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TheStreet Open House

4 Keys to Apple's Stock

Stocks in this article: AAPL

The moment the visionary of the century takes the stage to explain what Apple plans to do with the ginormous capacity at the North Carolina data center and unveil how the iCloud will change modern computing as we know it, it's safe to say Apple will become a leader of the cloud stock movement.

With the App Store and iCloud exclusive to Apple's ecosystem it will further widen the gap between Apple and its competition. Anyone still trying to make a living by selling desktops and laptops is in trouble. The tide has shifted. The growth story in tech is now focused on mobile hardware, mobile advertising, profitable apps, social networking, NFC banking, etc.

Whoever can develop the most popular cloud platform will be rewarded by investors. Apple stock is departing from the weekly "death march" it's been on since November because of the iCloud and the positive uncertainty surrounding the event.

3. Is it all about the software? On May 6, Morgan Stanley analyst Katy Huberty met with Apple executives and came away with the following announcement: "Apple views product cycles as software driven'. Apple executives went out of their way to take the emphasis off of new hardware and place expectations on the software release.

Initially this didn't make a lot of sense. When Apple originally changed its name from Apple Computer to Apple Inc. it was because it wanted to be viewed as a mobile hardware company that included the iPod, iPhone and eventually iPad. Hardware pricing power is where the money's at.

Why would Apple try and convince us that now it wants to be known as a software company? It's because Apple World has gotten too big. The company is unable to meet global demand for its products. It has already split up iPhone launch dates between a U.S. launch in July, an international launch in September, the Verizon and white iPhone launch in the spring, etc... Steve Jobs no longer wants consumers to be obsessed with launch dates.

There could be 20 different iPhone launch dates throughout the year but there is only one iOS launch. No matter which version of the iPhone you own, when the new iOS comes out, you will be able to update your software and essentially get a brand new iPhone whether you have the 3GS, the 4, or the 4S hardware. He wants investors to focus more on quarterly sales than launch sales.

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