reported in December.
- With Apple reportedly getting $0.15 on every $100 of credit transactions (and half a cent on debit transactions), Apple Pay is seen less as a direct revenue growth driver than as a means of strengthening the iOS ecosystem and boosting customer loyalty. The company has made plenty of positive remarks about early usage, but hasn't broken out total transaction volumes.
- Separately, FBR's Daniel Ives has launched coverage with an Outperform rating and $185 target. He sees a growing services focus, rising Chinese and enterprise penetration, and new device categories (inc. wearables) acting as growth drivers, and argues Apple's software differentiation should help it achieve a $1T market cap in the face of mobile hardware commoditization.
- Ives: "Apple attracts its customers by leveraging the benefits of its closed software ecosystem ... Overall, while we estimate 24% and 6% [Y/Y] revenue growth for FY15 and FY16, respectively, we believe Apple can improve its strong market position and impressive gross margins over the coming years."
Thu, Apr. 16, 11:21 AM
- SunPower's (SPWR +1.9%) Sichuan Shengtian New Energy Chinese solar project JV is partnering with Apple (NASDAQ:AAPL) to build two solar plants with a combined 40MW of capacity in Sichuan Province.
- The projects are under construction, and are expected to be finished in Q4. SunPower notes it has already partnered with Apple on 6 California, Nevada, and North Carolina projects with a combined 90MW of capacity. In February, First Solar announced a deal to build an $850M solar farm for Apple and PG&E.
- SunPower's Q1 report is due on April 24.
Tue, Apr. 14, 5:05 PM
- Apple (NASDAQ:AAPL) has bought LinX Computational Imaging, an Israeli developer of multi-sensor mobile camera modules declared (by LinX) to deliver SLR-level image quality and superior low-light shots. The WSJ reports the purchase price is ~$20M.
- Aside from high image quality, LinX trumpets the ability of its array sensor modules to take multiple shots at the same time at different apertures. This, together with algorithms, enables depth sensing and 3D image capture, as well as effects such as background focus blur.
- The purchase comes as Samsung and other Android rivals step up their efforts to improve camera quality; the iPhone's camera has long been a selling point (both from a hardware and software standpoint). In 2013, Apple bought motion-sensing tech developer PrimeSense.
- A list of Apple acquisitions
Mon, Apr. 13, 6:29 PM
- Looking to grab a bigger chunk of a burgeoning healthcare analytics market by offering more industry-specific solutions, IBM is buying Phytel, a provider of cloud-based patient data aggregation/analysis software, and Explorys, provider of a massive clinical database (said to consist of 315B datapoints) and a slew of analytics apps that run on top of them. Terms are undisclosed.
- IBM declares Phytel will help it give healthcare providers "insights into patient health from data about patient behaviors and their engagement with care plans," and that Explorys will "accelerate the delivery of IBM Health Cloud and IBM Watson cognitive solutions to model and apply medical evidence and large scale analytics to data."
- Both companies are being added to a new Watson Health unit based out of Boston. The business aims to provide software/services that can surface insights from large volumes of anonymous personal health data. As part of the effort, Big Blue is launching Watson Health Cloud, a platform that allows this data to be "anonymized, shared and combined with a dynamic and constantly-growing aggregated view of clinical, research and social health data."
- IBM's partnership with Apple (NASDAQ:AAPL) has been expanded to cover Apple's HealthKit (health/fitness data) and ResearchKit (medical research) frameworks, via Watson and Health Cloud. The latter will provide a data storage/aggregation platform for iOS apps using HealthKit and ResearchKit. In addition, IBM will "build a suite of enterprise wellness apps using HealthKit."
- Also: 1) IBM is partnering with Medtronic (NYSE:MDT) to create diabetes management solutions that pair Medtronic's devices (and the data they produce) with IBM's analytics and cognitive computing tools. 2) IBM is partnering with Johnson & Johnson (NYSE:JNJ) to "create intelligent coaching systems centered on preoperative and postoperative patient care, including joint replacement and spinal surgery."
Fri, Apr. 10, 11:22 AM
- "We continue to believe comps in FY16 will be quite difficult, while early reviews on Apple Watch suggest it will fall far short of the 'insanely great' benchmark, at least in this first iteration," writes Raymond James' Tavis McCourt, downgrading Apple (AAPL +0.1%) to Market Perform.
- McCourt, who has a $124 target, is nonetheless upping his FY15/FY16 estimates. He notes "data points suggest iPhone demand remained strong y/y through March, especially in China, and is now starting to enter its normal seasonal slowdown in calendar 2Q."
- Regarding Apple Watch, McCourt states a March survey of iPhone users found only 5% intending to buy one, down from nearly 10% in December. "[W]e are concerned that relatively muted reviews so far could place added fear in investors’ minds about the company’s ability to launch successful new product categories." His call comes two days after SocGen downgraded to Hold.
- While McCourt downgrades, Canaccord's Mike Walkley has upped his target by $5 to $150, following positive survey data. "While our recent surveys indicated strong initial interest for the new Samsung Galaxy S6 smartphones could slow iPhone premium tier share gains during the June quarter, our March surveys indicated another strong quarter of market share gains for Apple." Cantor reported seeing strong March iPhone supplier sales on Tuesday.
- Walkley forecasts "the iPhone 6 upgrade cycle will result in the installed iPhone base reaching 500M during C2015," and sees 20M 2015 Watch sales (4% of the iPhone base).
- Meanwhile, following the start of Apple Watch pre-orders today, U.S. shipping times for most models have slipped to either "4-6 weeks" or "June." The official launch date for Watch sales is April 24.
- It isn't clear to what extent the shipping push-outs stem from strong demand vs. limited supplies. Cowen and others have previously reported of Watch supply constraints.
- Update: Piper's Gene Munster: "We believe that the current stable lead times suggests that supply was the main limiting factor in this morning’s sell out ... Given the quick sell-out, it seems less likely that Apple will be able to deliver 1 million units of stock on opening weekend, although we still believe there could be 1 million units of demand by April 24th sold via pre-order."
Thu, Apr. 9, 6:03 PM
- As Intel's (NASDAQ:INTC) March 12 warning led many to expect, PC sales were weak in Q1: IDC estimates shipments fell 6.7% Y/Y to 68.5M, a much sharper drop than Q4's 2.4% and Q3/Q2's 1.7%. Gartner estimates shipments fell 5.2% to 71.7M. With IDC also reporting of price pressure, revenue declines might be larger.
- IDC: [T]he Q1 market faced multiple headwinds – including inventory build-up of Windows Bing based notebooks, commercial slow down following the [Windows] XP refresh and constrained demand in many regions due to currency fluctuations and unfavorable economic indicators." Gartner thinks sales of "mobile PCs" (notebooks, convertibles, and Windows tablets) rose, while desktop sales fell sharply. "PC replacements will be driven by thin and light notebooks with tablet functionality."
- Both Gartner and IDC report U.S. PC shipments fell only ~1% Y/Y. On the other hand, IDC thinks Japan (another high-ASP market) saw shipments fall 44%; strong Q1 2014 spending prior to a tax hike made for tough comps.
- Market leaders Lenovo (OTCPK:LNVGY) and HP (NYSE:HPQ) continued taking share from firms with less scale: IDC estimates Lenovo's share rose to 19.6% from 17.6% a year ago (3.4% unit growth), and HP's to 19% from 17.1% (3.3% unit growth).
- #3 Dell's share rose to 13.5% from 13.4%; #4 Asus (OTC:ASUUY) was flat at 7.1%, and #5 Acer (OTC:ASIYF) rose to 7% from 6.3%. Everyone else collectively fell to 33.9% from 38.4%.
- Unlike in Q4 and Q3 (seasonally stronger quarters for the company), Apple (NASDAQ:AAPL) wasn't in the global top-5. IDC estimates the company's US. unit share rose to 10.9% from 10.6%, good for fourth place (revenue share is higher).
- Other PC industry names: MSFT, AMD, NVDA, MU, STX, WDC, HTCH
Wed, Apr. 8, 12:27 PM
- Initial Apple Watch (AAPL - unchanged) reviews are positive, but not glowing. "You'll Want One, but You Don't Need One," reads Bloomberg's headline. The Verge gives it 7/10 stars; CNET gives it 3.5/5. "Gonna Be Juuuuuuust Nice Enough To Get Embargoed on Apple Watch 2 Next Year," quips Wired's Brian Barrett.
- The Verge's Nilay Patel calls Apple Watch "the most capable smartwatch available today" after thoroughly going over a day of use. He likes the potential of its Taptic Engine, and enjoyed using Apple Pay. But he's also critical of its performance - "[T]he Apple Watch, as I reviewed it for the past week and a half, is kind of slow." - and thinks more options are needed to customize notifications and taptics.
- Yahoo's David Pogue (formerly with the NYT) likes the Passbook, Remote, and Workout apps (among others), and the ability to quickly reply to texts with pre-typed responses and animated emojis. He thinks navigation and battery life remain weaknesses. "Nobody needs a smartwatch ... [T]he Apple Watch is, above all, a satisfying indulgence."
- Bloomberg's Joshua Topolsky (formerly with The Verge) doesn't like the fact the clock isn't visible (to save battery life) when the Watch isn't engaged - "As a normal watch-wearer, the idea that I might look down at my wrist and not see the time was annoying." - and also thinks the Watch can be more distracting than an iPhone. He does call the hardware "beautiful in a surgical way," and admits "checking text messages and e-mails by quickly glancing at the watch saved me some time."
- The WSJ's Joanna Stern suggests most consumers should wait for the next model. "The body is bound to get thinner ... Soon, we won’t have to charge the battery every night, the software won’t ever get stuttery and those health sensors will get even more accurate."
- Techpinions' Ben Bajarin provides one of the more upbeat takes. "The Apple Watch became my primary notification panel/dashboard ... In many ways the Apple Watch untethered me from my iPhone the way the iPhone untethered me from my PC ... Ultimately what I am convinced of is the Apple Watch represents a completely new computer interaction model."
- Meanwhile, SocGen's Andy Perkins has downgraded Apple to Hold. He thinks a mix shift away from the iPhone 6/6+ and 128GB models will lead Apple's iPhone ASP to drop to $651 in calendar Q1 from Q4's $687, and is also concerned about forex and tough 2H15 comps.
Tue, Apr. 7, 4:08 PM
- With five days to spare before the season premiere of hit Game of Thrones, HBO Now (NYSE:TWX) has opened for business on Apple (NASDAQ:AAPL) devices and Cablevision (NYSE:CVC).
- The Verge notes that overall, it's what you'd expected: HBO without the pay-TV subscription. HBO has included language in its agreement to change the number of streams/devices that subscribers can use, a sure hedge against password sharing.
- A nice benefit: For library content (which includes 2,000 titles), HBO will tell you the exact date when licensed films will be leaving the service so you can plan
- Other than that, it looks quite similar to HBO Go, its existing "TV Everywhere" approach for authenticated pay-TV subscribers.
- In her detailed recounting of the path to developing HBO Now, Nicole LaPorte notes the service might one day include content not available on the standard network offering.
- Previously: Dish, Time Warner make new peace; and Sling TV gets HBO (Apr. 01 2015)
- Previously: HBO CEO: Direct streaming a play for millennials (Mar. 31 2015)
Tue, Apr. 7, 10:58 AM
- Preliminary sales for Brian White's Apple Barometer (measures the sales of Apple-dependent Taiwanese suppliers) are up 42%-44% M/M in March, better than 2014's 34% Apple Barometer growth and well above the 28% average seen over the last 10 years.
- The Cantor analyst/Apple uber-bull now sees Apple Barometer sales dropping 25%-27% Q/Q in seasonally weak Q1; that compares with 32% a year ago and 25% two years ago. By contrast, the midpoint of Apple's calendar Q1 (FQ2) sales guidance calls for a 28% Q/Q revenue drop, worse than last year's 21%.
- White reiterates a $180 target ahead of Apple's (AAPL -0.1%) April 27 FQ2 report. That's equal to nearly 16x his 2016 EPS estimate after backing out $24.07/share in net cash. Strong Apple supplier sales could also be a positive for Cirrus Logic (CRUS -0.1%), which has risen over 80% from its fall lows with the help of strong iPhone-related sales.
- Meanwhile, in an employee memo, Tim Cook states "more than one thousand [Apple Watch] apps were submitted in just four days last week when the App Store started accepting them, and the rate of submissions has only been climbing since then." Apple released its WatchKit SDK last November; 3rd-party Watch apps currently have to interact with complementary iPhone/iPad apps.
- Cook also states Apple employees - there were 72,800 as of last year - will get a 50% Watch discount. Pre-orders start on April 10, and shipments/in-store sales on April 24.
Wed, Apr. 1, 2:22 PM
- Nine months after launching coverage with a Buy rating, Citi's Jim Suva has added Apple (AAPL -0.2%) to his Focus List, while reiterating a $145 target.
- Among Suva's 5 reasons why he thinks Apple can continue rising: He expects consumer demand for higher-capacity iPhones (driven by increased app usage and higher-resolution photos) to provide a "permanent step up" for gross margins. Demand for 64GB/128GB iPhone 6/6+ models helped Apple's GM rise 200 bps Y/Y in FQ1 to 39.9%, and its iPhone ASP jump to $687 from FQ4's $603.
- RBC argued yesterday GMs could benefit from component discounts, as well as yield, mix, and pricing improvements. "Going forward, we think that gross margins should act as the main lever for positive surprises..."
- Also cited by Suva: 1) Faster consumer phone upgrades thanks to carrier promotions and upgrade plans. 2) Growing enterprise penetration as Apple steps up its efforts to court businesses. 3) The potential for Apple Pay/Passbook to strengthen the ecosystem through over a dozen potential uses (payments, identification, keyless entry, etc.). 4) An "attractive" valuation of 11x forward EPS exc. cash.
- He sees Apple Watch as a "bonus" potential catalyst, and is cautious about its near-term sales due to concerns about its battery life and lack of built-in GPS (it relies on an iPhone to provide location data). Like others, Suva expects fresh dividend/buyback hikes to eventually arrive.
- Earlier: Samsung gets rave reviews for Galaxy S6
Wed, Apr. 1, 1:24 AM
- "The iPhone 6 (NASDAQ:AAPL) Has Met Its Match," reads the headline for the WSJ's review of Samsung's (OTC:SSNLF) Galaxy S6.
- Reviewer/iPhone 6 owner Joanna Stern: "Like a child who just found out that Santa isn’t real, I have spent the past week questioning everything I know." She's a fan of the S6's glass/metal body with dual Gorilla Glass 4 (NYSE:GLW) panes, as well as its 2K OLED display, improved fingerprint sensor, rapid charging support, and 16MP OIS-capable camera. "The Galaxy S6 destroys HTC’s new One M9 and other flagship Android phones ... on photo quality."
- The Verge's Dieter Bohn gives the S6 8.8/10 stars. "Samsung finally copied the right thing: caring about design." Bohn declares the S6 to have "one of the finest screens I have ever seen on a phone," thanks to a 577 PPI pixel density and improved color awareness. He also calls the device (powered by an 8-core Exynos CPU) "probably the fastest Android phone I’ve ever used."
- BGR's Zach Epstein: "Samsung’s Galaxy S6 features a stunning design that manages to be sleek and elegant, yet modern ... Samsung has raised the bar when it comes to smartphone screens ... Samsung finally stopped obsessing about increasing its [camera] megapixel counts and instead focused on improving its optics, design and software performance ... I’ve never used a phone that charged from empty to full as quickly as this one."
- Samsung's software, though declared to be improved from the S5's (less bloatware, and what remains is often buried), still gets some criticism. Epstein reports seeing a lag with some UI features, and Stern is critical of Samsung's icons and keyboard. Also: Reviewers generally see little reason to pay an extra $100 for the curved S6 Edge, and some Android users might not like the S6's lack of a removable battery or microSD slot.
- Ahead of the reviews, there have been reports Samsung has upped S6 production due to strong early interest. The phone goes on sale on April 10.
- Other reviews: TechCrunch, CNET, Re/code, TechRadar
- Expected S6 suppliers: BRCM, INVN, OLED, SYNA, MXIM, IDTI
- A month ago: Samsung launches metal/glass S6 with Gorilla Glass 4, 2K display, new fingerprint sensor
Mon, Mar. 30, 10:23 AM
- "We believe ADI has secured multiple sockets across AAPL's iPhone/iPad lineup to enable the 3D/Force Touch feature," reports Barclays, upgrading Analog Devices (NASDAQ:ADI) to Overweight and hiking its target by $15 to $70. "[W]e believe AAPL needs and would be be willing to pay for ADI's high accuracy [analog/digital] converters."
- The WSJ reported 3 weeks ago Apple's next-gen iPhones will support haptic sensors that allow different software commands to be sent based on how hard a user presses on a screen. Apple has already integrated its haptics solution (christened Force Touch) within Apple Watch and a new 12" retina MacBook.
- Barclays forecasts the Apple wins will boost ADI's 2016 EPS by $0.80 or more. It thinks 1 converter chip will be needed for the iPhone and 3 for a 12" iPad, and estimates an ASP of $1.50-$2.00. "ADI is known to have the best converters in the industry and this level of performance is needed to compensate for high levels of screen noise."
- Long-term, the firm believes multi-chip iPad solutions could be replaced by a single chip, and that ADI could even "integrate the 2D touch function into a single super chip." It also believes the company is seeing strong industrial chip demand, forecasts a pickup in auto chip sales, and sees room for further revenue and cost synergies from the Hittite acquisition.
- Shares have blasted off to new highs on Barclays' report.
Fri, Mar. 27, 2:50 AM
- Apple (NASDAQ:AAPL) CEO Tim Cook plans to give away all his wealth after paying for the college education of his 10-year-old nephew, Fortune Magazine reports.
- "You want to be the pebble in the pond that creates the ripple for change," Cook stated.
- Fortune estimates Cook's net worth, based on his holdings of Apple stock, at about $120M. He also holds restricted stock worth $665M if it were to be fully vested.
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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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