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Will Apple Lose Market Share?

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  • Description

    Saturna Capital senior tech analyst Paul Meeks gives his outlook for Apple earnings.

  • Duration 4:02
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Heat index ratings apple shares -- among the most widely held so what does all of this mean for your investment.

Paul Meeks senior tech analyst and director of institutional investing its texture and a capital joins me well -- Thank you I know you along with the rest of Wall Street really are concerned about the company's financials picture far from counting apple out just yet rate.

That's right I'm not particularly concerned about what happens for the report for the quarter ended December 31.

Like everybody on the planet I have a bit of anxiety about what they give for the guidance for the march quarter and the June quarters.

All right so we spend a lot of time discussing apple let's get right to what is your share strategy we know that shares are off about 30% from that 705 dollar high back in September buy sell -- hold right now.

You know it's always very Dicey to make that recommendation or answer that recommendation right before -- us but if I had to put my feet to the fire and we're long term investors like continue to buy the shares OK so what do you think the share price will be say the end of the year.

Boy that's a tougher call the interest like military Trace my welcome back about 700 dollars.

No I I don't think so I don't think that there's much downside because here's why.

Even if they have disappointing guidance for the march quarter in the last ninety days.

The estimate for the quarter the report today.

The quarter -- guide to and for the fiscal year ended September 2013 all those EPS estimates -- have been lowered by the street.

Somewhere between ten to 15%.

So I could say that even there is a negative outcome -- that's already in the stock price.

And all of this concern.

That we've been talking about hearing over weakening demand for iPhone 5 global demand waning you're saying has already been figured it -- report for this most recent quarter is weaken even -- forward guidance is disappointing as well if it's not as bad.

Some of these estimates have shown may be as we see the stock price action today as a matter fact it could actually be.

Bullish for shares.

I think so you think about it ever since so late last fall we've had a drop anywhere of 25 to 30% that is -- extraordinary drop.

Estimates have already come in.

You have a stock that is trading.

On next fiscal year's numbers and about nine times earnings you strip out their cash -- seven times the S&P 500 trades in the low teens.

And I would make the case -- this is a much better company.

Than the average company in the S&P 500 you must be somewhat worried though about apple losing Smartphone market share the likes of android and others.

That is an excellent point but here's what I think first of all I think there's too much.

Direction being paid.

To the unit market share and -- your previous speaker talked about what are the -- shares gonna be where the units going to be for the quarter coming up.

However when you take a look at it with the apple ecosystem.

It's not necessarily about hardware unit share it's about how much of mobile revenue.

And profits -- -- this company and regardless of the market share and I expect and -- to continue to take some share.

Apple continue to have a a monster share of the overall profits of the wireless industry and that's -- all that matter.

All about the apps right -- kid learns -- this post Steve Jobs aired this seemingly lack of innovation.

With the current CEO with Tim Cook in some of the management shake up some of the problems we've seen there.

You know I think there might have been a little bit of -- drop back in the vision but the other hand Tim Cook has been running this company operationally for many years.

And when you think about it the company has been so strong in the past.

Innovation -- and it's grown to this monster revenue number.

Monster market cap.

I do think that you cannot expect each incremental innovation to be something that is simply stunning the companies -- so large.

Paul makes you appreciate your analysis walking -- -- to Apple's latest earnings report.

Thanks again thank you and of course.

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