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Apple: Building Value By Hitting Singles

 June 15, 2012 04:35 PM
 

by Geoffrey Seiler, editor BullMarket.com

At its annual Worldwide Developer's Conference, Apple (AAPL) didn't deliver the "grand slam" of the new interactive TV some traders were hoping for.

But it did serve up a lot of singles and extra-base hits -- unveiling a number of new software and hardware upgrades -- that we think are going to help it build business long term.

Investors should not forget that while the iPhone and iPad have been the big growth drivers, the Mac line is still an important and growing part of the business with plenty of opportunity to grab market share.

The newest version of the MacBook Air, its lightest notebook, includes a faster processor from Intel, the Ivy Bridge chip.

The top-line MacBook Pro adds the company's Retina display, which the company said has the highest-resolution display of any notebook on the market, and incorporates the GeForce GT650M graphic processor, The new mobile operating system will include Apple's own map service with turn-by-turn voice directions. The app includes a traffic service that shows the location of accidents using crowd-sourcing technology to help drivers steer around the problem areas.

The new map application was built by Apple from the ground up and includes a "flyover" feature and 3D maps.

The new iOS will be more closely integrated with Facebook and other social networking services, enabling them to work on the iPhone and iPad over cellular connections instead of just WiFi as is now the case.

In addition, iPhone and iPad users also will be able to post pictures and video directly to their Facebook accounts from iOS 6 without using the Facebook app, which is generally pretty clunky.

The increasingly tight integration of its products, which Apple can do easily with its closed operating systems, can help drive growth.

In the mobile area, give hungry developers a couple hundred new tools to play with and there are few limits to the new applications they can come up with.

With the Retina display incorporated across the high-end lines of Apple products, we think new interactive games and video applications won't be far behind. It also points to the potential for some type of new Apple TV device that incorporates that same high-resolution display.

We also agree that the tighter integration of social applications like Facebook, which its users like even if investors can't figure out how Facebook its going to make more money from them, is a good strategy that could help drive future device sales.

There is nothing to stop Google from similar moves with its Android platform or likewise Microsoft, given its stake in Facebook, but once-again Apple has the head start.

In short, we think it was successful conference opening from an investment standpoint and it does nothing to change our still positive long-term view of Apple. We rate the stock a "Buy."


Rich
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