Market Update – A few thoughts on Apple

By Emerging Money>,

Shutterstock photo

 A few thoughts on Apple ( AAPL , quote ) and for a few additional thoughts surrounding the deal be sure to check out my tweets ( @timseymour ) from last night.

[caption id="attachment_58439" align="alignright" width="300"] Image courtesy Global X: The Apple store in Shanghai[/caption]

Apple will open around $567, +3% from Fridays close.  The stock needs to take this good news through $575 quickly or it will fade. There is heavy congestion from the December 5 $575 6 month high right at this level where it will open.

Why could it fade?

Well because to move Apple's stock you need more than the expectation that accessing China will be the next level of growth.

You need real institutional follow through in the name to move $500 billion in market cap, which in turn may need to see real sales numbers and growing market share.

Apple is a distant 4th in the China handset race.  And let's be clear, Apple has already had access to roughly 450 million subscribers already in China via China Telecom ( CHA , quote ) and Unicom ( CHU , quote ).

Already this is a greater number of subs than the entire US market.  Clearly there have been limitations to the Apple offering for these other major players.

Underwriting the Apple hardware has been an expensive proposition and has been a loss leader for the other Chinese operators. Here are some core numbers related to the deal and how Wall Streets top analysts view the impact:

-       Sales begin Jan 17th ( in time for Chinese New Year's) …Giddy-UP

-       Can pre-register for iPhone starting Dec 25tth

-       China Mobile has approx. 181m "3G or better" subs currently

-       Street seems to be somewhere between 12-24m annual shipments and 4-7% EPS boost

-       Seasonally weak March qtr. may include China mobile ramp after seasonally best qtr.

-       Diminishes shorter term bearish technical set-up in moving averages

-       Street says Apple should trade between 12-15X '14 EPS of around $45-60 share

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

This article appears in: Investing , Stocks
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