The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.
Apple Stock Forecast:
Summary:
- Apple is gradually losing the K-12 education PC market due to Google’s Chromebooks.
- Chromebooks are now even more attractive because they can run Android apps/games.
- It is no surprise that Apple is also intent on letting x86 Intel Macs run iOS games and apps.
- Project Marzipan is Apple’s in-development solution to allow iPad/iPhone apps run on macOS X computers.
- Thanks to the Virtualization Technology of Intel’s x86 processors, Apple will likely deliver the promise of Project Marzipan.
Apple (AAPL) wants to make its Mac computers more attractive and useful. Its upcoming Project Marzipan solution will allow macOS computers to run iOS apps. Apple is merely trying to replicate Google’s (GOOG) successful implementation of running Android apps on Chrome OS computers. Apple is losing the K-12 education market to Chromebooks. I am confident that more college/high school IT administrators will consider buying macOS computers again if they can run iOS apps.
Mac OS X computers now only account for 3.5% of the K-12 mobile computing shipments. However, I suspect that Macs are still the preferred computers of college students. The lack of built-in keyboards of iPads makes them a hassle to use for long-form writing/typing. Giving Macs the ability to run any iOS application makes them more useful to students and business professionals.
Sad but true, the neglected state of the Mac App Store means there’s limited availability of education/business applications. By bringing iOS apps and games to macOS computers, Apple’s PC products can compete better against Chromebooks and Chrome OS desktop computers. There are now 2.1 million iOS apps/games available from iTunes. Some of them are likely useful for students, home users, and business users.
Apple sold 19.25 million Macs last year. By making future Macs compatible with iOS software, Apple could attract more buyers. My 3-year forecast is that Apple could hit the 25 million units sold milestone. The bigger screen sizes of the MacBook and iMac makes them suitable for hardcore mobile gamers. Continuous gaming on the iPhone/iPad also causes overheating which reduces their device lifetime.
Project Marzipan Is Coming Soon
Project Marzipan is supposedly going be implemented this year. This is realistic. Intel (INTC) processors have Virtualization Technology. All Macs now use Intel x86 processors. Current Mac computers are capable of running emulated iOS apps. The process is similar to how easy it was for third-party developers to create so many Android OS emulators for Windows and macOS computers.
It is actually possible to run iOS apps now on Mac even without Project Marzipan. Problem is you have to download and install Apple’s software development IDE, Xcode. All iOS developers use the powerful iOS simulator tool of Xcode to test their games/apps. However, downloading Xcode requires you to sign-up as a software developer.
My guess is that Apple will update macOS High Sierra to include an integrated iOS emulator that anyone can use. Since Apple itself is creating the emulator, I expect macOS computers to run iOS apps at near-native speed. Apple has expanded support for its own Metal API for the Mac. Playing advanced 3D iOS games on the Mac should not be a problem.
Why Apple Cannot Afford To Lose The Education PC Market
Winning back the education market is very important to Apple’s future. The students of today are going to be the workers, managers, and leaders of tomorrow. If Apple lets Google continue its dominance in the K-12 and college PC markets, students will be trained in Google’s productivity/collaboration software and Chrome OS ecosystem.
Going forward, Google-trained students means they will be the employees who will require Chrome OS and Android devices. The said future scenario is bad for Apple and its shareholders. Yes, Apple currently has tens of millions of loyal fans. However, Apple needs to retain a strong presence in the education market to keep its brand alive among young people.
The future of Apple will depend on how appealing/useful its products will be to the future citizens of the world.
Conclusion
The app ecosystem dictates the long-term success of computing platforms. The Mac App Store cannot match the software diversity and size of the iOS app store. Apple, therefore, is correct to implement emulation of iOS apps on the Mac. Project Marzipan can revive the flailing Mac App Store platforms with the massive ecosystem of 2.1 million iOS apps/games to the Mac platform.
A larger app ecosystem for the Mac makes it more useful. Consequently, its future sales could improve after Project Marzipan is finally implemented this year. Better sales performance from its Mac computers can help Apple offset further weaknesses in iPhone/iPad sales.
The Mac business accounts for 7.81% of Apple’s quarterly revenue. This figure could rise after Macs become iOS apps-friendly.
(Source: I Know First)
Past I Know First Forecast Success with AAPL
I Know First’s algorithm has made accurate predictions on AAPL in the past, such as my bullish article published on July 5th, 2017. In the article, it outlines Apple’s many won accolades. For some people, Apple has the best smartwatch, headphones, smartphone, tablet, computer, and app store. Tim Cook’s reign also saw Apple’s ascendance as the most valuable company in the world. Apple sells luxury-priced consumer electronic products and is making tons of money doing it. At the time, Apple dethroned Wal-mart (WMT) to become the second-biggest online retailer in America, according to eMarketer’s trailing 12 month period ending last March 2017. Apple did e-commerce sales of $16.8 billion in the U.S., beating Wal-mart’s $14.3 billion. Additionally, the article mentions Tim Cook should be commended for making Apple an exemplary model for e-commerce. Unlike Amazon which specializes in thin-margin products, Apple sells pricey products online.
Since then, AAPL shares have risen 18% in line with the I Know First algorithm’s forecast. See chart below.
[Source: MorningStar, April 10th, 2018]
I Know First has positive 3-month and 1-year algorithmic forecasts for AAPL. I am therefore endorsing Apple’s stock as a buy. Based on the high predictability scores (0.7 and 0.82), I Know First has a long history of accurate predictions for AAPL’s 3-month and 1-year market movement.
Furthermore, my buy rating for AAPL is in line with its bullish monthly technical indicators and moving averages.
I Know First Algorithm Heatmap Explanation
The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.
Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.
