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iPad Mini: What We Know (AAPL, GOOG, AMZN) 10.9.2012

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For the first time in a while AAPL is not the first mover in this space. This could turn out to be an advantage, for being first does not always equal success. Players like AMZN, HPQ, BKS, GOOG, and RIMM have all pumped out smaller tablet devices.  While some are clearly more successful than others, AAPL will still need to differentiate the iPad mini with their iconic slick design and user-friendly operating system, for savvy consumers will maximize their hard earned buying power.

The market leading iPad 3 is 9.7 inches; some analysts and AAPL followers are expecting a 7.85 inch liquid crystal display (LCD).  These dimensions are slightly different than the prevailing 7-inch norm.  The heaviest competition is expected to come from the ANZN Kindle Fire and the GOOG Nexus 7; both of which have fresh models out on the market already. The new 7” Kindle Fire is priced at $159.00. At this price point AMZN is expected to just break even considering the cost breakdown, but everything after that, including items like books and movies, is what AMZN is really in the tablet business for. AAPL is expected to naturally price at the higher end of the market. Some reports have surfaced regarding Apple suppliers facing production delays. Staying on track for the unconfirmed rumored release date of Oct. 17th 2012 will be a challenge.

The ‘Apple edge’ really just dominates the competition. This includes the 680,000 apps, ecosystem, and massive following. It is hard to quantify Apple’s social clout, but as of late, anything they engineer turns to gold or at least a few billion in market capitalization. A lot is expected from the iPad mini, but it is hard to make judgments this early.

E-mail the author with any comments, questions, or inquiry mark@keeneonthemarket.com.

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Apple is Not Perfect: Maps App Disappoints 10.2.2012

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In actuality, only 0.55 percent of all iPhone 4 users complained to the company about the issue, and the number of phones returned to Apple was only 1.7 percent; 4.3 percentage points less than the number of iPhone 3GS models that were returned in the first month of that phone’s launch.

So in case you missed it, AAPL basically started to use their own data for the new map app in the iOS update, as opposed to GOOG data, and some 3D satellite images and directions were botched…and that’s it. Many strategic speculations can be pulled from this news, but basically it is an example of AAPL’s push for dominance in the app space they pioneered. Apple obviously wants to own the app tiles on your iPhone screen and the map function was ripe for the taking. The app market is a pretty organic, considering the low barriers to entry. Anyone who wants to make an app can readily develop one and have the marketplace decide if it is good. Should an entrepreneur be discontent, he or she is not held back by AAPL. If we have learned anything from Steve Jobs it is not to accept the status quo and keep pushing, for new frontiers await.

In order to remain unbiased, it is important to look at what the market said during this period. For us, it always boils down to the trade. AAPL longs hope this will blow over quickly before the media cycle really takes a hold on the story and puts a new ‘headline risk’ into the stock. Shares are off some 6% from the all time high, but with the rumored iPad mini coming out in a while, that high could soon be violated. Google longs could probably care less, for every day GOOG seems to push against a new high; and at last check GOOG was $3.00 away from said high.

In related news, AAPL analyst Shawn Wu at Sterne Agee said that iPhone yields are going to move positively with volume. The firm went on to reiterate the strong product cycle and a buy rating on AAPL shares with a $840 price objective despite map app concerns.

E-mail the author with any comments, questions, or any inquiry

mark@keeneonthemarket.com

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Morning Rage 9.26.2012

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Dow futures are down twenty-two, S&P futures down three and a quarter, and Nasdaq futures are down nine and a quarter. Crude, metal and grain futures are all down as well. Crude futures are down a buck-seventeen, gold is down five and a half and silver is down twenty-two cents.

Yesterday was a bearish day in most sectors with most major tech and financial stocks down for the day. Google (GOOG) started the day off well, moved up to a new high, but lost all of its gains for the day and ended slightly lower. Apple (AAPL) continues to lose ground from its strong couple of weeks in early September as negative news continues to come out against the iPhone. I guess five million units sold is negative news for the iPhone 5. Delays for new units may be a problem as the riots at Foxxcon, where the iPhone and iPad are made, are investigated further.

I saw a couple of inside buys in oil companies last night in my own research which is leading me to considering a bullish trade in oil or at least keeping an eye on the price to see if it jumps upward at all in the near future.

New home sales report comes out today at 10:00am EST. Analysts expect a positive growth of 10,000 newly constructed homes with a committed sale, a gain of about 2.5%.

Alex Kalish has a master’s in economics from Suffolk U.

Look for the associate option pick of the day competition on the blog.

Email me if you would like a free trial into the KOTM Trading Room: alexk@keeneonthemarket.com