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If you're going to buy Apple (Nasdaq: AAPL) stock, buy it for the short term, and keep a wary eye out for the overall economic situation, warns a message from investment banking firm UBS.
That might be good advice, given the general high level of excitement about all things Apple.
The loudest rumors surrounding Apple now are that that the company plans to bring out a tablet computer and offer it on Verizon's cellular network, but there's plenty of other gossip to fill in the gaps.
Apple shares stood at US$162.83 when the market closed Tuesday, 86 cents below the July 31 closing price of $163.69. Still, Tuesday's price was almost double where the stock stood last December.
Tomorrow's Hot, Next Year Maybe Not
MacBook Pro line refreshes and iPhone 3GS sales in China and Europe should help boost Apple's figures for its September earnings report, UBS analyst Maynard Um said.
The rumor that Apple will use Verizon Wireless's wireless data network, possibly for a tablet computer that Cupertino is said to be working on, will also help boost Apple's short-term prices, Um said.
He has pegged Apple's target price at $170 a share, up from his previous mark of $160.
However, Um is maintaining a 12-month Neutral rating on Apple.
Will This Tablet Be a Magic Pill?
Rumors of an Apple tablet have been prolific lately, and many suggest the product will hit the streets next year.
The tablet will launch in early 2010 and sell about 2 million units in its first year, Piper Jaffray analyst Gene Munster has predicted. Supposing they retail at $600, that would give Apple $1.2 billion in revenue.
The tablet will run a version of the iPhone operating system and have access to the App Store, he predicted.
Another Wall Street analyst, Shaw Wu of Kaufman Bros., said Apple has bought screens ranging from four to 12 inches over the past two years, some in very large quantities. Based on this, he predicted Apple would launch several new devices, including a tablet, sometime next year.
Wu set $184 as the price target for Apple stock and recommended it as a Buy.
Positioning the Tablet
Tablet computers tend to be pricey, niche devices most often used in settings like warehouses and hospitals, and it's not clear, despite Munster's predictions, that the tablet will take off unless the craze for all things Apple continues.
If Apple does introduce a tablet, it should offer the device as a convertible notebook in order to tap the student market, Gartner (NYSE: IT) Distinguished Analyst Ken Dulaney told MacNewsWorld.
"Without compromising the utility of a notebook, it would give a buyer the flexibility of what they have enjoyed on the iPhone," he explained. "Apple's touch experience through its Cocoa Touch interface is just about the best out there, so extending it to a notebook would be a natural."
That approach would be better for Apple than offering a cheap netbook with low margins, or a mobile Internet device measuring 4 to 7 inches and lacking the ergonomic keyboard and display of a tablet, Dulaney said.
The challenge with a potential tablet will be to effectively implement an interface similar to the touchscreen used on the iPhone and iPod touch, Matthew Wilkins, principal analyst of compute platforms research at iSuppli, told MacNewsWorld.
The tablet will likely use 802.11g wireless connectivity, he said, and possibly implement 3G or 3.5G cellular data technology. "Looking for a clue to the iPhone would tell us to expect a 3G connection in addition to WiFi," Wilkins said.
In Other News
The excitement sparked by all things Apple just keeps growing. Apple re-introduced anti-glare displays on MacBook Pros this week, it's possibly working on a standalone social networking application; USAA Bank has let customers deposit checks using their iPhones; Apple has banned this app; Apple has unbanned that app.
One of the more interesting news items comes from Kroll Ontrack, which has launched a global data recovery portal for Apple customers. This will provide data recovery services worldwide, either through Apple service providers or through Ontrack, to customers in their own languages.
Here's why this is important: Kroll Ontrack provides various technology services to some of the world's largest enterprises, such services including data recovery, advanced search and computer forensics.
For the company to offer Apple-related services globally means Apple is becoming a serious presence in the enterprise. "Our expectation is for the Mac to grow exponentially in the enterprise sector," Ken Gibson, partnership channel manager at Kroll Ontrack, told MacNewsWorld. "It's nothing quantifiable, just our gut feel from years of experience."
Many enterprises use Macs for the audio and visual parts of their data, said Don Boys, senior data recovery engineer at Kroll Ontrack. "We deal with Mac servers, laptops, Xsan, that sort of thing," he told MacNewsWorld.
Xsan is a 64-bit cluster file system designed for small and large computing environments that demand high levels of data availability. It lets multiple Mac desktop and Xserve systems share RAID storage volumes over a high-speed Fibre Channel network. Each client can read and write data and files directly to the centralized file system.
Perhaps UBS' Um is being too conservative -- when companies like Kroll Ontrack bet on Apple, that's a good sign. On the other hand, perhaps being fiscally conservative is a good thing, and nobody can look far ahead enough to know what's going to happen in a year's time.
