updated 09:45 pm EDT, Thu August 4, 2011
Highlights from meeting with COO, CFO
RBC Capital technology analyst Mike Abramsky had a meeting yesterday with Apple's acting CEO and COO Tim Cook along with CFO Peter Oppenheimer, and while not directly quoting either executive, commented on his own "takeaways" from the meeting, confirming among other things that Apple is indeed planning a low-cost iPhone -- if it can be a "innovative, category-killer experience," reports Tiernan Ray at Barron's.
The revelation will come as no surprise to long-time Apple observers, as the company has always (at least since CEO Steve Jobs' return in 1996) placed the idea that a forthcoming product must be either a redefinition of an existing category (such as smartphones and tablets) or a best-of-breed (with personal computers) before it is released. Apple has repeatedly proven patient enough to allow others to come into and even lead a market before arriving with its own -- usually innovative and generally successful -- contribution.
Abramsky continues to detect the enthusiasm for the Chinese and Asia Pacific market that was evident with Cook and Oppenheimer during last month's quarterly financial analysis call. He believes the region is still "significantly untapped" and continues to represent a large growth opportunity for the company, even after a 600 percent year-over-year increase in revenues from the region.
The Royal Bank of Canada analyst also expressed his belief that the component market on which Apple relies was "a buyer's market" in the short-term, which could allow Apple to continue out-performing competitors on margins. Abramsky thinks that even with increased competition from Google's Android smartphones, that Apple can maintain a competitive edge through its superior "application eco-system" and integration of hardware and software.
Regarding the various patent disputes involving Apple and various big tech companies, Abramsky indicates that he thinks Apple will selectively move to settle some disputes rather than attempt to bar sales as it has with Samsung. Apple may be hoping to use settlement offers to negotiate more favorable agreements in countries that have weaker IP laws, such as the countries of the Asia-Pacific region.
Abramsky reiterated his Outperform rating of Apple stock, along with his $500 price target. The stock was approaching $400 earlier this week, but has fallen with the broader market as Wall Street has become jittery about the fragility of the U.S. economy. The stock closed today $377.37 per share, a drop of 3.9 percent. [via Barron's]