Apple Inc. (NASDAQ: AAPL) is on the verge of being the first $1 trillion market capitalization company, which is stunning when you consider that at the turn of the century the stock was trading at $1.25 and some thought the company would head into bankruptcy. With Amazon.com Inc. (NASDAQ: AMZN) right behind Apple, it’s almost a given that we will have two $1 trillion market capitalization companies trading on the Nasdaq before the end of 2018.
One of the very best analysts on Wall Street that covers Apple is Sherri Scribner from Deutsche Bank, who almost always seems to have a little more insight into the company than her peers. In fact, she does a weekly piece for the firm called “Scribner’s Slice of Apple.” Despite her incredible depth of knowledge, she has a Hold rating on the shares of the tech giant with a $165 price target, which is quite a bit lower than the current trading levels.
Given that Apple is a widely held company, either held directly or through mutual funds and exchange traded funds, we thought this week’s data dump on the company was extremely interesting as Apple, like most of the mega-cap tech giants, looks to constantly expand its business, product and service lines. With Apple’s Worldwide Developer Conference wrapping up last week, lots of big announcements have hit the tape.
1) Apple could announce a broader use of the NFC chip in iPhones and software tools to help break iPhone addiction could be included in the upcoming iOS update.
2) Apple could be expanding the use of the near-field communication (NFC) chip in iPhones, according to the Information. Originally introduced in iPhone 6 and 6s in 2014, NFC chips allow for the wireless transfer of sensitive data without an internet connection, thus enabling secure Apple Pay payments. While other smartphone makers have been using NFC technology more broadly, Apple has limited the use of iPhone NFC chips to Apple Pay. However, The Information reports that Apple employees are currently using their iPhones to access buildings and unlock doors at work, suggesting iPhone NFC chips have been enabled to work with smart locks.
3) Apple is reportedly planning to release a set of tools that will allow users to monitor their device usage and the time spent in certain apps, according to Bloomberg. The initiative, called Digital Health, is expected to be announced at Apple’s Worldwide Developers Conference next week, and released as part of the mobile operating system update.
4) Apple is reportedly planning to use OLED panels in all of the upcoming iPhone models this year, according to sources cited by South Korea’s Electronic Times. Currently, only iPhone X features an OLED screen with all other iPhone models using LCD screens. However, analysts cited in a Bloomberg article cast some doubt on the Electronic Times report, given OLED supply constraints as well as the higher cost of OLED panels relative to LCD displays.
5) Apple is planning to add a second iPhone power management chip (PMIC) supplier for its upcoming iPhone models, according to Dialog Semiconductor. Based on a Dialog Semi statement, Apple has cut its PMIC order volumes, resulting in a 5% reduction in Dialog Semiconductors fiscal 2018 sales expectations. According to Reuters, Apple will cut its chip orders with Dialog Semi by 30% this year.
6) In a report commemorating the App Store’s 10th year, App Annie reported that worldwide App Store sales totaled $42.5 billion in 2017, up 31% year-over-year, and are expected to reach $53.1 billion in 2018. App Store sales continue to dominate the app market and accounted for two-thirds of consumer app spend globally in 2017 versus Google Play’s one-third share. In contrast, Google Play remains the leader in app downloads with 70% share of worldwide downloads, compared to the App Store’s 30% share.
7) Apple Music has formed a new internal division focused on music publishing and publishers, according to Music Business Worldwide. The group will be headed by Elena Segal, who was the legal director of iTunes International. The report suggests Apple Music’s new head Oliver Schusser is focused on developing Apple’s relationships with songwriters and music publishers.
So another busy week for what, at least for the time being, is the world’s biggest company by market capitalization. Scribner’s team digs every week to make sure investors have the most up to date information on the tech behemoth. With the Apple nation always looking for the newest and most up-to-date information on the company, Deutsche Bank consistently delivers.