Apple’s Getting an iPad Boost From Japan’s Biggest Carrier
If all the iPhone sales Apple (NASDAQ:AAPL) has managed through Japanese mobile carrier NTT DOCOMO (NYSE:DCM) weren’t enough, it now can look forward to a new waves of sales for its iPad Air and iPad Mini with Retina display. According to a press release from Apple, the Japanese carrier will soon be selling the two larger i-devices throughout Japan on June 10, and that may mean big things for Apple.
The iPhone maker has been on the up and up since late April, with shares going from just above $520 to over $620 — quite a significant rise. Contributing to this extraordinary rise was surely the better-than-expected earnings report for the 2014 fiscal second quarter. Analyst expectations for the quarter had been for $43.7 billion in revenue and earnings per share of $10.19. However, Apple turned around with $45.6 billion in revenue for the quarter and EPS of $11.62. These improved earnings likely bolstered investors stance in Apple and increased interest in the stock.
On top of the solid earnings, Apple has been seen working out some of its legal disputes while also approaching exciting acquisition and stock moves. Apple’s major patent disputes with Google were recently reported to have been resolved in settlements, which means a bit more security for Apple — plus the Cuptertino-based company has been on the winning end of the courts in its cases against Samsung. In terms of acquisition, Apple has been rumored to be in the process of acquiring Dr. Dre’s Beats Electronics, which could improve the company’s content. Then there’s also the matter of Apple’s seven-for-one stock split, scheduled for June 2, which may help pull in more lightweight investors.
All in all, things look like they’re going well for Apple. Things may keep on going up until the Beats acquisition goes through and the actual effect of that can be realized, or until the stock split takes place. Of course, the stock split is perfectly timed with Apple’s Worldwide Developer Conference as well as the launch of the iPads on DOCOMO’s network for pre-order.
The DOCOMO sales will definitely be a welcome boost for Apple, as the company is the biggest mobile carrier in Japan, with over 63 million mobile customers. Even though the launch is a bit late, considering the late fall premiere of the devices, it’s not likely to be too late for the sales to have a strong positive influence on Apple. According to TechCrunch, an NTT DOCOMO spokesman said, “We have been getting requests from out customers that they want to use iPad on DOCOMO’s network, so we are happy that we can now offer it to our customers.” It can be presumed that, with 63 million users and the popularity of the iPhone, requests for the iPad were substantial.
On top of having the boosted iPad sales to look forward to, there will likely be added Apple excitement after the WWDC. Plenty of Apple rumors have been flying around in the past year, such as an expected Apple TV or an iWatch, and the WWDC may be the chance for fans to get a better hint at what Apple has planned.
If your investing in Apple or are interested in it, you might want to check out our earlier article on analyst Katy Huberty’s advice for buying Apple stock. You can see it here.
A new research note issued by a prominent analyst on Friday suggested that this may be an opportune time to buy Apple shares, reports AppleInsider. According to Morgan Stanley analyst Katy Huberty, ownership of Apple shares as a percentage of total funds at the top 100 institutions is at a historically low level. Per the research note obtained by AppleInsider, Apple is currently the only large-cap company in which institutional ownership has fallen below the S&P 500 weighting of 3.2 percent.
According to Huberty, the institutional investors’ reduction in Apple shares was prompted by a move from “hyper growth” stocks into “value” stocks, such as Hewlett-Packard and Microsoft. While institutional ownership in Apple was waning, HP and Microsoft saw their share of institutions’ investment portfolios increase by 10 basis points from the December quarter to the March quarter.
Morgan Stanley’s data show that institutional investors are “significantly underweight” in Apple shares after reducing their stake in the Cupertino, California-based company from the December quarter through the March quarter. Interestingly, this means that most institutional investors reduced their stake in Apple ahead of the company’s nearly 16 percent climb following the iPhone maker’s strong late-April quarterly earnings report. Institutional investors may have been counting on a seasonal decline in Apple as consumers hold off on purchasing new devices in anticipation of product refreshes that typically arrive in the fall.
However, Huberty believes institutional investors will soon jump back into Apple stock ahead of the new product launches this fall that may include new product categories. The expected surge of reinvestment by large financial institutions and the likelihood of new products could drive up Apple stock even further. For this reason, Huberty is recommending that clients get into Apple ahead of a breakout. “We believe this sets up well for further share price upside heading into the iPhone 6 product cycle, iWatch launch, and potential new services,” wrote Huberty in the note seen by AppleInsider.
Huberty also believes that the upcoming iPhone 6 launch could be the biggest in Apple’s history. In a research note issued last month, Huberty cited supply chain sources that reported sales for the iPhone 6 were expected to be 20 percent higher than last year’s iPhone 5S launch, reports AppleInsider. Much of the excitement surrounding Apple’s next iPhone launch is centered on the anticipated increase in screen size. Multiple media outlets have reported that the iPhone 6 will be available in two larger screen sizes. Most sources peg the screen size of the smaller model at around 4.7 inches, while the larger-screen model is believed to feature a phablet-size screen of around 5.5 inches.
Although Apple has never confirmed the existence of an iWatch, several analysts have predicted that Apple will unveil the wrist-worn device this year, including KGI Securities analyst Ming-Chi Kuo in a “new product roadmap” obtained by 9to5Mac. Finally, the “potential new services” that Huberty mentioned in her research note are likely a reference to an expanded NFC-based mobile payments service that Apple is rumored to be unveiling alongside the iPhone 6.