Apple Inc. (AAPL): Mass Production Of Apple Watch Starting Soon

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December 11, 2014 4:23pm NASDAQ:QQQ NYSE:IWV

apple buzzApple Inc. (NASDAQ:AAPL) lagged a bit behind the overall market this week. For the five trading days ending Dec. 10, 2014, AAPL fell 3.43 percent, while the Dow fell 2.12 percent, and NASDAQ fell 1.87 percent.


There was no bad news this week for Apple besides the resumption of a 10-year-old lawsuit. Sales of the new iPhones are doing great, anticipation about the Apple Watch runs high, and analysts are raising their price targets. Most likely, the drop in AAPL’s price was due to profit taking after AAPL’s big gains earlier this year.

Analysts Raise Price Target for AAPL

On Monday, both Citigroup (NYSE: C) and BMO Capital (NYSE: BMO) raised their price targets on AAPL. Citigroup raised its target from $120 to $135, citing a trend for consumers to buy higher memory devices, which have a higher margin, as well as increased interest in Apple Pay outside of the U.S., and more companies creating iOS apps. BMO raised its target from $113 to $123, based on a belief that Apple is hoarding iPhone 6 supply for its own stores, limiting the supply for third-party sellers.

Rumor: Mass Production of Apple Watch Starting Soon

A Taiwanese newspaper (via 9 to 5 Mac) claimed that Apple will begin mass produced the long-awaited Apple Watch in January 2015, with an initial production run of three to five million watches. Rumors are that the watch will go on sale in the Spring.

More iPhone 6 Plus in the Pipeline

Apple has been ramping up production of its larger-model phone, the iPhone 6 Plus, according to Rosenblatt Securities, which says that the 6 Plus now constitutes almost 50 percent of Apple’s total iPhone production. The larger phones are more profitable for Apple than the regular iPhone 6 devices, as they sell for $100 more, but don’t cost $100 more to make.

Lawsuit Against Apple’s Alleged Music Restrictions Can Go Ahead After All

Last week, a recently revived 10-year-old class-action lawsuit against Apple looked like it might be thrown out of court. The suit claimed that Apple violated antitrust laws by using software on iPods that prevented them from being able to play music bought at competitors’ stores.

The problem last week was that the judge disqualified the one remaining plaintiff, who it turned out hadn’t actually bought an iPod in the time period covered by the lawsuit. That left the case without any plaintiffs — until a woman who read about the case online volunteered to take the disqualified plaintiff’s place.

Apple claims that the software was necessary to prevent copyright theft. If Apple loses the case, it could conceivably have to pay over $1 billion to the eight million consumers who would be affected by the ruling.

iShares Russell 3000 — IWV

If you would like exposure to AAPL while adding more diversity to your portfolio, consider the IWV ETF, which invests in the 3,000 largest U.S. stocks. IWV has 3.01 percent of its holdings in AAPL.

By Diana Primavera, ETF Daily News


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