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APPLE WILL BE entering two major markets over the next five years which will make the company more profitable: television sets and automobiles.
Carl Icahn, an activist investor who has a significant stake in Apple, said in an open letter to Apple CEO Tim Cook that it was “poised to enter and, in our view, dominate two new categories” the television market next year and the automobile market by 2020.
Talk of Apple entering the automobile market with its own set of electric cars started back in February, and it’s believed that 200 people are working on the project.
Rumours of Apple entering the television market have been around for years and Icahn believes the company will start selling 55-inch and 65-inch ultra high definition television sets by 2016. The sets, he believes, will be sold at an average price of $1,500.
As for cars, he believes that it’s a good time for Apple to enter the industry as the technology behind self-driving cars continues to improve.
As autonomous driving would release drivers’ attention from the activity of driving and navigating, and perhaps even increase the time people actually want to spend inside a car, both an automobile and the services provided therein become even more strategically compelling.
While Apple currently addresses this market with CarPlay, it seems logical that Apple would view the car itself as a (sic) the ultimate mobile device to which it could bring its peerless track record of marrying superior industrial design with software and services, along with its globally admired brand, and offer consumers an overall automobile experience that not only changes the world but also adds a robust vertical to the Apple ecosystem.
And for Apple, the car market is more than big enough to “move the needle” significantly, even as the world’s largest company.
Icahn’s letter to Cook was in relation to Apple’s share price and how he believes the company is currently undervalued at $1 trillion.
He praised Cook and Apple’s management team for “impressive operational performance and growth… despite several foreign exchange headwinds and massive growth in investment (in both R&D and SG&A), the company will still grow earnings by 40% this year, according to our forecast.”
He believes that shares should be worth $240 now instead of its current value of $130.04. If shares reached this value, it would mean Apple would be worth nearly $1.5 trillion.
“It is our belief that large institutional investors, Wall Street analysts and the news media alike continue to misunderstand Apple… Collectively, these failures have caused Apple’s earnings multiple to stay irrationally discounted, in our view,” said Icahn in his letter.
Apple has clearly demonstrated a track record of excellence and success when entering new categories. We expect this to continue with the Apple Watch, the television, and the car, and the world will look back on today’s undervaluation as a fascinating example of market inefficiency (and likewise on our valuation at 18x earnings per share as conservative).
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Fast forward 3 months…
One of apples biggest investors sells off shares in stock after it’s sharp increase in value over the last few months…
Bingo.
Trillion dollars and under valued is it? I got six pink ladies, the classiest of all apples, for 3 quid in Lidl.
“Everyone has to pay their taxes !” – Enda Kenny.
Please ignore the above comment if you are in the E.S.B. ..
“I’ll look after ya !” Enda Kenny.
I’m no big fan of Kenny ,but man Hermes you need to take a break. Your on, these boards morning noon and night on all sorts of topics sounding off about him. Give the keyboard a rest Hermes and pick up a hobby or something. And while ur at it do the decent thing and put up ur photo instead of hiding behind your egg avatar. It may be just me but I find it hard to take you seriously
Hermes IS Enda.
The messer…
I am providing my own alibi – When ye catch me I can always say I told ye – so it’s your own fault ..
And ye think I’m as stupid as I said I was …
How did you know Jim ?
“Vote Fine Gael – For Hope !”
Man with extensive interest in company believes company is worth more than it is currently valued.
In other news, Turkeys have voted against Christmas.
Apple are overrated.
A trillion dollar understatement.
Investor said that the company he invested in is undervalued under 1 trillion usd so folly speculators may think it’s good time to invest in apple so the guy can sell his shares with hudge profit before somebody realises it was actually overvalued.
The Street are slowly realising that the new watch is rather rubbish and not another iPhone/iPad; when that fully dawns then the longer term worries about growing a trillion dollar company will deepen.
The shares are worth what investors are willing to pay not what this clown feels they should be worth.
But if new monay has been printed and people can borrow to invest then of course the share will go up …
- I’d say – I wonder who I should listen to about share advice and the value of this company ?
Of course he’s gonna say that …kerr-ching!!!
Wonder what Waterford Whispers will say abt this
Got this one worked out, he put an extra 0 on the valuation instead of the Apple TV, relax investors false alarm!
Is the fact the guys name is ‘Icahn’ not a give away it’s an obvious apple plant ( no pun intended, whilst tongue firmly in cheek)
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