Therese Poletti's Tech Tales5 things for Apple investors to consider
8/21/12 8/21/2012 (MarketWatch)
SAN FRANCISCO (MarketWatch) -- In the afterglow of
On Monday, Apple's shares surged $17.04, or about 2.63%, to close at a new record of $665.15. Its shares were boosted by continued chatter on Wall Street about the anticipated iPhone 5 launch next month, combined with news that its total valuation reached new heights. Read more about Apple's stock.
While investors look for other potential trading catalysts for Apple's (AAPL) stock, including how to trade ahead of the iPhone 5 launch, here are a few other issues worth considering, in addition to Apple's still relatively low price-to-earnings ratio:
1) The company's patent infringement case against Samsung is expected to go to a jury this week. A contrarian view noted on Monday by Steve Milunovich, a UBS analyst, is that a potential win by Apple would force its rivals to be more creative. "The likelihood of Apple being leapfrogged or a rival creating a new category is greater if they have to think outside the box," Milunovich wrote.
Apple's top designers and engineers are always trying to stay ahead of the curve with the next hot product. Most investors would view an Apple win in the suit against Samsung as a huge positive. Whether such a win could force rivals to do some serious innovation is an interesting question. Could they innovate is another question altogether.
2) Apple's efforts to simplify the TV appear to be moving more slowly than some have expected, especially after co-founder and late chief executive Steve Jobs told his biographer Walter Isaacson that he had finally "cracked" the TV. Last week, the Wall Street Journal reported that so far, Apple does not appear to have reached any deals with existing cable operators to get them to embrace a new set-top box and services it is reportedly working on.
3) The mythical secrecy ahead of Apple product announcements appears to be waning a bit. As Toni Sacconaghi of Bernstein Research noted on Monday, "We believe that the Apple blog-sphere has become increasingly effective and predictive, with major details of new products largely known before the announcement date," Sacconaghi wrote. He added that many details are known about the upcoming iPhone 5, "suggesting that the run-up into the launch date could attenuate earlier than is typical." He added, though, that fewer details are known about the anticipated iPad Mini.
4) The company's plans for a new iconic spaceship-like building and campus are moving forward. In general, Apple's new R&D campus, designed under the realm of Jobs, has generated much interest and debate over its design in the press.Read about the debate in column on Apple's proposed spaceship building.
But in Silicon Valley, where there are few high rises, a glitzy building, designed by a noted star-chitect, could be seen as almost akin to building an iconic corporate skyscraper. In the late 1990s, a research analyst created what he called the Skyscraper Index, and documented the building of several major skyscrapers as preceding economic crises. Fortune also noted that often the fall of great companies has in the past coincided with the building of an "imperial headquarters," such as Chrysler and the Chrysler Building in New York, and a few others. In Apple's favor, however, is the fact that its new building will be the site of an R&D campus, not a new corporate headquarters.
5) The possible development of a lower-cost smaller iPad may have been in reaction to the Amazon Inc. (AMZN) Kindle Fire and
As the one-year anniversary of Steve Jobs's death on Oct. 5 approaches, investors are soon going to be inundated with stories about how Apple has changed under current CEO Tim Cook.
There will be plenty of more fodder for investors to think about over the next few weeks, including the highly anticipated iPhone 5 launch.
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