Apple Recap: New iPhones, Catalyst Demand, Verizon’s Love
Apple (NASDAQ:AAPL) closed more than 2.6 percent up on Tuesday, reversing a four-day losing streak and recovering from having touched a 52-week low mark on Monday. The stock closed on $431.14. Here’s a cheat sheet to company news making the buzz on Tuesday:
New iPhones On Way
Apple will announce the successor to its iPhone 5 as well as a low-cost version of its smartphone in one go in June, according to KGI Securities analyst Ming-Chi Kuo. The two devices will be out in the market by July, he added. The supposed iPhone 5S will have a faster A7 processor, a Smart Flash technique for higher-quality photos, and a fingerprint security chip built with help from AuthenTec, which Apple acquired last year. The device may also have a larger battery than its predecessor, but will likely sport the same aluminum body. The cheaper iPhone, meanwhile, will be made out of fiberglass and plastic. Both new phones would also, most likely, come equipped to be compatible with China Mobile’s (NYSE:CHL) TDD networks, although those models may not be available until September due to testing and network design processes… (Read more)
Bernstein Research’s Toni Sacconaghi has a price target of $725 as well as an Outperform rating on Apple, but the analyst is not ruling out the stock dropping lower than its current $430 mark. Sacconaghi told CNBC in an interview on Tuesday that Apple’s movement — either up or down — will depend on the company’s next step in terms of dividends and product announcements. “In the short term, Apple is at an interesting inflation point,” he said. “Investors are clamoring for Apple to return more cash … If they do, the stock could move up by $40 or $50. If there’s no incremental cash return before the earnings report in April, or if it’s only modestly higher, I think you see the stock trading lower”… (Read more)
Subsidies to Stay
There has been a lot of buzz about wireless operators getting rid of mobile subsidies in the near future and how that may potentially hurt Apple, but if the Verizon (NYSE:VZ) chief financial officer is to be believed, the iPhone maker has nothing to worry about. Fran Shammo said at the Deutsche Bank Annual Media, Internet & Telecom conference that Apple’s free-on-contract iPhone 4 had produced a lot of volume for his company, and the operator had no plans to offer incentives to sales staff to push low-cost alternatives despite the Apple smartphone’s high subsidy costs… (Read more)
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