Apple stock
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Will Apple Buy Facebook? No, But It'll be More than a Friend
It's a question that was getting asked as far back as three years ago, and seems to pop up again every time the Facebook stock price hits another new low: Will Apple buy Facebook?
Some tech pundits think that because Apple (Nasdaq: AAPL) has so much cash -- $117 billion as of the June quarter - and lacks a presence in social media, buying Facebook (Nasdaq: FB) just makes sense.
Those with more level heads think such a move would be a spectacularly bad idea -- and extremely unlikely.
"I can see Microsoft making a stupid decision like this but not Apple - MSFT has a history of overpaying for questionable assets, being late to the game and having lost what truly innovative mojo they had under [CEO Steve] Ballmer's watch," said Money Morning Chief Investment Strategist Keith Fitz-Gerald.
"I think Apple knows that the Facebook model is kaput and that it's not profitable - very similar to Google in that regard, which has held off from really rolling out Google+," Fitz-Gerald added."Shareholders would revolt...and so would the institutional money."
But Apple Chief Executive Officer Tim Cook has strongly hinted at a cozier Apple-Facebook relationship.
Calling Facebook a "great company" at the D10 conference in May, Cook said, "We have great respect for them. I think we can do more with them. Just stay tuned on this one."
Why Apple (Nasdaq: AAPL) Will Not Buy FB
Facebook's shaky business model isn't the only reason Apple would shy away from buying the social media giant.
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Apple Earnings Miss Points to Slowing Growth
Now that the Apple earnings report missed missed Wall Street expectations for the second time in a year, it has some questioning whether the company is finally coming back to earth.
Revenue for Apple Inc.'s (Nasdaq: AAPL) third quarter was $35.2 billion, missing the consensus of $37.1 billion and only showing year-over-year growth of 23.2%. That growth rate was far below the 82% in reported for Q3 2011.
Profit growth slowed as well. Apple earned just $9.32 per share in the June quarter compared to analyst expectations of $10.38. That put Apple's bottom-line growth at 27.5% year over year, little more than a quarter of last year's eye-popping 125%.
Disappointed investors sent AAPL down 5% in after-hours trading.
The Apple earnings miss was driven mostly by lower iPhone sales of 26 million, while analysts had expected 29 million, although Mac sales also were short of expectations.
Several Wall Street analysts had lowered their expectations for iPhone sales in recent weeks, but Apple even missed those reduced numbers.
The bleak news carried over to gross margin as well, which came in at 42.8%, short of the consensus number of 44%.
The only positives were the iPad and iPod. Sales of the iPad were 17 million, beating the consensus of about 15 million. Sales of the iPod, which have been slowing for years, were actually up 10% to 6.8 million.
But it was the bad news that dominated this Apple earnings report.
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How the Apple (Nasdaq: AAPL) iPhone Will Save Millions of Lives-and Make Early Investors a Bundle
It's hard to believe, but it's true. The iPhone turns five years old next week.
Since its official launch on June 29, 2007, Apple Inc. (Nasdaq: AAPL) has sold well over 180 million iPhones. Hands down, it's the most successful mobile phone ever launched.
But what most investors don't realize is the huge impact the iPhone has had on medicine.
The fact is, more than any other product on the planet, the iPhone is driving a whole new sector called mobile healthcare, or mHealth for short.
With an iPhone in hand, it will redefine how doctors and other health-care pros work with their patients.
But here's the big payoff: mHealth promises to save millions of lives as doctors use it to detect and treat diseases much more quickly than they could with old-school devices.
These radical advances will undoubtedly make lots of early mHealth investors quite rich.
But don't take my word for it....
A trade group known as GSMA says the mobile healthcare sector will reach total sales of $23 billion by 2017.
Of course, phones and tablets that use Google Inc.'s (Nasdaq: GOOG) Android operating system also could play a big role in the sector.
But at this point the iPhone remains the clear leader in this rapidly growing market.
It's So Much More Than a Phone
That's why I'm glad to introduce you to a startup firm that has staked much of its future on the iPhone platform.
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Apple Inc. (Nasdaq: AAPL): Winners and Losers from WWDC
When Apple Inc. (Nasdaq: AAPL) announces new products or updates to existing products, it sends shock waves out into the tech world.
Apple's ability to alter the fate of other tech companies was on full display at the June 11 WWDC 2012 keynote.
Apple's enormous revenue - about $160 billion annually and rising - means generous and steady profits for its partners and suppliers. A new deal with Apple often gives a tech company's stock a nice pop.
But it also explains why tech companies dread losing a relationship with Apple.
Investors that may not want to buy Apple often use the Cupertino, CA company's partners as proxies. It can be a profitable strategy, but a risky one - Apple often drops partners with little or no warning.
Apple's announcements at WWDC created a fresh set of winners and losers. Let's have a look at what happened:
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WWDC 2012: Apple (Nasdaq: AAPL) Unveils MacBooks, iOS 6
While the new laptops Apple Inc. (Nasdaq: AAPL) unveiled at WWDC 2012 may draw the most attention, it's the upgrades to its two operating systems that in the long run will mean more to the company's bottom line.
The Worldwide Developers Conference is Apple's annual event aimed at those who write apps for Macs, iPhones and iPads.
WWDC's "grabber" product is the next generation MacBook Pro. This very thin laptop -- 0.71 inches - features the same high-resolution Retina display technology as the iPhone 4s and the third-generation iPad. It adds ports using the new USB 3.0 standard as well as Intel Corp.'s (Nasdaq: INTC) developed Thunderbolt technology.
Of course, all the fancy new bells and whistles come at a price - this fancy new MacBook Pro starts at $2,199.
Apple also unveiled upgrades to the rest of its MacBook line, which were all blessed with Intel's new "Ivy Bridge" chipset in addition to USB 3.0.
The popular MacBook Air also got something unexpected: a $100 price cut on both base models. That puts Apple's cheapest laptop at $999, a clear attempt to better compete with "ultrabooks" - the MacBook Air's Windows PC imitators.
Contrary to rumors, a new Mac Pro desktop did not appear at WWDC 2012. Perhaps the changes are major enough to warrant a separate "Apple event" later in the year.
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Apple's (Nasdaq: AAPL) Patent Wars: This Little-Known Swedish Company is the Key
In a single stroke, Apple Inc. (Nasdaq: AAPL) could gain the upper hand in its seemingly endless patent wars with Samsung Electronics (PINK: SSNLF) and others.
Or the tech giant could blow its chance and wind up paying billions of dollars in licensing fees.
The outcome hinges on how Apple deals with a little-known company based in Sweden.
This micro-cap just happened to file a patent for the "swipe-to-unlock" touchscreen gesture in 2002 - three years before Apple filed its patent.
The company, Neonode (Nasdaq: NEON), received its U.S. patent in January.
Neonode holds a number of touchscreen-related patents that could become decisive in several of Apple's mobile computing patent cases.
Already the "swipe-to-unlock" patent helped Samsung defeat Apple in a recent patent case in the Netherlands. Samsung said the patent, as well as a phone Neonode released in 2005, represented "prior art."
"Apple just shot itself in the foot and all the blood is going to go to NEON," Jim Altucher, managing director of Formula Capital and well-known investor, wrote in a blog post Tuesday evening.
Insiders told The Wall Street Journal in April that Samsung plans to use the Neonode patent in a similar but much more crucial case in San Jose, CA, scheduled for a July trial.
And Altucher added a scarier prospect for Apple.
If Neonode does indeed hold the patent trump card for "swipe-to-unlock," it could gun for a cut of Apple's profits by filing its own patent case.
Should Apple be forced to fork over licensing fees to Neonode, it could cost the Cupertino, CA, company billions of dollars a year.
So far all this sounds like a big mess for AAPL and a big opportunity for its patent war rivals. Not just Samsung, but also for such titans as Google Inc. (Nasdaq: GOOG) and Microsoft Corp. (Nasdaq: MSFT).
Yet if Apple acts boldly, it could gain a crucial advantage on its mobile computing competitors.
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Why Apple Inc. (Nasdaq: AAPL) is Too Rich For the Dow Jones
Assuming the Dow Jones Industrial Average represents the biggest, most influential companies in America, Apple Inc. (Nasdaq: AAPL) easily qualifies.
With its massive market cap, trend-setting products, and global brand recognition, it is easy to argue Apple belongs as much or more than any of the current tech companies in the index.
In fact, Apple has superseded all of them, particularly Hewlett-Packard Co. (NYSE: HPQ) and Microsoft Corp. (Nasdaq: MSFT).
Yet the Dow Jones has ignored Apple while letting far weaker companies like, Bank of America Corp. (NYSE: BAC)and Alcoa Inc. (NYSE: AA) remain.
So what gives?...
In a nutshell, Apple stock is too rich for the Dow Jones Industrial Average.
Because the Dow Jones is price-weighted, Apple's current $565 share price would simply overwhelm the index.
If included, Apple stock would account for about 25% of the Dow Jones. That's more than double the 11.5% of current leader International Business Machines Corp. (NYSE: IBM).
"It wouldn't be the Dow Jones Industrial Average," Nicholas Colas, chief market strategist at ConvergEx Group told the Associated Press. "It would be the Apple Plus Some Other Stuff Index."
In this case, a price move of just 5% in Apple stock could push the DJIA up - or down - about 200 points.
Looking at it another way, had Apple been added to the Dow Jones in 2009 instead of Cisco Systems Inc. (Nasdaq: CSCO), the Dow would now be over 15,000.
That's well above the Oct. 2007 record of 14,164 and 2,500 points higher than where it stands today.
With that kind of heft, it's no wonder the Dow has shunned Apple.
How the Dow Jones Industrial Average Works
But it's not just Apple. Other Dow candidates trade high in the triple digits as well.
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Apple (Nasdaq: AAPL) Patent War with Samsung A Fight No One Wins
Like two mighty monsters in a 1950s sci-fi B-movie, Apple Inc. (Nasdaq: AAPL) and Samsung Electronics Co. (PINK: SSNLF) have locked horns for over a year in an epic patent war neither can win.
Over the past year, the two tech titans have filed dozens of patent infringement lawsuits against each other in 10 countries. Most seek to block the sale of one or more of the other's smartphone and tablet products.
The biggest case, filed in San Jose, CA, is scheduled for a July trial, which U.S. District Judge Lucy Koh is desperate to avoid. (She called the case "cruel and unusual punishment" for the jury.)
Earlier this week Koh ordered the CEOs of both Apple and Samsung to meet in mediation sessions, but nothing came of the meetings.
The mutual stubbornness makes sense when you realize what's at stake.
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