Earlier today billionaire hedge fund icon Carl Icahn released the open letter to Tim Cook that he promised was coming. It's pretty long and the bulk of the content reads like a miniature version of a Wall Street analyst report justifying a "buy" recommendation on the stock.
Yesterday Apple revealed it's new payment solution, Apple Pay, as part of the big iPhone 6 launch in California. The rumours that had been circulating about what we previously called 'iWallet' were largely correct. And, of course, there is more to the story. But before I dive into my thoughts, Apple watchers who follow the stock might want to browse through this post at Fortune. It's a nice summary of what analysts are saying about Apple Pay.
AAPL has confirmed the next iPhone event will be held on September 9. In eleven days we expect to see a 4.7-inch iPhone 6 and some kind of wearable device. There are rumors of a larger, 5.5-inch iPhone as well, along with rumors that it might cost more than the smaller sizes that came before it. Will anybody want a 5.5-inch iPhone? Can Apple justify a higher price for one? What does it mean to the company's potential profits?
This week AAPL stock price crossed $100, which is equivalent to over $700 prior to the 7:1 stock split that happened earlier this year. This represents a record high. That makes Apple's market value $600 billion. (A company's market value is determined by multiplying the share price by the number of shares in existence.) I've been an Apple shareholder ever since the original iPhone launched. At the time I was working as a sell-side analyst in Toronto covering tech stocks such as Research In Motion (now renamed to BlackBerry). Even though I was totally wrong about how badly Apple (and Android) would destroy BlackBerry, I had a friend of mine, who was living in San Francisco, buy me an iPhone and Fedex it to me in Canada. Even being an EDGE device (i.e. prior to 3G) I was convinced Apple had a game changer on its hands. So I bought the stock for a split-adjusted $19. Yeah. It's been a nice ride.
Late last week news broke that an Apple shareholder, R. Andre Klein, had filed suit against several senior officers of Apple. We've embedded the filing below so you can have a read through it should you wish. Because this is a fairly complex filing I've taken the time to read through it. What I'll offer you here is a simple explanation of the filing along with my opinion in the matter.
Being the world's largest technology company has its perks, including a stream of almost limitless cash. But the law of large numbers also starts to kick in, and a company of Apple's size doesn't seem capable of doing super productive things with all this money.
Last night Apple published its financial results for Q3 fiscal 2014. iMore has already posted a very detailed set of notes from the quarterly conference call, so I'll just recap a few key numbers and then dive into what I think the quarter means to Apple longer term. As per usual, keep in mind I do own shares in the company and I have no plans to sell them anytime soon. My comments represent my thinking and you should not interpret any of this as investing advice.
During its Q3 2014 conference call, Apple CEO Tim Cook elaborated on the recently announced IBM partnership, and as expected it's all about the penetration. While Apple's iPad, for example, has been deployed by 93% of the Global 500, the penetration is only about 20%. That's great breadth, not so great depth. By contrast, Cook pointed out, laptops in general enjoy 60% penetration. If Apple + IBM could drive iPad much greater iPad penetration, the "walls would shake".