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Old 10-03-2011, 10:10 PM   Nav to Top  #1
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Money iPhone 5 Being Released Soon!

All I want for Christmas is the iPhone 5, is going to be heard billions of times by parents in the next couple months by millions of children. Apple is doing something it has not done before and launch its new iPhone 5 in the fall right before the holiday season. To me this is a tremendous move. Historically Apple has launched its new product releases earlier in the year with the iPhone 4 launching last June. With the new positioning in the fourth quarter, I feel production is going to have a difficult time keeping up with demand this holiday season. That to me means the company is going to have a record quarter due to the timing of the iPhone 5 release.

Pent Up Demand for the iPhone 5
The iPhone 5 is going to have huge demand because it has been 15 months since the last release. iPhone owners have become more like a cult than anything so I expect 75% of all iPhone 4 users will want the new iPhone 5 instantly. That adds up to a large number who are all going to pay most likely $299 or $399 for the first ones. On top of that, they are releasing the iPhone 5 in October since they are most likly announcing it on Tuesday after invitations went out for a media event at its Cupertino office with "Lets Talk iPhone" as the message. The marketing team has done a great job with promoting this new device in a time when Tim Cook has taken the CEO reins from iconic Steve Jobs. This amazing marketing of the iPhone 5 combined with the new product improvements will lead to a record quarter for the company. Last year, Apple sold 16.2 million iPhones in the fourth quarter holiday season, which will be dwarfed by this quarter. The fun questions is how much will it be dwarfed by the release of the iPhone 5? Let's throw out a round number to do easy math. Let's say Apple sells 25 million iPhone 5 phones and the average selling price is $300 (I am guessing $399 as release price, but want to be conservative). That translates into $7.5 billion in just iPhone 5 sales. With this massive number I expect the iPhone 5 sales will lead the company to a record quarter in combination with large revenue targets in its other hot product offerings.

What is New in the iPhone 5
The iPhone 5 is being projected by analysts of not being very different on the outside but very different on the inside. Analyst say it might be slightly thinner and have a slightly bigger screen, but that is not what has added to the pent up demand. What is fueling all the talk is the changes made inside the new iPhone 5. The phone will have a new operating system in its new iOS 5. The new iPhone 5 will have wireless device setup and content syncing. It will also have a better camera, email and web browsing apps. A new service called iMessages will allow iOS 5 users to send text messages to each other over Wi-Fi or wireless carriers' data networks, while a folder called Newsstand will keep all newspapers and magazine media in one place making it easier to find them. Also in the new iPhone 5 there is expected to be the new iCloudservice which will should store content such as music, documents, apps and photos on Apple servers and let you access them on numerous devices. The iPhone 5 is expected to also have a new camera with at least 8 mega-pixels since there are other smart phones with this while the previous iPhone only had 5 mega-pixels. Internally, the new iPhone 5 is going to have a much more powerful processor. It will be getting the same processor used in the current iPad 2 while the old iPhone used the previous version of the processor. This will help the phone with gaming and multitasking; which has been a constant complaint of users, as well as add voice recognition which is already on most Google Android phones.

Regardless if you love the iPhone or hate it, I recommend watching Apple stock because they will be much higher 12 months from now regardless of what happens to Europe. The company is releasing its new iPhone 5 and has other new product releases in both its iPad and MAC very soon. This will spark accelerated growth in sales for the next couple quarters at minimum making this stock cheap. Another cheap names to watch because of the new iPhone is Cirrus Logic which is now trading at very attractive valuations and has Apple as its biggest client. If you want a play off the new iPhone 5 release would be via one of the carriers AT&T or Verizon. Both of these have a delicious yield over 6% to make you sleep better at night in this volatile market. Is the current market trading on fundamentals? Hell NO! It is trading on sheer uncertainty which means the selling will not stop until the debt fears of Europe and Greece are contained. I am looking for Apple to go to 350 range before adding more, but it will be a steal if it gets there. Apple is going to be much higher 12 months from now than its current $374 a share price. This is going to be kicked off by the catalyst of the new iPhone 5 launch right before Christmas and the holiday seasons!


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