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01-29-2013, 03:57 AM #1
Analyst Says Current AAPL Stock Price Doesn't Reflect iOS "Stickiness"
Although Apple’s recent stock woes have been driven by investor concerns over the company’s slow growth, one analyst believes the current stock price doesn’t reflect the “stickiness” that will cause existing customers to stay with Apple. Chris Whitmore of Deutsche Bank ended up maintaining his “buy” rating for AAPL stock because he believes existing Apple customers will remain loyal to the company’s platform. This means customers are likely to upgrade to new Apple hardware in the future.
Whitmore also believes that Apple will continue to grow its user base, increasing shareholder value as more customers become tied in to the ecosystem. He believes that beyond apps, Apple-only features such as iMessage and FaceTime also increase the “stickiness” of iOS. Whitmore said the following regarding the topic:
The key underpinning of this view is the stickiness of the iOS platform and the substantial and growing investment (both time and money) Apple users place in it. Although the U.S. phone market is well penetrated, we see substantial opportunity for Apple to grow its user base in emerging markets and further monetize existing iOS users through the living room (Apple TV, additional content, etc.).
The Deutsche Bank ended up reiterating its “buy” rating for AAPL stock with a price tag of $575.
01-29-2013, 05:12 AM #2
Even if the platform is "sticky" it's still reflected directly in number of iOS devices sold, which analysts consider when they set the target. At least I hope they do.