Apple Inc. (NASDAQ:AAPL) fell 0.64 percent this past week (from the close of trading Wednesday, July 9, to Wednesday July 16). The stock lagged behind the market as a whole, which rose slightly during the same time period.
Apple and IBM Team Up
The big news of the week is that Apple and IBM announced on Tuesday that they will be forming a partnership that will sell devices, apps, and cloud services to business and government-agency users. Together, the two companies will be creating apps targeted at various industries and putting IBM’s big data on Apple’s iOS devices. The new apps are expected to become available starting this fall.
The partnership should benefit both companies. Apple, which has always focused on individual consumers, hopes to gain from IBM’s long experience serving corporate customers. IBM, in turn, hopes that Apple will give it access to a wider market for its advanced technology tools.
Apple Agrees to Pay $400 Million to Settle E-book Case
Last month, Apple settled a case brought by 33 State Attorneys General, which claimed that Apple and book publishers had unlawfully fixed the price of e-books. On Tuesday, news got out that Apple had agreed to pay $400 million in damages to consumers. Apple, however, is still appealing the original antitrust lawsuit and may not have to pay anything if it wins the appeal.
New Coverage and New Price Targets
Citigroup (NYSE: C) started coverage of AAPL this week, with a “buy” recommendation and a target price of $110. The Citigroup analyst thinks that the demand for the iPhone 6 will exceed expectations because of the phone’s longer battery life, contracts with carriers that encourage upgrades, and larger screens.
Goldman raised its price target from $103 to $107 after Apple and IBM announced their new partnership. Barclays also raised its target, from $95 to $110, and raised its rating to “overweight” from “equal weight” based on its belief that CEO Tim Cook has regained the confidence of Apple stakeholders.