How Apple Got Its Mojo Back

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With the share price near $600 following an exceptionally strong fiscal second-quarter, it looks as if Apple (AAPL) has its mojo back.

Cantor Fitzgerald analyst Brian White notes in his Apple Barometer that preliminary April sales are coming in stronger than the company has seen historically. The Apple Barometer consists of some of Apple's Taiwan-based suppliers that generate a healthy percentage of Apple-related sales, so they are seen as a good proxy for what Apple is doing. White noted that preliminary April sales are up 7% month over month, much stronger than the average decline of 1% over the past nine years. "With Apple's March quarter results out of the way a couple of weeks ago and WWDC [Worldwide Developer Conference] on the horizon in June, we believe more investors will be getting more actively involved with the name ahead of this product cycle during what we have dubbed as the 'Year of Innovation,'" White wrote in the note.

This comes after Apple reported fiscal second-quarter earnings that blew past Wall Street estimates, showing the strength of the iPhone around the world. The company earned $11.62 a share, generating $45.6 billion in revenue. Leading the way were the 43.7 million iPhones shipped, helped by the shipment of 16.4 million iPads and 4.1 million Macs during the quarter.


Apple is working diligently on increasing sales of all of its products, and it appears that consumers are responding, judging by White's Apple Barometer. This comes as Apple is reportedly planning a massive promotion to give the iPhone a boost in the U.S. ahead of a seasonally slow period, as it emails customers eligible for an iPhone upgrade to come to Apple Retail Stores.

Despite the high price of the iPhone compared to other smartphones (most of them running Google's Android operating system), CEO Tim Cook noted that it's making significant gains: "We gained smartphone share in many developed and emerging markets including the U.S., the UK, Japan, Canada, Germany, France, Vietnam and Greater China, just to mention a few. In fact, we established a new all-time record for total iPhone sales in the BRIC countries."

Apple isn't just sitting on its laurels, allowing existing products to continue to play the lead role. Apple is widely expected to unveil a new iPhone later this year, perhaps as early as September. Reports have suggested it will come in two sizes, a 4.7-inch version, and a 5.5-inch version, and may have a radical redesign compared to previous iPhone models, coming in much thinner than its predecessors.

Then there's the recent MacBook Air update. Though Apple didn't do much to change the computer, only adding Intel's Haswell processors, it did make one major move. It cut $100 off the starting price of the previous models. The 11-inch model will set you back $899, and the 13-inch version starts at $999. Given that the PC market is continuing to slow down, thanks to the growth of the tablet market, and consumer dollars going elsewhere, a price cut for a company that has grown PC market share for the past 31 of 32 quarters can only be a good thing, as long as it doesn't impact the company's famously high gross margins.

Apple sold 4.1 million Macs during the fiscal second-quarter, accounting for $5.5 billion worth of sales. Apple sold 5% more Macs year over year, leading to a 1% boost in revenue, and the price cut should only help benefit Apple in the quarters to come.

Couple these small, but very important moves to get Apple devices in the hands of more consumers with the upcoming product refreshes and the long-awaited iWatch, and you can see why Apple has its mojo back. And for investors who've seen other technology stocks come crashing back down to Earth, not a moment too soon.

  • This slideshow takes a look at some of the most significant Apple products over the years. This focuses on 

hardware products, and is by no means all-encompassing, but shows how innovative the company has been, and continues to be. Photo: 

Shutterstock
  • Apple was established on April 1, 1976 by Steve Jobs, 

Steve Wozniak, and Ronald Wayne. Pictured is Jobs standing front of an image of a him with Wozniak during the early days. <a 

href='https://www.flickr.com/photos/mateus27_24-25/6231185527'>Photo: MATEUS_27:24&25</>
  • The Apple I is Apple's first product, a computer designed and built by Steve Wozniak. Photo shows an Apple 

I on display in the Smithsonian. <a href='https://www.flickr.com/photos/euthman/281712899'>Photo: Ed Uthman</>
  • The Apple II, also invented by Steve Wozniak, was introduced on April 16, 1977. Its success helped 

establish Apple as a personal computer company. <a href='https://www.flickr.com/photos/aloha75/4448501489'>Photo: Sam Howitz</>
  • The Macintosh was a watershed moment for Apple. It was the first mass-market personal computer with a 

graphical user interface and a mouse. It was introduced by the famous '1984' Super Bowl commercial. However, for Steve Jobs, the success was 

short-lived as he resigned from the company the following year, after a power struggle. <a 

href='https://www.flickr.com/photos/48126477@N05/6907511419'>Photo: Matthew Pearce</>
  • The Power Macintosh became one of Apple's premiere products, featuring PowerPC 

microprocessors. These computers formed the foundation of a series of more high-end computers, including the PowerMac G3, PowerMac Cube, and 

the PowerMac G5. <a href='https://www.flickr.com/photos/mujitra/13981566927'>Photo: MIKI Yoshihito</>
  • Steve Jobs returned to Apple in 1996, became the interim CEO in 1997, and was part of a new 

wave of Apple products, which included the iMac G3 (seen on the left) and the G4 (seen on the right). The iMac was an all-in-one computer 

featuring a unique design (different colored shells were available). <a href='https://www.flickr.com/photos/goron/65984532'>Photo: Adrian 

Milliner</>
  • Inspired by the popularity of the iMac G3, the iBook's clamshell design became a signature look. It was 

marketed as an 'iMac to go.' It quickly became a commercial success for Apple. <a 

href='https://www.flickr.com/photos/mac_users_guide/4051644247'>Photo: Carl Berkeley</>
  • The iPod was launched in 2001, and then became a commercial success by October 2004, becoming the dominant 

digital music player. The iPod has become a signature product, leading to the ubiquitous sight of white earbuds wherever people look. <a 

href='https://www.flickr.com/photos/mcwetboy/337818004'>Photo: Jonathan Crowe</>
  • The MacBook Pro is notable for its usage of Intel Core CPUs instead of PowerPC chips, and became a 

critically acclaimed laptop. The MacBook Pro line continues to this day. <a 

href='https://www.flickr.com/photos/mac_users_guide/4028196851'>Photo: Carl Berkeley</>
  • During Steve Jobs' keynote speech, he announced that computers were no longer the main focus of the 

company. Instead, they would turn their attention to mobile devices. The iPhone has been nothing short of revolutionary. Smartphones existed 

before it, but nothing like this. Now people had the power of a computer in the palm of their hand. <a 

href='https://www.flickr.com/photos/ari/681976999'>Photo: Steve Rhodes</>
  • The MacBook Air is an ultra-portable laptop, one that is designed to be extremely lightweight and 

still powerful. <a href='https://www.flickr.com/photos/pahudson/5127790085'>Photo: Paul Hudson</>
  • The first iPad was released in April of 2010, and is easily the most successful tablet Apple has made. The 

company had attempted to make tablets before, but each attempt never quite took off. That changed with the iPad, which reached 3 million sales 

after 80 days. <a href='https://www.flickr.com/photos/brraveheart/4487967665'>Photo: Brave Heart</>
  • Steve Jobs passed away in 2011, and now the company is led by CEO Tim Cook. Apple recently launched large 

iPhones and the iWatch. Where will they go next? <a href='https://www.flickr.com/photos/deerkoski/7178643521'>Photo: Mike 

Deerkoski</>


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: News Headlines , Technology , Business , Stocks

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Chris Ciaccia

Chris Ciaccia

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