Apple May Take a Hit From Escalating Trade War

You want to be the pebble in the pond that creates the ripple for change”- Tim Cook

(Source: Wikipedia)

The Building Trade War

On Monday morning, President Trump ordered the United States Trade Representatives to find $200 billion worth of Chinese goods to tariff. China responded by putting a tariff on $50 billion worth of U.S. goods. Trump has since threatened to enact yet another tariff on the country. Such escalation is sparking fear of a “trade war”.

A trade war spells trouble for Apple, a company headquartered in California and who manufactures mostly in China. The United State’s biggest import from China is smartphones, totaling $70.4 billion in 2017. JP Morgan has stated that “A substantial portion of China’s exports are western products manufactured locally — [such as] Apple (AAPL) iPhones.” Almost 20% of Apple’s revenue comes from China, as the company shipped over 41 million phones there. Although Apple has received reassurance from President Trump that they would not be on the list of items subjected for the tariff, the tech company still may be affected.

(Source: Wall Street Journal)

Will Tariffs Take a Bite out of Apple?

Apple has been increasing its inventory by 3.3 billion in preparation for possible repercussions. The company has many rightful worries on when and how they may be affected. Tariffs may affect Apple’s suppliers, causing major delays or a rise in costs. Fear also spawns over the possibility of a repeat of 2016: Apple services being banned by China. In doing so, China could make a huge push for citizens to use Chinese smartphones over American ones. Also, if China were to tax iPhones, prices would rise and Apple would be driven out of the market.

How the Market Reacted

Apple’s stock has slumped since the announcement of the additional tariffs.

(Source: YCharts)

Apple Snags Media Giant Oprah Winfrey For Their Streaming Service

“The biggest adventure you can ever take is to live the life of your dreams.”- Oprah Winfrey

(Source: Flickr)

On June 15th, Apple formed a multi-year production partnership with Oprah Winfrey, the media tycoon. The two are joining forces to collaborate on content for Apple’s upcoming subscription based streaming service. It is currently unknown what Oprah will be producing, but Apple stated that, “Together, Winfrey and Apple will create original programs that embrace her incomparable ability to connect with audiences around the world.”

This partnership is a huge win for Apple because Oprah brings to the table her dedicated fan base. This phenomenon goes by the name of the “Oprah Effect”. The Oprah Effect is when any product associated or endorsed by Oprah Winfrey see a huge boost in sales. For instance, after Oprah Winfrey bought 10% of Weight Watcher stock, more than 600,000 members joined the program. Apple looks to carry over this trend to their new service with hopes that Oprah’s huge audience will start watching the new streaming service.

Oprah’s partnership is a drop in the bucket compared to Apple’s approximately one billion dollar investment into its streaming service. With decreasing iPhone sales, Apple hopes that this streaming service will be a home run for them. However, it is going to be competing against companies putting in more than triple the amount of investment into their streaming services, such as Netflix who just acquired former President Obama.

Following the announcement, Apple’s stock gained.

(Source: YCharts)

Apple Takes Action to Protect Users’ Privacy

“Privacy to us is a human right.”- Tim Cook, CEO of Apple

(Source: Flickr)

Apple’s core goal is to create excellent the best product possible while respecting the privacy of those who use their software. Privacy is a huge concern for Apple in a time in where it seems that our lives are public for all to see. Thus, Apple is taking a huge step forward to try and protect it’s valued customers from immoral data apps and law enforcement.

On June 12th, Apple updated its App Store policy to restrict all apps from harvesting the data of other apps and contacts that iPhone users have. This is direct attack on Facebook who collects data for marketing and acquisition opportunities through their VPN app, Onavo. This App Store update comes after Facebook was involved in the Cambridge Analytica scandal, where millions of users data was taken from Facebook unbeknownst to them.

(Source: Pixabay)

Last year, Apple took a lot of flack for not giving the FBI access to a terror suspect’s iPhone data. The news was so big that the President of the United States switched to an Android over Apple’s refusal. However, the FBI went to a third party and got the phone unlocked through them, a data breach that Apple found worrisome.

The company will now go forward with a brand new update which gives iOS devices that are prone to the hack a new software called “USB Restriction Mode”. This mode stops hackers by restricting data from being transferable after an iOS device has been locked for an hour.

Law enforcement are astonished by this update and ridicules Apple for it. They feel as if American citizen’s safety is in danger if they cannot access suspects personal data. To Apple, this isn’t just a law enforcement problem, but a problem for any criminal willing to bypass the iOS encryption. So, they are satisfied with this update as privacy is fundamental to them.

Apple’s stock price has decreased from June 12th to June 13th by .82% and volume increased by 26.83%. 

On June 13th, the S&P 500 was also down due to anticipation and the eventual exercise of the Fed hiking interest rates to 2% occurred

(Source: YCharts)

(Source YCharts)

 

As Always Apple Tops Expectations and Stays Different – WWDC 2018

“You want to be the pebble in the pond that creates the ripple for change”

– Timothy d. Cook, Chief Executive Officer of Apple Inc.

[Image Source: T3.com]

As a follow up to last week’s article, Apple’s Worldwide Developers Conference (WWDC) kicked off on June 4, 2018 and many of the highlights that were to expect took place in the event.

The yearly event was entirely software-based this year, despite early expectations to see more hardware-related announcements. The event included all of the latest updates to Apple’s platforms- iOS, macOS, watchOS, and tvOS, along with some improvements to Siri and bigger plans focused on strengthening privacy and security and reducing technology addiction. These enhancements to Apple’s platforms were designed to optimize the overall Apple user experience.

So… What’s NEW?

[Image Source: cultofmac.com]

Craig Federighi, Apple’s senior vice president of Software Engineering, explained over and over how iOS 12 is all about making things faster and more reliable for new and older devices like the iPhone 6 Plus, which would see apps open up to 40% faster and the camera would launch up to 70% quicker. This is the ‘No iPhone Left Behind’ update with every device capable of running iOS 11 being ready to run iOS 12 when it arrives. In addition, the iOS 12 will also include a new feature called Group FaceTime. The video chat service that right now only connects pairs of people will enable up to 32 to chat online together. The change is significant and useful for friends jumping online together, family member chatting and business meetings with distant coworkers.

This inclusivity did not include Apple Watch users who have the first-generation watches launched in April, 2015 and were still available for porches 20 months ago. The WatchOS 5 capabilities go from competitive Activity Rings to enhanced web page interaction.It is part of Apple’s goal towards a solid, reliable experience with minimal bugs and no battery-throttling or hidden activities scandals bubbling up. Apple was reasonably upfront that it couldn’t deliver the experience it wanted with the first Watch’s hardware.

With Emphasis on privacy was paramount, Apple discussed how it was building on the features from last year which prevented cross-site tracking, to make adverts follow you around less.

The new MacOS software goes further. It will be possible not to be tracked on sites where there are Like or Share buttons from social networks. Intelligent Tracking Prevention, helps block social media ‘Like’ or ‘Share’ buttons and comment widgets from tracking users without permission.

The new tvOS 12 aerial screensaver features on Apple TV 4K, includes aerials shot from space by NASA astronauts aboard the International Space Station.

Siri update includes making suggestions based on the things the user does regularly, like ordering a soy latte from Starbucks every morning or ordering sushi on Sundays.

 

[Image Source: zdnet.com]

Apple also announced a new Shortcuts app as part of iOS 12 that lets the users tie together multiple steps into a single Siri request. Another new feature called Shortcuts works with third-party apps. For example, the phrase “Siri, I lost my keys” can pull up the Tile app, showing you where you left them. Shortcuts also work on the HomePod and Apple Watch if that’s where you talk to Siri.

Apple’s latest software-based updates satisfy expectations and follow with an increase of 3.2% in AAPL stock in past 5 days. Stock price jumped from $189.98 to $193.51 per share since WWDC 2018 event.

[Image Source: Yahoo Finance]

Following the above, APPL stock grows every year with WWDC announcements. With Apple’s new and improved software, AAPL stock is expected to continue growing in the long-term estimation, as long as it remains updated and innovative.

What to Expect – Apple WWDC 2018

[Image Source: T3.com]

Apple’s Worldwide Developers Conference kicks off on June 4, 2018 at the McEnery Convention Center in San Jose, Calif. The primary focus of the event is contenting pros, and decision makers for technical sessions and brainstorming over the direction of Apple’s software universe in the coming year.

In contrast to last year, Apple is expected to introduce new software, with some hardware announced. In addition, Apple is also expected to update operating systems for Mac computers, the Apple Watch and Apple TV.

What to Expect?

As of last year, Apple used the event as a launch pad not just for OS updates- macOS High Sierra, Apple iOS 11, but also for major hardware moves – MacBook Air, new iMacs.

This year Apple is expected to update its mobile iOS and computing-centric macOS operating systems. The software update for existing iPhones and iPads is expected to be called iOS12 while the next version of macOS is still under wraps. Naturally, you can expect stability and performance improvements with the new operating systems.

Apple’s Siri is expected to get smarter as Apple’s offering has fallen woefully behind competitors like Amazon’s Alexa and Google’s Assistant in recent years.

WWDC is a developer’s event, but that hasn’t stopped Apple from introducing new hardware products in the past. For this year’s event the chances that Apple will introduce new products are slim, but if they do, users should expect updated MacBook, improved Airpods and maybe a new Apple Watch.

OLED is a new display technology, used to create thin, power efficient and bright display. In the 2017 iPhone X, Apple started adopting OLEDs and it is expected to introduce new OLED modules in its 2018 WWDC. As OLEDs provide a better image quality, and are also thinner, lighter, flexible and more efficient than LCDs, it is only a matter of time until Apple will switch to OLEDs with all its iPhones and mobile device.

Investors’ expectations for new and improved software and hardware follow with an increase of 1.59% in AAPL stock in 3 days. Stock price jumped from $187.11 to $190.15 per share.

[Image Source: Yahoo Finance]

Following the above, APPL stock grows every year with WWDC announcements. With Apple’s new and improved software hardware expected this year AAPL stock is expected to continue growing in the long-term estimation, as long as it remains updated and innovative.

Apple Stock Forecast: Why The Apple Mac Mini And iPad Mini Deserve Upgrades

Apple Stock Forecast

motek 1The 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

Summary:

  • Warren Buffet’s revelation that his Berkshire Hathaway bought 75 million more Apple shares in Q1 boosted the stock beyond my 12-month price target of $188.
  • I was correct to say that the $100 billion stock repurchase program was a strong incentive for long-term investors like Buffett to fall in love more with Apple.
  • I would like to discuss now the importance of updating the other products of Apple. Apple needs to take care of its loyal horde of Mac Mini and iPad Mini customers.
  • The availability of Intel’s Kaby Lake-G Core i7 and Core i5 with on-package AMD Radeon RX Vega M should compel Apple to produce an upgrade to the 2014-era Mac Mini.
  • The iPad Mini 4 is also almost three years old. It deserves a 2018/2019 version. The 8-inch form factor of the iPad Mini makes it a comfortable gaming device.

Apple (AAPL) has already delivered my previous 12-month price target of $188. It is justified to do some profit-taking now. The reason for AAPL’s quick rise to above $188 is due to Warren Buffett’s May 3 evening revelation that his Berkshire Hathaway team bought 75 million more Apple shares in Q1 2018. Buffett raising his bet on Apple obviously inspired institutional investors and hedge fund managers.

AAPL’s closing price rose from $176.21 in May 3 to $188 by May 11. AAPL even hit a new 52-week high of $190.37 on May 10.

(Source: Yahoo Finance)

I was correct to claim that the $100 billion stock repurchase plan of Apple was aphrodisiac to long-term value investors like Warren Buffett. Warren Buffett or his Berkshire Hathaway obviously suspected prior to the Q2 FY 2018 earnings report that Apple will allocate a massive portion of its cash from abroad for stock buybacks. Apple only announced its $100 billion share buyback program after it did its Q2 earnings report last May 1.

I do not have any real evidence but Berkshire Hathaway bought 75 million  AAPL shares in the first quarter of this year because it already got a hint from Apple’s management that it will allocate $100 million for share buybacks. Buffett has always been in love with the value presented by share buybacks.

Apple Has To Buy Back Loyalty of Disgruntled Mac Mini And iPad Users

I now would like to discuss the value in Apple upgrading its long-disregarded products. I am sure Mr. Buffett will agree that there are long-term benefits to fulfilling the needs of long-time Apple Mac Mini and iPad Mini customers. There’s long-term reward in buying back the loyalty and spending power of frustrated Mac Mini and iPad Mini users who bought other brands because Apple is very tardy in upgrading its small form Mac computer and iOS tablet. The last update to the Mac Mini was in 2014. The iPad Mini 4 was released in 2015. These two products obviously were discarded to the low priority list of Apple.

The Importance of the Mac Mini

The late Steve Jobs himself was the proud presenter of the first Mac Mini small form factor Mac computer in 2005. Jobs called it a very tiny but robust computer. My takeaway was the Mac Mini was Mr. Jobs’ effort to cater to people who can’t afford an iMac or Mac Pro.

It was also a clever way to persuade Windows loyalists to buy a Mac computer that can work with any third-party peripherals. Apple offered the first version of the Mac Mini for just $499. It was a successful marketing strategy in converting many Windows users to switch to the Mac system.

The bottom line is it was Apple’s Mac Mini design that inspired Intel (INTC) to create its Next Unit of Computing [NUC] reference design for tiny Windows/Linux computers. Unfortunately, the death of Steve Jobs made the Mac Mini a non-priority product under Tim Cook. This is the reason why the Mac Mini’s development is now far behind its Windows NUC counterparts.

I used to own an x86 Mac Mini 2006 version but it died from overheating due to its long years of service as a video & photo editing workstation. I still have a 27-inch iMac 2007 version that still works but it is currently in unused status along with my electric guitar. My point is Apple is slow in updating its Mac products compared to its Windows PC rival companies.

Frustrated Mac Mini customers found better small form factor computers from Windows-centric manufacturers. It was also easy for me to create a cheap hackintosh Mac OS X 10.7.5 using a $300 NUC from Gigabyte. Other graphic artists I know made Mac OS X Sierra hackintosh computers from sub-$500 NUC computers.

There are millions like me who will only buy a Mac Mini again if Apple makes a 2018 or 2019 upgrade to its 2014 Mac Mini. Apple can make an entry-level and high-margin Mac Mini models now that can appeal to 100 million PC gamers, CAD (Computer Aided Design) artists, video editors, content creators, game developers, and web designers/graphic designers.

Intel’s Kaby Lake G Core i7 and Core i5 has on-package Radeon RX Vega M GPUs (Graphics Processing Units). This Intel design can match the graphics performance of a GTX 1060 GPU from Nvidia (NVDA). Add 16GB of DDR4 RAM and a $1,199 Mac Mini can already be a decent graphics workstation machine or a gaming PC.

A Mac Mini that has Kaby Lake G Core i7 can match or even outperform Intel’s Hades Canyon design. The Hades Canyon tiny computer scored 363,499 under the Ice Storm Unlimited Graphics test of FutureMark 2013. The chart below also illustrates how a Kaby Lake G-equipped Mac Mini could also be a decent CAD workflow/graphics design workstation.

(Source: AnandTech)

Sad but true, there are millions more creative industry professionals who would have stayed on the Mac platform if only Apple did not forget the development of the Mac Mini computer.  The stiff global competition for graphic design, CAD layouts, and game developments projects made creative professionals and content creators be more cost-conscious. It is really hard to justify investing in $3K iMacs or $5 Mac Pro machines when contractual website development or UI/UX design jobs only offer 20 to 30% operating margins.

I sold a $3.5 Mac Pro before because it was too pricey a machine for doing $5 logos, $40 wedding video editing projects, and $30 wedding album Photoshop layout jobs. Apple’s Mac business doesn’t have to cater to mid-tier and high-end models only. The sub-$700 Mac Mini is an entry-level machine that can appeal to a lot of gamers and creative professionals.

The iPad Mini Is Apple’s Perfect Mobile Gaming Device

I will buy 750 more AAPL share if Apple also updates a new version of the iPad Mini 4. The 8-inch design of this tablet makes it the perfect mobile gaming machine. Apple needs to improve the cooling system of the iPad Mini and it can be the best mobile gaming device on the planet today. I also overheated an iPad Mini 4’s motherboard from excessive gaming (4 to 8 hours every day of continuous playtime). Mobile Legends, Arena of Valor, Injustice 2 were all my favorite overheating-inducing iOS games.

My point is that Apple can reduce costs of replacing under-warranty damaged iPhones. Excessive gaming is usually the culprit why less than 1 year old iPhones go kaput. The iPad Mini 4 was a great gaming device that will not overheat if you do not play it continuously for 6 hours.  Older gamers (35 years old and above) also have weaker eyesight that needs bigger-screen devices to play comfortably.

By keeping the iPad Mini updated with the latest CPU/GPU chips and advanced cooling systems, Apple has a durable/reliable device for serious mobile gamers.

A $249.99 iPad Mini 5 with A10X Fusion chip can be the best mobile gaming gadget. The top-grossing Fortnite and PUBG Mobile iOS Battle Royale games are obviously suited to larger devices like the 8-inch iPad Mini. The 4.7-inch display of an iPhone is just too small to see and shoot fast-running opponents.

Apple should also take into account that the tablet is an important platform that generates $13.9 billion in gaming revenue.

(Source: Newzoo)

Conclusion

Apple must never disregard the potential long-term contribution of the Mac Mini and iPad Mini. These entry-level products can actually enable their owners to earn more money so they afford to buy flagship products like the Mac Pro and iPad Pro.

Its bullish one-year market trend forecast score backs my buy rating for AAPL. I Know First has a high 0.7 predictability score on the one-year forecast tab for AAPL. It means I Know First’s stock-picking algorithm has an excellent history of correctly predicting the 12-month market performance of Apple’s stock.

 

Past I Know First Success With Apple

I Know First has been bullish on AAPL shares in past forecasts. On May 21, 2017, I know First Analyst wrote about AAPL. Since then, AAPL shares have gained 23.20%. See chart below.

This bullish forecast for AAPL was sent to I Know First subscribers on May 21, 2017

To subscribe today click here.

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.

Amazon Stock Predictions


Netflix stock predictions

Apple – Creating a healthier planet through innovation

“We’re committed to leaving the world better than we found it. After years of hard work, we’re proud to have reached this significant milestone,”

-said Tim Cook, Apple’s CEO.

Highlights

  • Nine More Apple suppliers commit to 100 percent clean energy production
  • Apple’s renewable energy projects
  • Appel’s New Robot, Daisy, Disassembles iPhone to Reclaim Precious Materials
  • 2018 Q1 results and Q2 outlook

[Image Source: Pixabay]

As part of its commitment to combat climate change and create a healthier environment, Apple announced on April 9, 2018 its global facilities are powered with 100 percent clean energy. This achievement includes retail stores, offices, data centers and co-located facilities in 43 countries – including the United States, the United Kingdom, China and India. The company also announced nine additional manufacturing partners have committed to power all of their Apple production with 100 percent clean energy, bringing the total number of supplier commitments to 23. In addition, over 85 suppliers have registered for Apple’s Clean Energy Portal, an online platform that Apple developed to help suppliers identify commercially viable renewable energy solutions in regions around the world.

Apple and its partners are building new renewable energy projects around the world, improving the energy options for local communities, states and even entire countries. Apple creates or develops, with utilities, new regional renewable energy projects that would not otherwise exist. These projects represent a diverse range of energy sources, including solar arrays and wind farms as well as emerging technologies like biogas fuel cells, micro-hydro generation systems and energy storage technologies.

A few of Apple’s renewable energy projects:

  • Apple Park, Apple’s new headquarters in Cupertino, is now the largest LEED ( Leadership in Energy and Environmental Design) Platinum-certified office building in North America. It is powered by 100 percent renewable energy from multiple sources, including a 17-megawatt onsite rooftop solar installation and four megawatts of biogas fuel cells, and controlled by a microgrid with battery storage. It also gives clean energy back to the public grid during periods of low occupancy.
  • In Prineville, Oregon, the company signed a 200-megawatt power purchase agreement for an Oregon wind farm, the Montague Wind Power Project, set to come online by the end of 2019.
  • In Japan, Apple is partnering with local solar company Daini Denryoku to install over 300 rooftop solar systems that will generate 18,000 megawatt-hours of clean energy every year, enough to power more than 3,000 Japanese homes.
  • Apple is currently constructing two new data centres in Denmark that will run on 100 percent renewable energy from day one.

Appel’s New Robot “Daisy

As part of its ongoing recycling effort, Apple announced on April 19, 2018 that it debuted Daisy, their newest robot that can more efficiently disassemble iPhone to recover valuable materials. Created through years of R&D, Daisy incorporates revolutionary technology based on Apple’s learnings from its first disassembly robot, Liam, launched in 2016. Daisy is made from some of Liam’s parts and is capable of disassembling nine versions of iPhone and sorting their high-quality components for recycling. Daisy can take apart up to 200 iPhone devices per hour, removing and sorting components, so that Apple can recover materials that traditional recyclers can’t and at a higher quality.

Apple “GiveBack”

Apple’s recycling program where people can trade in their device for a store credit. If the device is not eligible for credit Apple will recycle it for free. No matter the model or condition, Apple will turn it into something good for the customer and good for the planet.

Both Apple “GiveBack” and Daisy support Apple’s commitment to create a healthier planet through innovation and help the company move a step closer to its goal of making its products using only recycled or renewable materials.

[Image Source: Pixabay]

Apple announced on February 1, 2018 financial results for its fiscal 2018 first quarter. The Company posted quarterly revenue of $88.3 billion, a 13% increase from the year-ago quarter and an all-time record, and quarterly earnings per diluted share of $3.89, up 16%, also an all-time record.

International sales accounted for 65% of the quarter’s revenue.

“We’re thrilled to report the biggest quarter in Apple’s history…” said Tim Cook, Apple’s CEO.

Apple’s outlook for its fiscal 2018 second quarter:

  • revenue between $60 billion and $62 billion
  • gross margin between 38% and 38.5%
  • operating expenses between $7.6 billion and $7.7 billion
  • other income/(expense) of $300 million
  • tax rate of approximately 15%

Although Apple’s first quarter revenue for 2018 is based on the recent iPhone X release I believe that their revenue growth and stock growth will continue and increase in 2018 on the scent of Apple’s environment commitment. Following Apple’s environment progress report of the past year and the beginning of 2018 one can see that they invested many resources in R&D with the aim to create a healthier planet through innovation.

The report shows how perhaps the Energy Use and Emissions at Apple’s Colocation Facilities may have increased in the past years. Percent Renewable Energy started at 0% in 2011 and got to 99% in 2017. The growth between the years of 2014 to 2017 was 18% (from 81% to 99%) and I assume that by the end of 2018 Apple will reach 100%. By achieving 100% of Renewable Energy Apple will inflame an environment revolution.

In accordance with Apple’s new robot “Daisy” that was announced on April 19, 2018 there were a few more highlights at that time that may affect Apple stock for the following year. Project Marzipan is Apple’s in-development solution to allow macOS computers to run iOS apps and make its Mac computers more attractive and useful. As a result, I believe that more college/high school  administrators will consider buying the macOS computers again if they can run iOS apps. Future sales could improve after Project Marzipan is finally implemented this year. The Mac business accounts for 7.81% of Apple’s quarterly revenue which could rise and help Apple with further weaknesses in iPhone/iPad sales. My bullish stance on AAPL in long term resonates with this bullish I Know First long term  forecast  for AAPL.

Past I Know First forecast success with Apple

I Know First has made accurate prediction on Apple on September 8, 2017

AAPL is with 14% gain since this bullish forecast.

This bullish forecast for AAPL sent to the current I Know First subscribers on September 8, 2017 

I Know First Algorithm Heat-map Explanation

This indicator represents the predicted movement direction/trend. The signal strength indicates how much the current price deviates from what the system considers a balance or “fair” price.

The signal strength is the absolute value of the current prediction of the system. The signal can have a positive (increase), or negative (drop) sign. The heat map is arranged according to the signal strength with strongest up signals at the top. The table colors are indicative of the signal. Green indicates to the positive signal and red indicates a negative signal. A deeper color means a stronger signal and a lighter color equals a weaker signal. 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), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability measures the importance of the signal. The predictability is the historical relationship between the prediction and the actual market movement for that particular market. For each asset this indicator is recalculated daily. Theoretically the predictability ranges from minus one to plus one. The higher this number is the more predictable the particular asset is. In comparison to different time ranges, predictability will be higher for longer time. This means that longer-range signals are more accurate.

Predictability is a unique indicator of the I Know First algorithm which allows users to focus on the most predictable assets according to the algorithm. One should focus on predictability levels significantly above 0 in order to trust the signal, when ranging between -1 and 1.

Apple Stock Forecast: Why Project Marzipan Is Important To Apple’s Future

motek 1The 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.

Amazon Stock Predictions


Netflix stock predictions

Apple Stock Forecast: The $299 Apple iPad 2018 Is A Killer Gaming/Enterprise-Level Tablet

motek 1The 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

Summary:

  • The new 9.7-inch iPad 2018 is not only intended for the education market. It can also appeal to home and business/enterprise users.
  • Apple equipping the $299/$329 iPad with A10 Fusion CPU/GPU also makes it the best gaming tablet.
  • The 6-core PowerVR GPU of the quad-core A10 Fusion SoC is almost as good as the A11 Bionic’s Apple-made GPU.
  • Apple is taking a risk. The $299/$329 9.7-inch iPad might cannibalize future sales of premium $649++ iPad Pro models.
  • On the other hand, Apple could likely increase the total addressable market of its tablets by catering to price-conscious customers.

Apple (AAPL) ended 2017 as the top vendor of tablets with more than 26% of global market share. I expect it to remain the leader in tablet shipments for many years to come. Apple’s decision to offer its latest sixth-generation 9.7-inch iPad for just $299 to students/schools (and $329 to regular customers) can help it sell 13 million+++ tablets quarterly.

The future impact of Apple’s event yesterday goes beyond the education market. I expect this latest budget tablet to appeal not only to students/schools but also to gamers and home/office users.  By making this latest iPad compatible with the Apple Pencil stylus, small and medium business (who couldn’t afford $649++ 10.5-inch iPad Pros) might likely become new customers. The enterprise/business market for tablets is obviously much larger than the K-12/college education market.

The image below illustrates why corporate employees and business owners should consider buying a $329 iPad.  It’s a semi-iPad Pro!

(Source: Apple)

Apple Is Not Afraid of Taking Risks

Yes, there is some risk that a $329 iPad can cannibalize future sales of much more expensive iPad Pro models. However, companies who do not take risks are inept. The bright side of this new move is that Apple is betting it could increase its total addressable market by selling an affordable enterprise-level iPad. Apple now offers an enterprise-level tablet for less than $350.

Apple selling a budget tablet can help attract small/medium enterprise customers away from sub-$300 Windows 10 laptops, Chromebooks, and Android tablets. The A10 Fusion SoC-equipped $329 iPad 2018 can function like the premium iPad Pros (equipped with A10X SoC) in the office, on the road, and at home. The single-core processor compute performance of the A10X Fusion is just 14% faster than the A10 Fusion.

The 2018 iPad is compatible with the $99 ($89 for students/schools) Apple Pencil or other third-party brand of stylus. Furthermore, Apple has made new updates to its free iWork productivity suite to make it Pencil/stylus-compatible.  Apple might also extend the free 200GB iCloud storage to non-student users of the $329 iPad 2018. An improved iWork office suite coupled with free large cloud storage per user is an attractive proposition for small and large enterprise buyers.

The lower hardware margin on the 2018 iPad can be offset through sales of Apple Pencil and iTunes purchases. Some digital artists, employees, students, and teachers will eventually buy iOS apps/games, e-books, streaming TV/Music/movie subscriptions through their company or school-issued iPads.

Mobile Gamers Will Also Appreciate This Cheap iPad 

Many K-12/college students/teachers are gamers. They will certainly appreciate Apple’s use of the A10 Fusion SoC (System-on-Chip) on the $299 iPad 2018. The integrated 6-core PowerVR-based GPU (Graphics Processing Unit) n the A10 Fusion SoC is as good as Apple’s own integrated GPU for the A11 Bionic SoC.

Based on the Arena of Valor (Ultra Graphics Settings) test of Notebook Check, the A11 Bionic’s GPU is only 2% better than the PowerVR GPU of the A10. That’s a negligible difference. Due to its affordability, the iPad 2018 can become the best tablet for casual and hardcore mobile gamers.

(Source: Notebook Check)

The advent of console/PC-quality iOS games like Arena of Valor and Fortnite is boosting the mobile platform as the growth driver for video games. It makes perfect sense for Apple to sell a $299/$329 gaming tablet that can outperform Android tablets with Nvidia (NVDA) Tegra K1 GPUs. Keeping its number one status in global tablet shipments requires Apple to cater to mobile gamers.

Selling a budget iPad increases the number of iOS gamers. The more iOS gamers there are, the better it is for Apple’s 30% commission rate from iTunes App Store purchases.

Final Thoughts

Apple’s move to release a budget iPad that can be used for enterprise productivity and high-end mobile gaming is commendable. It is another good reason to stay long AAPL. The management of this company is ready to take risks which could lead to better long-term iPad sales.

I Know First has a very bullish one-year market trend forecast score (more than 200) for AAPL. I am therefore endorsing this stock as a buy.

The monthly technical indicators/moving averages of AAPL also supports my buy rating for AAPL.

Past I Know First Success With AAPL

Apple_forecast20180218

On February 18, 2018, I Know First published a premium article saying that it’s time to buy Apple’s stock as it would likely be growing in price in 2018. I Know First has been bullish on Apple’s stock on 1, 3 months and 1 year time horizon. As the time went by we expected that Apple’s stock would likely to significantly rise, especially in 3 month and 1 year perspective and hit the level of $170-$180 per share which has already happened. We suggested to buy it at that time and not to lose the increasing momentum. From the below graph one can see that on 1 month horizon the algorithm successfully predicted the movement of the AAPL stock price which is rise by 5.31%.

(Source: Yahoo Finance)

This bullish forecast for AAPL was sent to I Know First subscribers on On February 18, 2018.

To subscribe today click here.

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.

autodesk stock forecast


autodesk stock forecast

 

 

 

 

Apple Stock Forecast: Bullish Rally Goes On With Expansion To Austria And Leaks Of New Water-Resistant Lightining

Gleb ZInkovskii_photo

 

 

The article was written by Gleb Zinkovskii, a Financial Analyst at I Know First.

 

 

“Older people sit down and ask, ‘What is it?’ but the boy asks, ‘What can I do with it?’.”
-Steve Jobs

Highlights:

  • Apple has ideas for water-resistant Lightning connectors
  • Apple opens its first store in Austria
  • Apple’s Unusual Pursuit of Cobalt

Apple has ideas for water-resistant Lightning connectors

Apple is known for patenting concepts way before their introduction to the products. Recently, US patent bureau received applications from Apple regarding new moist and water resistant Lighting connectors for the iPhone chargers. As far as the latest phones produced by Apple can withstand inadvertent trips into puddles, sinks and toilets, it seems a reasonable step to make the most important iPhone accessory to be a water resistant as well.

Apple_stock_news_14032018_pic1

[Image Source: USPTO. See more details here]

The other Lightning cable design presents a deformable rubber or plastic O-ring to seal a cable connection against moisture.

Besides the new concepts described in the patent application filed on Thursday March 8th it contains the similar approach to protecting USB-C connectors, too. “A liquid-tight seal is formed between the accessory and the electronic device,” the application says, making them “… useful in moist, wet and/or dirty environments.”

As far as the competitors flagship devices from Samsung are already waterproof and have wireless charging abilities, it becomes crucial for Apple’s devices to keep up with this pace and have the ability to withstand hard treatments, especially when you consider that an iPhone X costs more than $1,000. But as countless shattered screens and a thriving smartphone case market show, true ruggedness remains elusive.

Apple’s ideas include a tapered Lightning connector that stuffs into its port and a rubber gasket that squeezes tightly to seal a port when a cable is inserted.

This Apple design shows a USB-C connector — found on Macs and some Android phones — that offers a water seal.

It isn’t clear whether Apple ever plans to ditch its proprietary Lightning connector for the increasingly common USB-C ports sprouting on Android phones and Apple laptops. But USB-C fans can take heart that Apple has an idea for sealing that connector, too.

Apple opens its first store in Austria, expanding its worldwide presence to 19 countries

Apple_stock_news_14032018_pic2

[Image Source: via Wikimedia Commons]

It has been less than a month since Apple opened its first official store in Seoul, expanding its presence to 18th country – South Korea. Now, Apple makes move to Austria and shifts its presence to 19th country by opening its store just in the heart of Vienna – between St. Stephen’s Cathedral and the Vienna State Opera. According to the latest data from www.statcounter.com, the current share of Apple vs Samsung is 30.34% and 41.88% respectively.

Apple_stock_news_14032018_pic3

[Image Source: www.statcounter.com]

At the same time, as per Statista data, it is projected that the smartphone penetration in Austria should increase from 62.32% in 2016 to 72.4% in 2022 of the total population. Effectively, one can consider it as a proxy to identify the potential growth of the smartphone market in Austria for the next 4 years.

Apple_stock_news_14032018_pic4

[Image Source: www.statista.com]

This 10% potential market growth is a plum that both Samsung and Apple, as well as their Chinese rival – Huawei, are willing to get the first. Samsung had already opened its stores in Austria way before 2017 and Huawei opened its store in December 2017, Apple’s move to follow their example seems not just logical, but a required measure to keep up with the market competition. “We can’t wait to join the bustling city of Vienna, a European crossroads so rich in history and culture,” said Angela Ahrendts, Apple’s senior vice president of Retail. Eventually, it became a priority for Apple to reach the existing and potential clients as soon as possible using Apple’s original store approach – Apple store is the place for Apple community rather than just commerce. The press release that followed the store opening states that “Visitors can participate in free Today at Apple sessions every day focused on photography, coding and app development, music, art and design, and more in The Forum. The diverse programs include Quick Start and How To sessions, Music Labs and Studio Hours, all led by Apple Creatives, the store’s experts in liberal arts. Interactive Photo Walks and Sketch Walks take participants outside the store to explore nearby sites in the city while learning new skills.” There is no need to add anything more to see that primarily this expansion has more marketing and promo role rather than just an official selling point. At the end of the day following this approach has great chances to improve the Apple’s position in the market by showing the personalized attitude to the user audience and the overall experience they receive from using of Apple’s products.

Apple_stock_news_14032018_pic5

[Image Source: By Tiger7253 – Own work, CC BY-SA 4.0, Wikimedia Commons]

Apple’s Unusual Pursuit of Cobalt

Apple_stock_news_14032018_pic6

Smartphone production comprises about 25% of the worldwide demand for cobalt. The element is one of the most important chemicals that gives significant increase to performance of the Lithium-ion batteries of every single modern smartphone that we got used to in our everyday lives. As far as the requirements for smartphones’ performance increase power consumption perspective wise, the smartphones’ manufacturers increase their demand for batteries. The challenge is that Apple and its rivals are not the only consumers in the cobalt and batteries market and the price fluctuations for cobalt may significantly affect the cost for iPhone and Mac production and decrease the margin received by the company. Recently, it became known that Apple is in direct discussions with cobalt suppliers, i.e. miner companies, to secure the supply of cobalt to Apple’s contractors which provide Apple with batteries for their products. Although it is not something that investors may have expected from Apple, it may be a smart and strategic move for a company that is ultimately responsible for the design and sale of a device and which should be best aware of the potential demand for batteries and respective costs planning. The result will be much more sustainable and stable delivery of Apple’s devices to the customers and, as a result, stable cash flow to be ultimately delivered to its investors. It is not clear what is the stage of those discussions, but taking into account increasing price of iPhones from generation to generation it may become crucial to secure the costs by Apple itself alongside the whole cost chain so as to be sure that it will stay competitive comparing to Samsung, for instance, which actually manufactures their devices rather than outsourcing it to Foxconn. The other side of such move is that Apple enters competition for cobalt supply with electric cars manufacturers like Tesla and traditional automotive groups such as Daimler.

I Know First Forecast on Apple

We see that Apple goes nose to nose with its competitors both on local and global scales. On local level it results in rapid expansion on a country-by-country basis through opening of official retail stores to 19th country and it is known that the expansion will continue to India, Thailand and even Saudi Arabia. From global perspective we see that Apple continues its good tradition of patenting every single technological development that may or may not be implemented in its products and even starts to strengthen it competitive advantage from the very bottom of the supply chain through new approach of taking control over the input supplies for its own suppliers. All that gives strong sense to me that the management focuses not only on tactical short term marketing and software measures for promoting new features of existing products, but elaborates on more long term strategy of achieving opportunity for stable products production costs and resulting prices that serve best interests of Apple’s clients and investors. I Know First forecast supports my opinion that Apple’s stock is going to become even more bullish over 1 month, 3 months and 1 year time with the signal and corresponding predictability increasing over those periods.

Apple_stock_news_14032018_pic7

Past I Know First Forecast with Apple

[Image source: Yahoo Finance]

On March 23rd, 2017 I Know First published an article by Motek Moyen, Senior Financial Analyst at I Know First, about cheaper new iPads that can shore up Apple’s waning tablet unit sales. We expected bullish behavior on 1 year horizon which almost passed since the forecast publication date and the shares went up by 27.26% shares since then. The bullish endorsement for Apple was backed by the positive algorithmic forecasts from I Know First.

Apple Stock Forecast

Current I Know First subscribers received this bullish forecast for AAPL on March 23rd, 2017

To subscribe today click here.

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.

How_to_read_IKF_heatmap

To subscribe today and receive exclusive AI-based algorithmic predictions, click here.

[1] Includes sales of Apple TV, Apple Watch, Beats products, iPod touch and Apple-branded and third-party accessories [Source: Apple Inc. Q1 2018 Unaudited Summary Data, Official Apple Inc. Press Release on February 1, 2018]

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