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.

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Apple Stock News: AAPL in 2017

Apple Stock News

For the latest Apple Stock News, AAPL closed at $116.73 on Wednesday, December 28, 2016 with a 0.78% loss, or $0.91 from its previous close of $115.82 per share.

screen-shot-2017-01-01-at-10-45-12-am

On December 30, Apple released information that one of their manufacturers will be opening an Apple factory in Bengaluru, India. The production from this factory will begin in April of 2017. The tech giant plans on cutting production by 10% on iPhones this year but even with the cutback, analysts are bullish on AAPL. Twenty-six analysts have placed a buy rating for AAPL out of thirty-two. Since May, the share price on APPL has gone up 29% from its low, but as of this weekend, APPL began to fall back down from $117.26 on December 27, 2016.

There are a few things that Apple can do in the new year in order to continue their growth. Amazon has come out with their Amazon Echo, a portable device akin to Siri. However, Amazon Echo has features that trump Siri. Amazon Echo can:

  • Plays all your music from Amazon Music, Spotify, Pandora, iHeartRadio, TuneIn, and more using just your voice
  • Fills the room with immersive, 360º omni-directional audio
  • Allows hands-free convenience with voice-control
  • Hears you from across the room with far-field voice recognition, even while music is playing
  • Answers questions, reads audiobooks and the news, reports traffic and weather, gives info on local businesses, provides sports scores and schedules, and more using the Alexa Voice Service
  • Controls lights, switches, and thermostats with compatible WeMo, Philips Hue, Samsung SmartThings, Wink, Insteon, Nest, and ecobee smart home devices
  • Always getting smarter and adding new features, plus thousands of skills like Uber, Domino’s, and more

Retrieved from Amazon

To compete with Amazon, Apple must come up with a better version of Siri, in speaker form. There will be a race to partner up with Beats by Amazon, Google, and Microsoft. Apple’s best bet to beat the Echo is by winning the race for Beats.

Keep checking back for more news regarding AAPL. For Full AAPL forecasts and investment advice by our state of the art algorithm click here.

Apple Stock News: Will Apple Be First to Reach $1 Trillion Market Cap?

Apple Stock News

Will Apple Be First to Reach $1 Trillion Market Cap?

For years, investors and analysts have been speculating on which company will be the first to reach a market cap of $1 trillion. In June of 2015, the total market cap for the global economy surpassed $65 trillion for the first time and the belief that a company would soon see a market cap in the 13 figures no longer seemed implausible.

apple stock news

In 2012, analysts were already looking at the company’s market cap growth of $400 billion for the 4 years between 2008 and 2012 and seeing potential for continued growth in the future. As Apple got ready to release the Apple Watch in early 2015, analysts continued to set higher target prices for the stock.

However, AAPL prices peaked in the summer of 2015 soon after the release of the Apple Watch, and investors, analysts, and consumers alike seem to have lost faith in the tech giant in recent months. Since releasing the earnings report for the second fiscal quarter, revealing depressed revenue and a decline in iPhone sales, the company’s share prices have also declined, dipping more than 9% since the report came out.

News of Warren Buffett’s Berkshire Hathaway purchase of $1.07 billion worth of AAPL stock helped to start a price rally for the stock in the last week. Other high-profile investors have increased their holding in Apple as the stock price hit its lowest point in two years. However, analysts have noted that Buffett’s newfound interest in Apple could mean that the company’s days of explosive growth are in the past. Buffett’s investment strategy targets companies with strong fundamentals and steady growth when they are out of favor with the market.

With a current market cap of just under $516 billion, Apple will need to just about double in order to be the first company to reach a market cap of $1 trillion. Google’s parent company, Alphabet, currently has a market cap of about $484 billion, not far behind Apple, and has seen much more steady growth. Apple will need to make some drastic changes if it wants to jump charge growth and be the first company to reach a $1 trillion market cap.

 

Apple Stock News: Alphabet passed Apple as the most valued company

Apple Stock News

After an amazing report of Alphabet, Apple was displaced by Alphabet as the most valued company in the world. Yesterday, Alphabet reported revenues and earnings better than expected by analysts and its shares went up strongly.

apple stock news

 

The company smashed expectations on both ends, bringing in $21.3 billion in revenue and earnings of $8.67 per share. Analysts were expecting earnings of $8.09 on $20.8 billion in revenue. And with that, Alphabet became the most valuable publicly-traded company in the world, coming in at a market cap $558 billion after jumping about 8% after the company reported its fourth-quarter earnings, and passing Apple, which sits at a market cap of $535 billion. Remember that Apple reported bad numbers last week and its shares fell down. Yesterday, Apple shares lost another 0.95%

There’s a clear narrative here. Alphabet, a software company with a few extra hardware bets, shares have dramatically outperformed those of Apple, a hardware company with a few extra software bets.

Google´s core business continue to grow as well. As to users, the company said that active users of Gmail grew to 1 billion. Talking about Google´s core advertising business, cost per click fell 13% year-over-year, while paid clicks increased 31% in the same period. This has been a trend for Google, as more activity shifts to mobile devices, the value of each advertisement click tends to go down.

Google, too, is still not immune to what’s happening with foreign exchange rates and the general global economy. Revenue was up 18% year-over year, though in constant currency it would have risen $24%. Apple, for example, said there was a difference in $5 billion in revenue if not for foreign exchange rates, and for Google that represents about $1 billion in revenue.

 

Algorithmic Recommendation

I Know First provides daily investment foresight, mainly through stock forecasts via their predictive algorithm. The algorithm incorporates a 15-year database and utilizes it to predict the flow of money across 3,000 markets.

The self-learning algorithm uses artificial intelligence, predictive models based on artificial neural networks, and genetic algorithms to predict money movements within various markets.

I Know First’s algorithm was able to correctly predict the behavior of GOOG’s stock price in the past. Indeed, I Know First wrote few days ago an article about Alphabet talking about its new products, researches and the potential of the company. We recommended buying Alphabet for different terms, as you can see below.

Apple Stock News: Apple Rumored to Release a New, Smaller iPhone:

Apple Stock News

iPhone sales are expected to decline in the coming quarter for the first time since the phone was introduced in 2007. This past quarter, iPhone sales barely increased leading analysts to ask Apple CEO, Tim Cook, if he planned on lowering the price during the earnings call. A question to which Cook replied “We don’t design to a certain price point. We design a great product and we make it priced at a great value.”

Apple Stock News Barclays’ analyst Mark Moskowitz explained the he thinks lowering prices is a bad idea, given the strength of the iPhone franchise and the expected release of the iPhone 7. Furthermore, he said that lowering the price would make the iPhone feel more like a commodity saying, ““Psychologically, it’s a tightrope.”

According to the researcher Statista, in Q4 2015, the average cost of an iPhone for consumers was $691; almost triple the price of an Android phone, which cost an average of $231.

Various Apple rumor websites have reported that the company will be releasing a new 4-inch phone that will replace the iPhone 5s, the current cheapest iPhone. The new iPhone, rumored to be called the iPhone 5se, is supposed to have a faster processor and will be able to use Apple Pay. The new phone could potentially appeal to the more budget conscious Apple consumer, as well as to those who are not interested in having such large screen.