3 Apple Rumors Making the Rounds, From Larger iPads to More Bonds

It’s been less than two months since Apple launched the new larger-screen iPhone models and less than three weeks since the company released the new Touch ID-equipped iPad models. Despite this, the latest rumors suggest that the Cupertino, California-based tech company is already busy making plans for its next round of product releases. Meanwhile, after posting higher-than-expected fiscal 2014 fourth-quarter earnings results and recently reaching a record high of more than $108 per share, there are rumors that the company might soon take another step that could drive its stock even higher. Here are the three major Apple rumors making the rounds this week.

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1. Larger-screen iPad model will arrive in third quarter of 2015

The source: According to unnamed “reliable sources” cited by Japanese tech blog Mac Otakara, a larger-screen iPad model is expected to be released by Apple sometime in the third quarter of 2015. The so-called “iPad Pro” is rumored to feature a 12.2-inch LCD display and include additional speakers and microphones on the top of the device that may allow it to support stereo sound. Mac Otakara’s sources also claimed that the 12.2-inch iPad would have a thickness that falls between the iPhone 6 and the iPhone 6 Plus. The iPhone 6 is 6.9 millimeters thick, while the iPhone 6 Plus is 7.1 millimeters thick. Per Mac Otakara’s sources, the dimensions of this larger-screen iPad are similar to Microsoft’s Surface Pro 3.

The background: Rumors of a larger iPad Pro have been around since at least last year, when the Taiwan-based DigiTimes reported that Apple was working on a larger tablet aimed at North America’s education market. However, most of the previous rumors suggested that the device would feature a 12.9-inch display, rather than the 12.2-inch size reported by Mac Otakara. In August, Bloomberg cited its own sources that claimed production on the device would begin in the first quarter of 2015. While Mac Otakara’s sources didn’t specify a production start date, the third-quarter launch window suggests that production won’t start until the second quarter.

While it’s unknown how Apple plans to market this device, previous rumors have suggested it could be aimed at the education market. It is also possible that a large-screen iPad could be related to Apple’s recently announced partnership with IBM that is meant to improve the company’s mobile devices for enterprise use. The larger iPad’s 12.2-inch display might also make it the ideal mobile device for Apple to introduce a new iOS iteration that allows for split-screen multitasking. Apple’s largest flagship iPad model currently features a 9.7-inch screen.

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2. Apple Watch launching in the spring

The source: One of the biggest questions surrounding the Apple Watch is its exact release date. While Apple unveiled various models of the device and briefly highlighted some of its functions at its September media event, the company declined to offer a specific release date beyond “early 2015.” However, according to sources cited by 9to5Mac, Apple SVP of Retail and Online Stores Angela Ahrendts offered a slightly more specific timeframe in a recent video message to retail employees.

“We’re going into the holidays, we’ll go into Chinese New Year, and then we’ve got a new watch launch coming in the spring,” Ahrendts told Apple Store employees, according to 9to5Mac. The Chinese New Year falls on February 19 next year, while spring traditionally runs from March 20 to June 20.

The background: While this Apple Watch release date is not much more specific than the “early 2015” timeframe previously offered by Apple, it does appear to end hopes for a Valentine’s Day release that was hinted at in an earlier report from The Information. It also allows for the possibility that the Apple Watch could be released as late as June, although that would push the definition of “early 2015” to the limit.

Besides offering a slightly more specific release date, 9to5Mac’s sources also reported that Apple has plans to train retail employees to help shoppers try on various Apple Watch sizes and bands in order to “deepen relationships with customers” and make sure that they get a model and style of Apple Watch that they are happy with.

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3. Apple planning another bond deal

The source: According to “a person familiar with the matter” cited by The Wall Street Journal, Apple is planning to issue yet another bond offering this week. “Deutsche Bank and Goldman Sachs Inc. are arranging a call for the firm with investors Monday, and a deal, possibly at least partly in euros, could come as soon as this week,” according to the publication’s source. These are the same underwriting partners that Apple used for its last two major bond deals. However, this would mark the first time that Apple has issued debt in a foreign currency.

The background: Assuming this rumor is true, another bond offering could drive Apple’s share price even higher, since the money that it earns from its bond deals are typically used to fund share buybacks. Although the size of this rumored bond offering is unknown, the $17 billion bond offering that Apple made last year was the world’s largest corporate debt sale at the time. The iPhone maker made another major debt sale this year when it issued $12 billion in bonds in April.

Apple reported having $155.2 billion in cash and marketable securities at the end of last quarter, according to a transcript of the company’s last earnings call provided by Seeking Alpha. However, since this sizable cash hoard is primarily held overseas, Apple prefers to issue debt to fund its capital return plan, rather than incurring significant tax penalties by moving its cash back into the United States.

Follow Nathanael on Twitter @ArnoldEtan_WSCS

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