Apple Stock News: Apple and Amazon Join Forces in Lucrative New Partnership

Apple and Amazon’s New Partnership and What this Collaboration Means for the Stock

Based on Apple’s latest earnings report, iPhone unit sales are flat. The iPhone is reportedly not selling as well as expected, though the nearing holiday season will surely bring an expected spike. Global sales of tablets are also shrinking. It is therefore a great relief to learn that Apple successfully persuaded Amazon (AMZN) to sell iPhones and iPads in America and other countries. Amazon is the third-ranked vendor of tablets with its Fire Android products. It therefore came as somewhat of a surprise that Amazon agreed to be a direct reseller of iPads.

(Source: Statista)

Why Apple Needs Amazon

I previously harped about it many times – AAPL’s price movement is largely dictated by how many units of iPhones it sold.  AAPL dipped post-earnings last November 2nd because investors are scared that iPhone sales have peaked. The management’s decision to no longer report unit sales of iPhones going forward is worrisome for some investors. It was perceived as tacit admission that iPhone unit sales have really peaked.  The mood now is that Apple can no longer rely on the iPhone for growth.

(Source: Statista)

 

The dip in Apple’s valuation to below $1 trillion confirmed that investors care more for iPhone unit sales than any other metrics. It did not matter that Apple finished its fiscal year 2018 with record revenue and profit.  In spite of the flat lining unit sales of the iPhone, Apple’s $265.59 billion in FY 2018 revenue was still a 15.86% year over year increase. The annual net income of $59.53 billion saw an increase of 23.12% Y/Y. The pessimism over AAPL has gave it a lower EV/EBITDA valuation than MSFT and GOOG. This undervaluation is in spite of AAPL’s superior balance sheet and revenue/net income performance. Apple is clearly the better value play than its peers.

(Source: Seeking Alpha)

How Amazon Will Help

Going forward, Apple’s stock could rise again because of Amazon helping it sell more units of the iPhone and the iPad. Apple may no longer divulge specific quarterly unit sales for its products, but growth could still be surmised through improved revenue over the next succeeding years. Apple already has more than 500 retail stores around the world. However, Amazon touts more than 100 million Prime subscribers. They are all potential customers of Apple’s pricey products. There is also the strong possibility of Amazon offering subsidised price tags for the Apple Watch, iPhone, and iPad to select Prime subscribers.  Going forward, this potential Amazon subsidy could increase Apple’s hardware sales.

This partnership is also perfect timing for this upcoming Christmas shopping season. People around the world will be receiving their 13th-month pay and Christmas bonuses. Millions of Amazon shoppers will be capable of buying the most ‘affordable’ $750 iPhone XR.

A survey last July 2017 revealed that 59% of American respondents with income of $75K to $99K are Amazon Prime subscribers. Amazon’s Prime subscriber base definitely has wealthy individuals who can easily afford the most expensive Apple product. Statista’s chart below clearly illustrates that many Amazon Prime members are perfect targets for the new pricey iPhones and iPad Pros.

(Source: Statista)

Conclusion

It is a long-term tailwind for Apple that Amazon has agreed to become an authorised reseller of Apple watches, phones, and tablets. Amazon will also delist non-official resellers of Apple products on its marketplace by January 4, 2019. By eliminating unauthorised resellers on Amazon’s websites, Apple is assured of price uniformity for all of its products sold.  Eliminating price-cutting third-party sellers can improve Apple’s topline and bottom-line. It is an open secret that many unscrupulous individuals and organisations resell deeply-discounted stolen iPhones/iPads on online stores like Amazon.

Amazon is now also a massive sales channel for refurbished iPhones and iPads that Apple needs to unload. These refurbished products are from Apple’s own trade-in program. Apple practices device trade-ins so it could sell newer, more expensive models. The exchanged phones, tablets, and computers that Apple has stockpiled can be quickly monetised through Amazon.

I rate AAPL as a buy. This stock also has a bullish one-year forecast from I Know First. The high 0.81 predictability score means I Know First has a long track record of correctly predicting the 12-month price trend of Apple’s stock.

The vibe from monthly technical indicators and moving averages trends are in favor of going long on AAPL right now.

(Source: Investing.com)

Past I Know First Success with Apple Stock Prediction

I Know First has been consistent and accurate with AAPL stock predictions in the past.

This bullish 1 Month/3 Month/1 Year Forecast that was sent to our subscribers on August 22, 2017.

 To subscribe today click here.apple stock predictions

How to read the I Know First Heatmap

The article discussed possible acceleration of Apple’s research on Augmented Reality and self-driving car technologies as those are considered to be future diversification areas for Apple. Some key financial aspects were analyzed, including posting of a new record high of $162.51 at the end of August 2017. Finally, we expected that Apple coming up with a real major upgrade to the iPhone 7 could propel the stock to a new 52-week high. Since the forecast’s release, where the bullish signal of 131.7 was identified by the algorithm with predictability rate of 0.61, Apple Inc. stock price surged that high that on August 2, 2018 the company’s market capitalization became more than $1T and ended up on August 22, 2018 with stock price increase by 38.86%.

Summary:

    • This holiday quarter should see a notable increase in Apple’s hardware sales. Apple’s flat lining iPhone unit sales desperately needs a boost.
    • Amazon recently agreed to sell Apple Watches, iPhones, and iPad tablets in its U.S. and international online stores.
    • AMZN agreed to become an official Apple reseller. Amazon will delist unauthorized resellers of Apple products using its platform by January 4, 2019.
    • Amazon touts more than 100 million Prime subscribers. They are all desirable potential customers for Apple products. Buying online is faster than queuing up at an Apple retail store.
    • I still rate AAPL as a buy.

Please note-for trading decisions use the most recent forecast. Get today’s forecast and Top stock picks.

Apple Unveils Highly Anticipated New Line Up at October Event

Apple Unveils Highly Anticipated New Line Up at October Event

(Flickr)

After a long period of anticipation, Apple has held its October event in Brooklyn this past week. The event’s announcements of upcoming products included the Retina MacBook Air, a new Mac mini, and a pair of new iPad Pros. Feedback from those who have been slightly unimpressed with Apple as of late, was very positive. Apple also announced Q4 results in which they surpassed revenue for the previous quarter, and the same quarter of the previous year. Finally, Apple reported its Q4 earnings this week. The company generated $62.9 billion in revenue and $14.12 billion in profit from 46.89m iPhones, 9.69m iPads, and 5.3m Macs sold.

The Lineup: iPad Pro

The most anticipated announcement of the big three was the iPad Pro lineup. As expected, the new iPad Pro is available in 11-inch and 12.9-inch, with no Home button and Face ID support. The display stretches further to the edges this time around, via its liquid retina display. Apple has released a new Smart Keyboard Folio and Apple Pencil to accompany the new iPad Pro. To finally join it’s newest products, the new iPad Pros will also use an USB-C connector, allowing customers to use one cable for several devices. First introduced by Apple CEO Tim Cook several years ago, and said to represent his vision of the future of personal computers, the iPad Pro have always had more computing power than their non-Pro counterparts. Fo this reason, it has become a big favorite of professionals in the realm of creativity, particularly in the music and media industries. Apple says the A12X Bionic chip makes them more powerful and faster than any other tablet on the market. Meanwhile the tablet’s storage capacity can be extended to an massive 1 terabyte. The new 11-inch iPad Pro starts at $799, while the 12.9-inch starts at $999.

Retina MacBook Air

The Retina MacBook Air starts was one of the more stand-out products of the show. It is available in three colors for the first time: silver, space gray, and gold. The new MacBook is powered by an 8th Generation Intel Core i5 processor, with 8GB of RAM. It is equipped with Apple’s T2 security chip, USB-C, and a Butterfly keyboard, as well. The new MacBook Air also features Touch ID, which allows customers to access their laptop way more conveniently. This new feature will also allow people to use Apple Pay with just a quick touch of their finger. Grove also added during the presentation that the new 13.3-inch Retina Display “quadruples” the pixel count of the old MacBook Air, with an impressive 2560×1600 native resolution. The MacBook Air also promises “48% more colour” than the previous iteration’s screen. The product that was lagging behind other updated Apple products is finally receiving some appealing changes and could become a very hot seller.

Mac Mini

The Mac Mini is powered by a quad-core processor. An upgrade to a six-core processor is also an option if you need more power, which would make the computer 5x faster than before. The Mac Mini also holds 64GB of memory. Much like the MacBook Air, you get Apple’s T2 security chip. This would mark the first time since 2014 that the product is being upgraded. The Mac Mini will be starting at $799 with a November 7th release date.

All of these products are being made with 100% recycled aluminum. This gives them yet another edge over competitors. This may acquire some extra sales, because let’s be honest, this is Apple. The company knows how to maximize profit, which should be good news for any investor.

Q4

Apple has released its 2018 fourth quarterly earnings which include initial iPhone XS and iPhone XS Max sales as well as the Series 4 Apple Watch. The iPhone XR launched earlier this month and didn’t make the previous quarter. They reports $62.9 billion in revenue and $14.12 billion profit. Apple us forecasting next quarter’s earnings to be between $89 billion and $93 billion. Fiscal year 2018’s Q4 results compare to the previous quarter’s $53.3 billion in revenue, $11.5 billion in profit. This includes 41.3 million iPhones, 11.55 million iPads, and 3.7 million Macs. In the same quarter one year ago, Apple reported $52.6 billion in revenue. Look for the release of all these heavyweight products, especially right around holiday time, to bring in some serious revenue for Apple.