Tag Archive: iphone

Should We Buy Apple’s Stocks?

Apple’s stock briefly broke the $100 barrier in previous trading session before falling back. Considering that its stock had reached more than $700 in 2012, this fact may not look too surprising. However, we should consider the fact that Apple implemented a “7 for 1” split this summer. The increase in price is fueled by a couple of products, the iWatch and iPhone 6 smartphone. The company hasn’t provided any confirmation about these devices and we can’t even be entirely sure that the company’s next flagship will be called iPhone 6.

Although less frequently mentioned, investors should also add the effect of iWatch into their calculation. However, some analysts say that the smatwatch won’t debut until 2015.

At the moment, experts advise investors to load up before Apple launches its new devices. It is believed that the stock could go until up to $120 sometime next year. Investors are clearly enthusiastic about this fact and Apple’s mojo is usually back on September each year, the most probable time of release for new iPhone model. By market cap, Apple is the largest company in the world and it still dominates the mobile market.

It’s clear that Apple’s investors will have a wonderful 2014 and probably a better than expected profit. Apple has shown itself as a fantastic opportunity again and again. Rumors say that there will be two iPhone 6 models released next month, a standard 4.7-inch model and a phablet-sized 5.5-inch model. The release of two premium models will potentially drive the company’s finances and ultimately its stock price at the latter months of the year. Here are things to consider before we purchase Apple’s stock:

  • Availability of higher tier model: The iPhone 6 with 5.5-inch display is likely a more expensive model than the smaller 4.7-inch version. The larger model will be more appropriate for multimedia consumption and playing games. It means, users would likely need to purchase variants with higher internal storage to store all the content and apps. iPhone units with higher internal storage are known for their higher margins and this contribute significantly to Apple’s profitability. It should also be noted that Apple finally has the ability to stand up against Android manufacturers that have released so many phablet models in the market. This fact should bode well for higher selling prices and increased unit shipments.
  •  iPhone 5S and iPhone 5C will be attractive low-cost models: With the release of two iPhone 6 models, Apple will designate the Apple iPhone 5S as a mid-range model. It will be available on-contract for $99 with a new 2-year contract agreement. The iPhone 5C will be a low-cost alternative of the other more powerful models and carriers may soon offer it for free also with 2 year contract. Regardless of its older design and smaller display, the Apple iPhone 5S is still attractive for consumers this holiday season with its Touch ID scanner and premium metal chassis.
  • Price reductions: Although Apple continues to sell high number of mobile devices, the company often drives sales growth through price cuts. In recent quarter, Apple made the iPhone 5S $20 cheaper at $561. This strategy may decelerate sales growth and this could be reflected by the slight reduction in stock price. For this reason, investors should be aware about when Apple will lower the price of both iPhone 6 models and this could take place on spring/summer 2015.

Throughout 2015, Apple will be able to consistently increase its iPhone, tablet and probably, smartwatch shipments. This will ensure near-consistent increase of stock price. It’s also interesting to know that Apple still offers a huge buyback program, so we should be rather enthusiastic for things that may lie ahead.

Do you currently invest in Apple Stocks? Do You plan to invest? Answer the poll below:

The release of iPhone 5 last month had already surpassed web traffic volume of Samsung Galaxy S III. This is primarily because in such a very short time Apple had sold millions of iPhone 5. Add to that the fact that iPhone 5 is equipped with 4G browsing speeds thus escalating data usage to greater heights. In a 7-day Chikita Insights analysis between October 3 and October 5, there were 56% Apple iPhone 5 impressions as compared to 44% Samsung Galaxy S III impressions. According to Chitika, the reason behind it is that iPhone users are more active internet users.

For the last 1 year, Apple posted a $40.13 billion net income and $148.81 billion revenue. It had posted a net profit margin of +26.97% and operating margin of +35.62%. There was also a 41.16% sales growth during the recent 5 years. Apple was +74.55% ahead of its 52-week low while trailing -10.44% behind its 52-week high price. However, its 1.2% share price volatility had remained stable.

With more than 5 million iPhone 5 units sold when Apple started selling in September, iPhone 5 is now regarded as the quickest selling cell phone of all time. But analysts projected the sales to be from 7 to 10 million units on its 1st weekend. This also caused the stock market price of Apple to dip by 10% which is translated to some $60 billion market capitalization. The culprit is iPhone 5’s anodized aluminum chassis which is reported to be easily scratched. However, the decline in number of units is reported to be due to Apple’s inability to keep up with the demand. Bloomberg said that the supply issue is caused by Foxconn’s quality control crackdown to minimize the scratches issue. Foxconn is Apple’s chassis maker and assembler in China.

When asked about the issue, Apple was reported to be saying that the scuffs and scratches are normal. Without publicly admitting iPhone 5’s flaw, it has however asked Foxconn to guarantee that all the units are shipped in perfect condition. Nevertheless, ensuring top-of-the-line quality control is just a temporary solution because the units may be shipped in perfect condition but may still be easily scratched because of daily use.

Foxconn is now instituting tighter quality control. Because of this, there’s a shortage in aluminum chassis for all production lines of Foxconn to produce output. According to Bloomberg, Foxconn had even stopped its operation in some factories but the company was quick to deny it. Eventually, Apple and Foxconn will be able to resolve the anodized aluminum chassis issue but analysts still predict that Apple won’t be able to deliver a lot of units from September up to December.

iPhone 5 is believed to pressure Apple’s competitors. Sterne Agee analyst Shaw Wu is quoted into saying that demands for Apple phone can easily go up to 45 million before the year is over. Mark Moskowitz, a JP Morgan analyst, assumed that iPhone 5 will be able to drive an upgrade cycle for the next 18 months.