The 15 Most Important Apple Stock Stories of the Week

Monday

Apple (NASDAQ:AAPL) started this week on the worst possible note, dropping below $500 during premarket trading on Monday after several news reports said the company had cut back on orders of iPhone 5 components because sales of the device had been below expectations this quarter. It improved a little as the day went on, but still suffered pretty badly by closing 3.57 percent down at $501.75, its lowest level since February 15, 2012.

Here is your Cheat Sheet to the day’s main stories for the company:

iPhone 5 Flop Show?

The Nikkei newswire as well as The Wall Street Journal said Apple had cut productions orders for LCD screens at Japan DisplaySharp, and LG Display (NYSE:LPL) by half from an initial total of 65 million for the January to March quarter. Orders for other iPhone components, including processors, had also been cut, the reports added, because sales of the iPhone 5, which was released in September, have reportedly not been as strong as Apple had anticipated apart from Samsung (SSNLF.PK), its single biggest rival, Apple has also faced strong competition from other Google (NASDAQ:GOOG) Android manufacturers… (Read more)

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Adding to the Gloom

BTIG analyst Walter Piecyk added to the gloom by writing in a research note that Apple may register its first earnings-per-share decline in a decade this quarter despite an expected growth in revenue because a compressed product cycle and squeezed profit margins had hurt the company. According to Piecyk, Apple’s attempts to shorten its product cycle had misfired and instead led to its infamous supply chain constraints and a drop in the stock price. He also cut gross-margin estimates for the last quarter and for the full year, as well as his full-year earnings per share estimate. Piecyk reiterated his Neutral rating on the iPhone maker’s stock… (Read more)

Bulls to the Rescue

But with the stock plunging, the company’s bulls got into damage-repair mode. JPMorgan’s Mark Moskowitz wrote in note to clients that the latest news reports were nothing more than noise and that the sell-off that followed was overdone. Moskowitz reiterated a previous estimate of Apple having sold 48 million iPhones in the last quarter and predicted sales of 45 million this quarter. The analyst added that the order cuts may actually be a result of improving supplies of the smartphone, which would imply that gross margins were on the rebound… (Read more)

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Tuesday

Apple (NASDAQ:AAPL) dipped below $500 on Tuesday, closing at $485.92 on what was another depressing day for the iPhone maker’s troubled stock. The share price lost more than three percent for the second straight day, dropping 3.15 percent after having fallen 3.6 percent on Monday. Apple, which has a 3.8 percent weight in the Standard & Poor’s 500 Index and a 10 percent weight in the Nasdaq Composite Index, also put a drag on both those indexes. Here’s a cheat sheet to the stories that moved the stock on the day:

more_findmyphone_image iphoneConfidence-Killing Cut

Concerns that Apple may not be selling enough iPhones this quarter were restated by Nomura Equity Research, which slashed its price target on the company’s stock from $660 to $530. Analyst Stuart Jeffrey, who also cut earnings and revenue predictions, wrote in a note to clients that the newer targets were to “reflect signs of weaker-than-expected iPhone 5” sales. According to Jeffrey, Apple was facing a problem in Asia and needed a product for the markets there that didn’t sell at a premium price. In addition, iPhone gross margins and average selling prices were unsustainably high, the analyst wrote… (Read more)

What Demand Worries?

Demand for the iPhone 5 remains robust, according to Sterne Agee analyst Shaw Wu, who said that reports of lower-than-expected sales of the device were not accurate. Reduced component orders instead possibly hinted at improved yields and supplier shifts. According to Wu, Apple was likely to report revenue as predicted and beat earnings per share forecasts in the December quarter and saw upside to margins. (Read more)

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New iPhones Come Calling

Two new iPhone models are set to be launched in the middle of this year, with Apple starting the process of the devices’ preliminary builds in March, according to Jefferies analyst Peter Misek. The analyst wrote in a note to investors that the two prototypes already being tested by Apple were an iPhone 5S and a low-cost version of the iPhone. The low-cost device would possibly decrease the company’s gross margins, but Misek does not expect it to hurt Apple’s earnings per share because of the increased sales. (Read more)

Wednesday

iphone latestApple’s (NASDAQ:AAPL) surprisingly solid gains on Wednesday helped the Nasdaq and the rest of the tech sector despite drags from Google (NASDAQ:GOOG) and Dell (NASDAQ:DELL). Apple bounced 4.2 percent up to close at $506.09, reversing losses from the last two days and heading back into the $500 zone after dropping under on Tuesday. Here is a cheat sheet to the top stories that moved the stock on the day:

People Want More iPhones

A ChangeWave Research survey in North America found that 1 in 2 smartphone shoppers planned on buying an iPhone in the next 90 days. This was down from the overwhelming 71 percent figure last quarter, but that standout result came when the excitement for the then-newly launched iPhone 5 was at it peak. “Historically speaking, it’s a solid showing for Apple,” the research firm said, and it equals the level of demand for the device from last summer. Also, 70 percent of iPhone users were happy with their phone. About 56 percent of Nokia (NYSE:NOK) users said they were satisfied, a little higher than the 55 percent figure for Samsung… (Read more)

A Check on Expectations

Pacific Crest analyst Andy Hargreaves cut Apple’s rating from Outperform to Sector Perform on Wednesday after saying the stock lacked the potential to go materially higher in the next 12 to 24 months. According to the analyst, the current demand environment had changed in a way that the high ends of the smartphone and tablet markets were becoming saturated. Hargreaves wrote that the demand for “incremental” hardware improvements was waning and Apple Apple-facetime_300needed to come up with a big upgrade instead… (Read more)

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FaceTime For All

After months of user complaints and warnings from advocacy groups, AT&T (NYSE:T) decided to allow subscribers of all data plans to use Apple’s FaceTime video chatting feature over a cellular connection. The feature will still require a compatible device using iOS 6, which includes iPhone 4S and upward and the third-generation iPad and ahead. Until now, the wireless provider only allowed users of its new data share plans to use the feature outside of Wi-Fi connections. However, its restrictive decision attracted censure from several advocacy groups, which even threatened the company with U.S. Federal Communications Commissions action… (Read more)

Thursday

iphone-4-pre-order-20100611Apple (NASDAQ:AAPL) closed 0.67 percent down at $502.68 on Thursday after a research report predicted long-term problems for the iPhone. Even a reiteration of a $1,111 price target from mega Apple bull Brian White was not enough to lift the stock out of the red. Here’s a cheat sheet to the main headlines on the day:

iPhone Trouble Ahead?

Apple’s share of the global smartphone market will grow to 22 percent this year, but will peak at that point and flatten through 2018, according to a projection from market researcher ABI Research. And rival Samsung (SSNLF.PK) will be there to fill in the growth holes, the report added. “Barring an unlikely collapse in Samsung’s business, even Apple will be chasing Samsung’s technology, software, and device leadership in 2013 through the foreseeable future,” ABI’s Michael Morgan said in a statement. Apple accounted for just under 15 percent of the global market in the third quarter of last year according to a recent report from IDC, up from 13.8 percent a year earlier… (Read more)

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Amazon Pulls a Fast One

Apple is already unhappy with and in litigation over Amazon’s (NASDAQ:AMZN) Appstore, and the online retailer appears to be pulling one over on Apple with its music store as well. Amazon’s Cloud Player, which sits in direct competition to iTunes, already poses a real threat to Apple’s music service with its competitive pricing. Now, Amazon is letting users access its MP3 store through their iOS device’s Safari browser and make the music purchases online, where Apple has no right to a share in revenue. The music is then streamed from the cloud on the iOS device without Apple ever seeing a cent of the purchases. (Read more)

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Shooting for the Stars

The negativity of the last few days around Apple’s stock may have turned many believers away, but Topeka Capital Markets’ Brian White has stuck to his ultra-positive outlook for the iPhone maker. In a new research report sent out to investors, White said he saw several positive indicators for the company in the near- and long-term future and reiterated his aggressive price target of $1,111. That prediction is more than double Apple’s current stock price. “Our top large-cap stock pick in the IT Hardware & Networking group for 2013 is Apple,” White wrote. (Read more)

Friday

Apple (NASDAQ:AAPL) dipped under $500 again on Friday, but managed to end the day at exactly that mark after registering a 0.53 percent fall. What were the stories affecting the share price on the day?

Turn of the iPad Trouble?

A few days after reports of iPhone component cuts comes news that Apple’s display supplier Sharp has “nearly halted” production of 9.7-inch panels used to manufacture the full-size iPad. However, this is possibly with the idea of focusing on smaller screens for the iPad mini. Production of 9.7-inch LCD displays had “fallen to a minimal level” at Sharp’s Kameyama plant in Japan, with the gradual slowdown starting at the end of last year. Reuters sources did not say how much of the Sharp slowdown was due to seasonal changes in demand or just consumers opting for the smaller iPad mini. Concerns that the smaller iPad will cannibalize sales of Apple’s full-size tablet have existed from before the former was launched last November. The smaller, cheaper iPad mini is said to bring in lower margins for Apple than its older version, thus putting a drag on profits. (Read more)

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Taking Potshots

Google (NASDAQ:GOOG) chief executive Larry Page was not in a benevolent mood while discussing rivals during a Wired magazine interview, taking swipes at both Apple and Facebook (NASDAQ:FB). Asked about late Apple cofounder Steve Jobs’ threat to start a “thermonuclear war” over the alleged copying of the iOS operating system by Google’s Android, Page asked in response: “How well is that working?”

Page also mocked Apple’s decision to remove Google’s Maps as a default app from iOS devices. “You may have the greatest maps in the world, but if nobody uses them, it doesn’t matter,” Page said. “We’ve been working on Maps for a long time, and it’s nice to see people realize that we’ve put a lot of effort and investment into it.” (Read more)

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Winning in China

Apple’s fickle investors may be overlooking the company’s tremendous potential for growth in emerging markets in their pessimistic assessments of its future. That came from analysts at Goldman Sachs, who added in a new research report that a survey of Apple product owners in China had proven that demand for the company was alive and well. From those surveyed, 90 percent were at least likely to stick with the company for their next tablet or smartphone purchase, while 72 percent of iPhone and iPad users were “highly likely” to again choose an Apple device. This indicated that “Apple still appears to have an enviable level of customer loyalty in China,” the report said. (Read more)