Jim Cramer: I’m Ignoring the iPad Upgrade

On Tuesday, Apple (NASDAQ:AAPL) announced the launch of a new iPad with twice the memory of its current largest model. The new model of the fourth-generation iPad with 128 GB storage will be available starting February 5 at $799 for a Wi-Fi version and $929 for a cellular one. While the high price of the device is expected to help improve Apple’s gross margins — one of the sources of concern for the company’s investors after the last earnings release — the launch has not impressed everyone.

Investment specialist Jim Cramer said on CNBC that the new iPad was neither a very coveted product nor likely to provide Apple’s stock the momentum it needed right now. “I’m sure this is a good product, but I know I don’t need one,” he said. “I think it’s great they have a new product. GE (NYSE:GE) probably has some new products, too.”

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According to Cramer, Apple needed something more solid to spark its sagging share price. Even though the stock was up on the news on Tuesday, it has fallen more than 8 percent since earnings were announced last week. “This is an incremental positive in a stock that doesn’t need an incremental positive,” Cramer said. “The stock needs more. I’m looking for new dividends, new buybacks, and new breakout products — this is not it.”

However, Cramer is not entirely pessimistic about Apple’s future, insisting that the company’s share price was still cheap. “Apple is inexpensive, selling at 8.9 times earnings,” he said. “I can make an investment case for it, but that’s not what people want. They want something exciting. Saying the stock is inexpensive is one thing, trading through [multiples] like Intel (NASDAQ:INTC) and Microsoft (NASDAQ:MSFT) is wrong.”

The new iPad model has all the features of its other fourth-generation cousins, including a 9.7-inch Retina display, FaceTime HD camera, and an A6X processor.

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