Apple faces new challenges that range from impatient investors who want to be wowed by the next new thing every couple of months, to a potentially game-changing patent battle with China’s State Intellectual Property Office.
Apple Inc. (NASDAQDS: AAPL) share price continues to slide, closing at $ 517.35, down $4.71 cents, from the previous day’s close of $522.06, on a volume of 9,875,898, below it three-month average volume of 12,821,521 shares.
This comes at a time when a new report by Morgan Stanley found that Apple stock's institutional ownership is at its lowest level since 2009.
Analysts’ Consensus Changing
Meanwhile, Apple’s short-term poor performance has not gone unnoticed by the analysts that cover it.
Two weeks ago, of the 35 analysts that cover Apple, 24 recommend a “strong buy,” 4 recommend a “buy” and 7 recommend a “hold.” As of Feb. 27, now only 20 recommend a “strong buy, 6 recommend a “buy” and 9 recommend a hold.
The problem facing Apple is that analysts and some stockholders want to be dazzled by the “next new thing” in Apple’s magic product bag before the company is ready to deliver. In addition, a background mantra has been growing louder which says Apple is no longer as creative as it once was because current CEO Tim Cook is no Steve Jobs, the late founder of the tech giant. Yet, Apple is creative enough to try and design a hitherto unknown battery technology to power its soon-to-be-released smartwatch.
New Products Growing
It’s only been a few months ago since Apple unveiled its one-pound iPad air and well-received Macbook Pro. As we have reported the company is also talking about releasing a smartwatch and a new iPhone with a larger screen that when released will probably spark winding lines around every Apple store on this planet.
Meanwhile, Apple’s massive selling infrastructure, capable of selling apps, eBooks and iTunes has massive room for expansion while others try to reinvent Apple. And don’t forget, its chief rival Samsung is still reeling from recent patent infringement court cases it lost against Apple.
Suing China over Siri Patent
Meanwhile, Apple filed a lawsuit this week suing the Chinese State Intellectual Property Office and software developer Shanghai Zhizhen Network Technology over its “Siri” patent, the intelligent personal assistant app that uses a natural-language user interface. This legal faceoff has been brewing since 2004 when the Chinese accused Apple of copying its “Xiao I Robot,” patented in 2004, in Apple’s development of Siri.
While this may seem like no big deal to the casual observer, if Apple loses the lawsuit and begins to believe the Chinese government will sanction the stealing of its patents, it might be only a matter of time before Apple follows Google’s example and abandons it operations in China. Hypothetically, this could lead to moving thousands of jobs from China to another country.
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Yahoo! Expands Its Reach
Yahoo! Inc. (NASDAQ: YHOO) share value has been holding its own lately based on the company’s investment into creating strong original content and developing ways to expand its distribution and brand.
App Expands News Digest to UK
In a recent announcement the search-engine giant said Yahoo News Digest app will now be available for people living in the United Kingdom The service will be available to readers twice a day and will deliver curated content based on a myriad of sources.
Wants to Develop Mobile Phone Assistant
In addition, Yahoo revealed last week that it offered a $10 million grant towards a Carnegie Mellon University project named InMind. The project’s goal is to design an assistant-like service for mobile devices, similar to Apple’s Siri.
The 37 analysts covering Yahoo are pretty evenly divided. Eleven of them recommend a “strong buy,” 3 recommend a “buy” and 13 of them recommend a “hold.”
On Feb. 26, YHOO’s share price closed at, $37.62 down up 36 cents from its closing price of $37.26 the previous day on volume of 15,782,073 shares.
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Still Riding Wave of Solid Fourth-Quarter and 2013 Earnings
Sirius XM Holdings Inc. (NASDAQ: SIRI) share price continues to nudge upwards, with little good or bad news being circulated about the company.
The company generated record revenue of $1.0 billion and $3.8 billion in the fourth quarter and full-year, respectively, each up 12%. Net income for the fourth quarter and full-year were $65 million and $377 million, respectively, or $0.01 and $0.06 per diluted common share, respectively.
Income from operations was $245 million and $1.0 billion in the fourth quarter and full-year 2013, respectively. Adjusted EBITDA increased 41% in the fourth quarter to a record $326 million. Full-year 2013 adjusted EBITDA was $1.17 billion, an increase of 27% from $920 million in 2012.
Potential Lawsuits Not Hurting SIRI
Despite a myriad of law-firm of Sirius XM for potential stockholder claims as a result of the satellite-radio investigations company’s proposed acquisition by Liberty Media Corp., its stock price is holding its own.
On Jan. 3, 2014, Liberty Media make an offer to buy Sirius for about $10.4 billion at a rate of $3.68 per share. The deal involves creating a new class of stock called Series C, adding 0.076 per share to give the company a total market value of as much as $27 billion.
Although the pending acquisition has triggered a slew of potential stockholder lawsuits, without Liberty Media, Sirius XM might not have been here today.
That’s because in 2009, Liberty Media kept Sirius XM from going bankrupt with a $530 million loan. As a result, Sirius XM has been able to build a subscriber base 25.6 million strong. It’s done so with a line-up of paid-radio choices including classical, rock, alternative, country, sports and live concerts, including the extremely-popular morning man Howard Stern serving as the company’s anchor. Moreover, having new cars equipped with XM receivers has also boosted the company’s popularity and acceptability. However, Sirius XM still faces brutal competition from such digital radio competitors as Pandora Media Inc., AOLRadio and Apple Inc.
On Feb. 26, SIRI’s share price closed at $3.57, down 1 cent from its closing price of $3.56 the previous day on volume of 28,312,572 shares.
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