Editor's Note: In this edition of "360 Degrees,"
commentators take a closer look at highflying Apple as well as its new iPhone that's reportedly in the making.
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The Apple Advantage
By Michael Comeau
This was originally published on RealMoney on Nov. 15 at 12:45 p.m. ET.
Could the long-awaited
phone finally be on its way?
It is being reported that Apple has placed orders for 12 million cell phones from contract electronics manufacturer
Hon Hai Precision
to be delivered in the first quarter of 2007.
Apple's biggest strength is that it is able to sell products with fewer features than competing models but for more money. It is very likely to do the same with a phone, which could potentially be hugely damaging to the phone makers like
Another Apple advantage would be the likelihood of mobile-phone carriers lining up to stock the phone, which would pull valuable shelf space away from competitors. Even more deadly would be the fact that the Apple display would likely be bright white, becoming the focus in any store.
The possibility of a phone is just another in a long list of reasons to like Apple. The company has a tiny market share within the huge PC market and is the only major operator in the business with a highly differentiated product.
In addition, I believe
is making some strategic errors with its Vista launch, particularly its decision to offer so many different versions of the operating system. Apple, on the other hand, can just say that the Mac can do everything you want without having to worry if you have the right version.
I would also watch for Apple to make a more serious entry into the living room. I predict that the
iMac's screen size, which currently maxes out at 24 inches, will eventually get to 37 inches or greater. In other words, it will be big enough to hang on the wall and fit in with a home theater system. Just add a wireless keyboard and mouse, and the television industry will shake in its boots.
In keeping with TSC's editorial policy, Michael Comeau doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships.
Answering the Phone Question at Apple
By Cody Willard
This was originally published on RealMoney on Nov. 15 at 3:06 p.m. ET.
Did somebody mention a bull market in an all-out steady-rally phase? It is what it is.
Meanwhile, how about this rampant speculation about a soon-to-be Apple iPhone? We all know that Apple should get into this business, and for years, I've been answering interviewers' questions and readers' emails about this possibility.
Yes, it's sure to happen, but probably not as quickly as most people want.
I do believe that, if Apple really is likely to roll out a phone, 2007 is the year it will happen. With the de facto standardization of the iPod already in place, the phone would be a hit with consumers.
Bear Stearns is projecting that a phone could add 70 cents a share in earnings and $6 billion in revenue for Apple next year. Of course, it would depend on the timing of the rollout to reach such numbers, but any Apple iPhone would surely crank out a new profit source for the Cupertino, Calif.-based company.
However, this is the same company that has misled investors about executive payouts and therefore earnings leverage of investors' shares for the past decade or so. I'm referring to the shameful
At any rate, as much as I'm disgusted by the lies, I've been long Apple since the dawn of the iPod and continue to hold it, partly because of the earnings leverage that the iPhone would entail.
At time of publication, Willard was net long Apple.
Apple: A Technical Look
By Alan Farley
This is an updated version of a snapshot included in The Daily Swing Trade on Nov. 10 at 6:30 p.m. ET. For more information about The Daily Swing Trade product, please click here.
Apple has been outperforming the broad tech sector in recent weeks and is currently trading at a 10-month high. But the stock is now headed straight into major resistance at the January top near $86.50. This price level should invite considerable profit-taking, as well as aggressive new short sales. This predicts that downward pressure will stall the uptrend for weeks, or even longer.
It's hard to recommend buying stocks with possible double-top patterns, and this one is no exception. Current shareholders should use this leg of the rally to take well-deserved profits. New longs are at substantial risk as this stock moves higher. It's strongly recommended that they guard profits with tight trailing stops or get options protection to dampen expected volatility.
At time of publication, Farley had no positions in any of the stocks mentioned.
Cramer's 'Mad Money' Recap: Apple Stays Fresh11/15/2006 7:56 PM ET
Microsoft just took an aim at Apple with its Zune music player, but Apple is still the leader of portable music, Jim Cramer told viewers of his "Mad Money" TV show Wednesday.
First of all, compared to Apple's iPod product, the Zune is too big and bulky, he said. And second, it comes in three colors, one of which is brown, a hue that is not likely to be popular among the younger set.
Reason No. 3 why Cramer believes the Zune is likely to fail is that its music store is not good compared to iTunes, which is easy to use.
In addition, although he likes Microsoft, Cramer said the company has been unable to reach the right demographic, which is the younger generation, whereas this demographic loves Apple.
He said he finds the Zune, which doesn't even have an original design, "pathetic." Moreover, the rankings for the product, which just
debuted Tuesday, are much lower than expected.
However, none of this is to say Cramer doesn't like Microsoft, because he does. He said he believes the company has done well and people should like it because of its new Vista operating system, not because of the Zune. However, it is no competition for the iPod, Cramer said. The iPod is just one reason among many to own Apple.
"Its laptops are very popular with the college generation," he said. "When you buy a Mac, you are buying a beautiful, easy-to-use machine."
Apple is "the most differentiated brand and only has a tiny bit of market share," Cramer continued, adding that he has never seen an empty Apple store.
Also, when Microsoft launches Vista, people might get frustrated with having to update their systems and turn to Apple.
In the end, "Apple is an iPod story," which is never-ending, he said. Plus, it has "a ton of financial flexibility," which could translate to buybacks and dividends in the future.
"It could go to $100 by the end of the year," Cramer said. "Apple is invincible thus far." Apple closed at $84.05 on Wednesday.
At time of publication, Cramer had no positions in the stocks mentioned.
Big-Cap Tech Must Remain in Charge
By Richard Suttmeier
This is an excerpt from a tech-focused column; the piece was originally published in its entirety on RealMoney on Nov. 14 at 2:58 p.m. ET.
Since midsummer, tech stocks have enjoyed a nice uphill run.
Both the Nasdaq 100 and the Philadelphia Stock Exchange Semiconductor index, or SOX, have provided necessary leadership in this bull market. But could the big-tech climb be coming to an end? Take a look at some of the group's largest components.
Among tech stocks with market capitalizations above $50 billion, gadget and consumer-related stocks remain strong, but most are overvalued and overbought. Some examples of this include Apple,
has rebounded, too, but it could just be rising in sympathy with the big-cap tide.
Apple is trying to recover fully from its decline, as it slipped from $86.40 in January to a low of $50.16 in July. Tuesday morning's high is the closest it has gotten to $85. That's just above my quarterly pivot at $84.29, where investors should consider taking some profits.
At time of publication, Suttmeier had no positions in any of the stocks mentioned.