5 Things Apple Investors Must Watch in 2014
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Transcript of 5 Things Apple Investors Must Watch in 2014
5 Things Apple Investors Must Watch in 2014
1. Capital Return Program
When?• Apple initiated its capital
return program in March 2012, then more than doubled it in April 2013. Expect similar timing in 2014.
• “We will announce any changes to our current [capital return] program in the first part of the new calendar year.”
- Tim Cook, October 2013
1. Capital Return Program
How Much?• Carl Icahn has proposed
that Apple repurchase at least $50 billion during fiscal 2014.
• Apple recommends shareholders vote against this proposal.
• Shareholders can vote at the annual meeting on February 28.
1. Capital Return ProgramHow Much?• Apple notes that it
repurchased $23 billion of the current $60 billion authorization in fiscal 2013.
• Apple increased its quarterly dividend by 15% to $3.05 in 2013. Expect further dividend increases thanks to strong cash flow.
2. iPad Pro
When?• Rumors suggest that the
“iPad Pro” would launch in the second half of 2014, in line with Apple’s current product cycle.
• Last iPad unveiling was October 2013.
2. iPad Pro
Why?• A 12.9” iPad would better
address enterprise markets with greater productivity demands.
• Would likely fetch higher margins depending on pricing.
• Further expand iPad portfolio to include Mini, Air, and Pro models.
3. iPhone 6
When?• Rumors suggest that a
larger iPhone 6 could launch as early as May 2014.
• Unlikely timing, since Apple now launches iPhones in the fall.
3. iPhone 6
Why Go Big?• Phablets are a growing
trend that Samsung is enjoying, particularly in key markets like China.
• High-margin market segment worth pursuing.
• Some users prefer very large displays.
4. iPhone Growth in China and Japan
What’s New?• Apple has now inked
official partnerships with NTT DoCoMo and China Mobile.
• NTT DoCoMo is the largest carrier in Japan.
• China Mobile is the largest carrier in China, and the world.
4. iPhone Growth in China and Japan
How Many?• NTT DoCoMo currently
has 61.9 million subscribers. (Nov 2013)
• China Mobile currently has 763.3 million subscribers. (Nov 2013)
• That’s over 825 million subscribers combined, or 12% of the world’s population!
4. iPhone Growth in China and Japan
Keep in Mind• They can’t all afford
iPhones. Addressable market is much smaller.
• Different network technology landscapes.
• NTT DoCoMo’s subscribers are 71% 3G and 29% 4G.
• China Mobile’s subscribers are 76% 2G and 24% 3G.
5. iWatch?
Why Now?• Wearables is potentially
the next big computing trend.
• Apple has been focusing heavily on fitness, including with its new M7 co-processor.
5. iWatch?
Why Now?• Tim Cook is a well-known
fitness enthusiast, and is on the Nike board of directors.
• Smartwatch category is potentially poised for explosive unit growth.
5. iWatch?
Source: Canalys. Estimates as of July 2013.
5. iWatch?
Estimates vary widely. NextMarket predicts 15 million units in 2014. Source: NextMarket Insights. Estimates as of September 2013.
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