New products needed to propel Apple share price

on Dec 2, 2013
Updated: Oct 21, 2019
Listen Monday, December 2: UBS investment analysts have reaffirmed their ‘neutral’ rating on Apple’s shares (NASDAQ:AAPL), saying that the iPhone maker has become a stalled growth stock but not a broken company. Stephen Chin, Steven Milunovich, Amitabh Passi and Brent Thill project full-year 2014 earnings to increase to about $44.50 on the back of mid-single-digit revenue growth and a flat gross margin.

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The analysts don’t expect a significant rally in Apple’s shares until new product categories are introduced. The iPhone maker’s strategy of focusing on the premium user experience is reasonable, as in the long-term history favours companies that choose higher quality over cheaper prices.
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Potential upside could come from a distribution agreement with China Mobile and higher demand for the iPhones 5S and 5C in China. In this case Apple’s shares could climb to $580, UBS says. However, if demand is weaker than expected and there are project delays there could be a period of decelerating revenue growth.
Apple’s shares have finally surpassed their January 2 closing price and are now $23.9 or 4.5 percent higher on the year-to-date. At the current share price, Apple’s market capitalisation is above the $500 billion mark.

**Apple spends $587 million for production of sapphire glass**
Apple has reportedly spent $587 million (₤357 million) on the development of sapphire glass that will be used for the screen of the iPhone 6. The glass is more expensive and trickier to produce than the Corning Gorilla Glass Apple currently uses.
Sapphire glass is currently used to cover the iPhone 5S’s Touch ID home button and the rear-facing camera. The glass is said to be virtually scratch-free.

Apple invested the money in its partner sapphire-maker GT Advanced Technologies to develop more furnaces needed for the production of the glass. According to GT Advanced Technologies, Apple’s investment “accelerated the development of its next generation, large capacity ASF [Advanced Sapphire Furnaces] furnaces to deliver low cost, high volume manufacturing of sapphire material.”

Last week market researcher Kantar Worldpanel reported that Apple grabbed three quarters of the Japanese smartphone market in October after the country’s largest carrier started to support the iPhone (Company grabs 76% of Japan’s smartphone sales).
**Analysts on Apple**

Two equity analysts rate Apple’s shares as a ‘sell’, 11 give them a ‘hold’ rating, 39 assign them a ‘buy’ rating and three have issued a ‘strong buy’ rating. Apple has a consensus rating of ‘buy’ and an average price target of $581.80.
**As of 07.30 UTC buy Apple shares at $557.88.**
**As of 07.30 UTC sell Apple shares at $512.20.**
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.
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