Roundup: Apple analysts mostly positive about WWDC announcements

Karen Haslam
17 June, 2012
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We’ve collected together some of the reactions of analysts to the WWDC keynote last week. Despite the company not announcing a television, there is a lot of positivity about the announcements and credit given to Apple CEO Tim Cook and his team.

Looking ahead, two analysts predict that the company could reach US$1000 a share, with one suggesting that the company could hit US$1111 within 12 months.

There was some debate about the lack of smart television announcement during the keynote. Last week Jefferies’ Peter Misek was convinced that a television-related announcement would make the cut in the Apple keynote.

Rather than admit he was wrong he appears to be suggesting that Apple missed it off the roster because it had so much else to talk about, saying: “We believe there was too much content for a TV to be announced.”

Misek is still convinced that the TV is coming soon. “We now see a TV being unveiled at its own event likely within the next three to six months. We believe the launch of the device is still a 2H 2012 event,” he said.

Wedbush’s Scott Sutherland thinks that Apple did make a television related announcement: “We view AirPlay as a precursor to a more full-fledged iTV offering.”

Needham’s Charlie Wolf noted that many were disappointed by the lack of a smart TV announcement, but also mentioned AirPlay as being of interest. He said: “The one “disappointment” in the keynote is that, contrary to the predictions of many pundits, Apple did not specifically focus on the company’s rumoured Apple TV service. However, many of the components of such a service were highlighted through the company’s AirPlay technology.”

Some analysts had expected Apple to make an SDK available for writing apps for the current Apple TV and then eventually the new smart TV. Barclay’s Ben Reitzes said: “We were surprised not to see Apple introduce the ability to write apps for Apple TV.”

JMP’s Alex Gauna believes that the decline of Apple’s share price following the keynote was due to lack of television announcements (although were also concerns on the markets caused by Europe, which may also have had an effect). He wrote: “The stock reversed the modest gains it had seen for most of the day as the event concluded, closing down –1.6 percent (S&P 500 – 1.3 percent) due to the lack of any noteworthy surprises and likely on a modest amount of disappointment that there were no Apple TV advances.”


Retina display MacBook Pro

The new MacBook Pro with Retina display got a few comments, with Topeka’s Brian White describing it as “a work of art”.

However, that may not be enough to encourage sales: Merrill Lynch’s Scott Craig said: “The new MBP with retina display is certainly ahead of competing products, but given its price point, we expect the product to remain niche in the near term,” and J.P. Morgan’s Mark Moskowitz noted: “While the MacBook refresh was in line with the blogosphere’s expectations, we believe that the new specs do not cede ground to the Ultrabook crowd,” according to a Fortune report.


Apple hates Google / Apple loves Facebook

Also noted was Apple’s anti-Google stance, introducing its own version of Maps. Apple’s finger up at Google had the attention of many analysts.

Topeka’s Brian White noted: “The widely anticipated Maps apps was a big hit at the keynote, including new turn-by-turn navigation, real time traffic information and Flyover with 3D views…”

Piper Jaffray’s Gene Munster wrote: “We believe Google is unlikely to ever engage in the same type of partnership as Apple and Facebook, making the iPhone the de-facto ‘Facebook phone’… Apple’s expansion of Siri is a more direct shot to Google that we had expected last week.”

Speaking of Facebook, Sterne Agee’s Shaw Wu wrote: “Rather than build its own social network, AAPL is choosing again to further partner, this time with Facebook, Yelp, OpenTable, Baidu and others, building on its already strong integration with Twitter. We think this is smart, allows AAPL to remain neutral and, ironically, give AAPL customers a richer set of choices.”

“AAPL gets the benefit of leading social networks but not have to worry about the business model and monetisation that most are still trying to figure out,” he added.


Siri and iOS 6

As for Siri, Goldman Sachs’ Bill Shope noted: “Apple announced that Siri will now be available on the new iPad, which we believe should add to the momentum we expect for the device as it continues to ramp this quarter.”

Deutsche Bank’s Chris Whitmore said: “We expect the software/Siri enhancements and new hardware to attract users and developers to the iOS platform, extending AAPL’s lead in mobile OS.”

Credit Suisse’s Kulbinder Garcha also noted how iOS 6 would help Apple maintain its lead with iOS: “The increasing levels of functionality available to developers should continue to make iOS the platform of choice for the critical developer community.”

Shope added: “The company also announced that FaceTime will be able to run over a cellular connection and not just over Wi-Fi. We expect this to strengthen Apple’s platform for customers and to further separate Apple from its major competitors in the smartphone and tablet markets.”

Another new feature coming in iOS 6 is Passbook, and one analyst noted that this could be a precursor to being able to make mobile payments. J.P. Morgan’s Mark Moskowitz said: “In our view, Passbook is the precursor to what we have referred to previously as “iPay” for mobile payments.”


China in their hands

Other analysts picked up on Apple’s renewed focus on China, an important new market for the company. Merrill Lynch’s Scott Craig said: “After recent years of aggressive expansion in China, Apple remains focused on China, which was evident in the new China-centric OS features like improved input method, partnerships (Baidu, Youku, Tudou, Sina Weibo, Siri support).”

Morgan Stanley’s Katy Huberty notes: “Apple announced new integration with Baidu, Sina, Youku and Tudou as well as improved Chinese text input, a new dictionary, eight new fonts and both Mandarin and Cantonese language integration with Siri, which all reflect the significant investments Apple is making to target this large and growing market.”


Rating the team

There was some debate about whether the team presenting the keynote was able to fill late Apple CEO Steve Jobs’ shoes. The general consensus is that Apple CEO Tim Cook & Co did a good job.

ISI’s Brian Marshall said: “While Steve Jobs’ past performances are impossible to duplicate, we believe presentations by Tim Cook along with senior executives did a solid job keeping the AAPL faithful satisfied.”

Jefferies Peter Misek agreed: “”Tim Cook delivered a solid performance aided by a strong cast.”

Not everyone was as happy, however. Global Equities’ Trip Chowdhry said: “Common sensical integration of Facebook and Twitter. Is this the best we can get from Apple, post Steve Jobs??”


New targets

Topeka Capital Markets analyst Brian White, who was the first to suggest that Apple could pass the US$1000 price-target mark, has now raised his target to predict that Apple could hit US$1111 within 12 months.

Another analyst, Wedbush Securities’ Scott Sutherland agrees that the US$1000 may be achieved, but within two years. White told CNBC: “I couldn’t be more bullish on Apple right now. When I look forward to the fall, we have got an iPhone 5 expected in September, I think we are going to see an iPad mini at the same time in September, we have got an Apple TV that’s clearly on its way in the next several months… I couldn’t get more excited about Apple.”

Wedbush Securities analyst Scott Sutherland, who has set his target at US$800, believes that Apple is on track to surpass the US$1000-a-share barrier and become a trillion-dollar company, but he sets a target of within the next two years: “It will be choppy in the near term but I think we are going to finish the year very strongly.”

Sutherland thinks the launch of the iPhone 5 will be the catalyst for a stock rally along with the introduction of Apple’s smart television. He also thinks China will be significant: “If they keep delivering on the numbers and strong growth, US$800 is just going to be a stop-off point.”

Investment Bank Canaccord Genuity has raised its price target on Apple to US$800 from US$775 on the back of news of the new MacBook line up.

In a note to clients, analyst Mike Walkley said: “While our checks indicate Apple’s iPhone has lost near-term market share that will likely continue through the summer or until the iPhone 5 launch in Sept/Oct, we believe increased Mac sales could help offset these declines,” according to MarketWatch.

Sterne Agee analyst Shaw Wu has maintained his US$780 price target on Apple stock, saying: “We are more intrigued with the new maps app, greater social networking integration. We find these ‘under the radar’ software enhancements significant and will drive more adoption of the Apple platform,” reports Reuters.

Fortune has published the complete feedback of all the analysts mentioned here.

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