ToniSacconaghi
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iPad would be America's 11th largest tech company
The iPad dominates in the tablet market, and according to Bernstein Research analyst Toni Sacconaghi, the tablet raked in US$32 billion in sales last year. As noted by Fortune 2.0, the iPad is so successful that it would rank as the 11th largest tech company in the US, if Apple spun off the iPad into its own company. The iPad as a company would even make it into the Fortune 500, climbing to the 98th spot above No. 107 McDonalds and No. 136 Nike. Sacconaghi believes the iPad will continue to grow over the next few years with sales as high as $46 billion in 2013. Sales will start to slow in 2015 and beyond because of market saturation. By then, everyone and their brother will have an iPad.
Apple stock buyback to begin today
Part of Apple's plan to burn up a bit of that US$117.2 billion cache of cash starts today, according to Fortune's Philip Elmer-DeWitt. Over the next three years, Apple will use US$10 billion to repurchase shares of AAPL. Elmer-DeWitt notes that one Wall Street analyst, Bernstein's Toni Sacconaghi, was less than thrilled by the announcement of the stock buyback when it was announced back in March. Sacconaghi wanted the company to give back some of the cash horde to shareholders, in particular the institutional investors who hold 70 percent of the total ownership of Apple. The repurchase plan really doesn't accomplish that, and Sacconaghi believes that many institutional investors wanted to see a larger dividend instead. The impact of most stock buyback programs is an increase in earnings per share (EPS), since the earnings are spread over a smaller number of shares. Sacconaghi believes that EPS will only climb about 1-2 percent per year as a result of the buyback program, and that there won't be a rise in the share price as a result.
Apple's Tim Cook hints at cheaper iPhone, prepaid possibilities to come?
Apple COO Tim Cook got all buddy-buddy with Bernstein Research analyst Toni Sacconaghi this week, talking about Apple's business strategy -- nothing out of the ordinary there -- but this morning, that analyst decided to publicly paraphrase an intriguing part of the interview. Guess what? It sounds like a cheaper iPhone may indeed be in the cards: While Tim stopped short of explicitly stating that Apple would pursue a lower price iPhone, he did state that Apple was working hard to "figure out" the prepaid market and that Apple didn't want its products to be "just for the rich," but "for everyone"; he also stated that Apple "understood price is big factor in the prepaid market" and that the company was "not ceding any market." Cook noted that Apple executives – including himself – had spent "huge energy" in China, noting that it is "a classic prepaid market." He further noted that the handset distribution model was poorly constructed and that Apple would look to "innovate" and do "clever" things in addressing that market.As you can see, there aren't any statements of fact here, just some general strategy ideas, but if Apple indeed plans to put an iPhone in every pot, it would be helpful if it didn't have to rely on the carrier subsidy model.
