3 Predictions for Apple in 2013

Apple (NASDAQ: AAPL  ) has fallen out of favor lately. The world's most valuable technology company has become less valuable after seeing its stock lose nearly 28% of its value since peaking three months ago. The Cupertino titan has shown itself to be surprisingly mortal, and analysts and investors who used to gush over the iEverything company are now worried about market share, margins, and passing fancies.

What will 2013 bring? Well, let's check it out. Here are some of my predictions for Apple in the year ahead.

1. Apple will hit new highs.
Apple's stock hit an all-time high of $705.07 in September. Arguing that Apple can reverse the negativity of the past three months in the next 12 months may not seem like much of a forecast, but have you seen the stock chart?

The percentage math is crueler on the way up than on the way down after stocks take a hit. Yes, Apple's stock has fallen 28% since peaking in September, but it will take a 38% climb to get it back there.

The factors weighing on Apple are very real. Google's (NASDAQ: GOOGL  ) Android is already the global platform of choice for smartphones, and that's starting to happen with tablets. However, Apple is too cheap to stay where it is right now if it continues to grow.

Spoiler alert: Apple will continue to grow.

2. Apple's HDTV will hit the market.
Analysts have been talking up an Apple smart television for years, but 2013 is the year it will become a reality.

Forget about this week's Wall Street Journal reports claiming that Apple is in design talks with suppliers. This has been reportedly going on for a long time, and testing designs isn't the same thing as placing a big order. Steve Jobs teased about this before he died, and CEO Tim Cook has been dropping hints lately.

It's easy to blow off TV as not being a game-changer for Apple. These aren't the portable iOS devices that folks will want to replace every year or two. There won't be wireless carriers willing to send hundreds of dollars to Apple to subsidize lower consumer-facing prices. However, portable media players were dead for more than a decade when Apple rolled out the iPod. Smartphones were largely corporate devices until the iPhone. No one took tablets seriously until the iPad.

Apple can -- and probably will -- redefine the TV industry, legitimizing smart televisions in the process.

There was never any rush for Apple to push this through, but now there is, as the market is losing its confidence in the company.

It will happen in 2013.

3. Apple will go back to blowing analyst profit targets away.
There was a stretch of several years where Apple consistently beat Wall Street income estimates. Sometimes it wasn't even close, and that market-thumping trend helped make Apple the biggest star on this side of the millennium.

The recent past hasn't been as kind. Apple has come up short in three of the past five quarters, including its two most recent reports. That is going to have to change if Apple wants to become a market darling again, and it will.

The market sees Microsoft (NASDAQ: MSFT  ) throwing billions at Nokia (NYSE: NOK  ) to make sure Windows Phone is a relevant mobile operating system. It sees Research In Motion (NASDAQ: BBRY  ) gaining buzz for next year's BlackBerry 10 update.

But these are simply distractions. Microsoft and Nokia are two companies whose best days are behind them. Microsoft's market dominance in PC operating systems and Nokia's leadership in old-school feature phones aren't the currencies of choice in their redefined markets.

RIM may be able to hold on to some of its tens of millions of current BlackBerry customers with its updated platform and new phones, but it won't be a match for the established ecosystems that Apple and Google's Android have created. Android is really the only competitor Apple has, and Apple still has room to grow as the high-end player.

Will Apple go 4-for-4 in its four quarters of fiscal 2013? That would be a challenge given its recent 40% success rate over the past five periods, but I predict that Apple will surpass profit forecasts in at least three of the four quarters.

So that's it. Three predictions for Apple in 2013. Feel free to disagree or add your own in the comment box below.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 16, 2012, at 12:33 AM, Techraan wrote:

    Apple may have been in talks with TV manufacturers for years now, but bare in mind, Apple has burned a lot of bridges with several TV manufacturers. Apple doesn't actually manufacture any hardware either, and Apple is about to try and play a game that Samsung has been playing for a very long time.

    Deals will need to be made. Samsung owns lots of TV related patents and so does Sony. I don't think either TV giant will take kindly to Apple slapping their chewed fruit logo on someone's TV, and competing with them.

  • Report this Comment On December 16, 2012, at 4:26 AM, immortald wrote:

    Samsung and Sony may not like Apple slicing into their consumer base but they can do nothing about it. Apple's following is huge. The Apple TVs will bring incredible buzz and new life, but It will be another faulty componet to their company and dissatisfaction will follow, just like the Iphones..

  • Report this Comment On December 16, 2012, at 7:08 AM, sdturbo wrote:

    In my mind "Light is gone ; there is dark and dark

    everywhere". Mr. Steve Jobs was KING of the helm.

    These kids will go down first and learn from their mistakes. Time is against. Not before 2015, AAPL stock still has lot more room to go down before it picks up the life line and start moving up again, In my strong opinion AAPL may touch below $200.00. then rebound will start and will stay between $300-$350.00 for next few years.

    This is opinion only but with GODLY fear only.

  • Report this Comment On December 16, 2012, at 8:13 AM, applefan1 wrote:

    Apple has invested over $2 Billion in Sharp to help save that company and they are about to release their IGZO screen technology, which is supposed to be better than anything currently on the market, if that's their screen technology of choice, then all they need to do is design the case, power supply, tuner, and other electronics to go with it and that's all they would need to do. That isn't a big deal. Obviously apple could also do some sort of joint project where they could supply the guts of a smart TV and OEM it to whatever mfg wanted it. There are two ways they could do this in addition to the $99 Apple TV box they currently have. So basically, Apple could have this as a method for handling various price points since TVs range in price from $200 for the cheapest thing on the planet to over $100K for the most expensive TV on the planet.

  • Report this Comment On December 16, 2012, at 8:18 AM, applefan1 wrote:

    I think Apple stock is getting hit for a variety of reasons, some completely no of their doing. Partly due to Hurricane Sandy and it's impact on Christmas buying season, new tax laws affecting profits on stock, uncertainty with next year's products, misleading informtion regarding Google's success, which I think is partly short lived since they are promoting Pre-iPhone 5 numbers and Google Andrôid lost ground during the Dec quarter in the US and Apple is still rolling out the product in other countries. I think we'll get more valid market share numbers after the March 2013 quarter rather than using Sept 2012 quarter numbers. typical misleading Google hype.

  • Report this Comment On December 16, 2012, at 8:35 AM, applefan1 wrote:

    It all depends on the price range and feature/functionality Apple wants to go after. If they want to go for a Premium line of HD TV's that are 1080p, then they would PROBABLY be going after the Flagship 1080p HDTVs that Sony and Samsung have which are in the $3000 to $5000 price range for 50,55,60, 65 inch sets which are becoming the new sweetspot in terms of screen size. 40inch Premium HDTV's are still around $2500 or so for a top of the line panel with full features. Their $99 box would then be available for those that only want limited functionality for the low to mid level HD TVs which are generally below $2000.

    Apple could also come out with a more feature rich set top box as well to replace Tivo, so they could have DVR capabilities, along with the other features. The product could very well be priced more in the $350 to $600 price range, is my guess.

    It's all what markets Apple wants to go after and what features they want to have.

  • Report this Comment On December 16, 2012, at 9:15 AM, ingr72 wrote:

    I believe all 3 of your predictions will be made ... starting with Apple's January earnings ... which I think will blow away forecasts by far.

    Apple lowered their forecasts and yet are selling their products at soooo many more outlets and retailers .... Investors I don't believe are understanding what exactly Apple did... Apple made buyers of their new products in China make a reservation date to go to their mobile phone co. to buy an Apple product . In doing so they were trying to eliminate the chaotic mess they had during a previous Apple launch .... That's why their were no lines this past Friday in China ... I hope Apple releases their sales figure for China over this past week end ....

  • Report this Comment On December 16, 2012, at 10:56 AM, RoniBrazil wrote:

    I agree.

    Apple will do great in 2013.

    Better if they scrap the TV plans altogether.

    Mr. Cook is greater than Steve Jobs at managing this huge corporation.

    Apple's focus, strategy, tactics, and execution are perfect.

    The stock price is just not tuned with the reality.

  • Report this Comment On December 16, 2012, at 5:34 PM, Foolproof60 wrote:

    I agree with the three predictions, and I will go further.

    Apple's selloff has been strictly related to tax selling. What other as recognized stock has gone up as much in the last 5 years and why not take some profits at a lower tax rate. I say the in anticipation of the stock rising in new year there will be more buyers than sellers for the remainder of 2012 and on Dec. 31 the share price will be higher the the 585 it closed at on Nov.30.

    Also, the stock will break $700 a share again at the end of January after all this will be after Apple announces the earnings of their best quarter ever by far. I am so happy that they are lowering expectations, it will only beat the street consensus by that much more.

    This Monday 12/17 I am buying more Apple call

    options!

  • Report this Comment On December 21, 2012, at 1:37 PM, WineHouse wrote:

    Google has shot up pretty spectacularly too, not just Apple. It's the competition between Google and Apple that needs to be watched carefully. Two possibilities here: either one or the other will prevail, or else -- a surprise newcomer will sweep them both away.

    Hoping it's not that latter possibility, I'm long on both Apple and Google. Of course, I tried that trick years ago with Sirius and XMRadio -- ha ha ha, they competed themselves to financial death, merged, got steamrolled like Roger Rabbits and are only now barely beginning to scrape themselves off the pavement.

    Anyhow, we'll see, won't we?

  • Report this Comment On December 21, 2012, at 2:59 PM, popadukes wrote:

    anyone think Apple might split into two separate companies (to delineate its product line) so its investors can pick which, if not both, entities can be winners?

    Just like Phillip Morris/Altria?

  • Report this Comment On January 11, 2013, at 7:55 PM, Professor2013 wrote:

    I believe AAPL will drop to 400/share in 2013. I heard that from their employees. If it's sign for bankruptcy? I really don't know. Apple if makes TV will get sued by Samsung, LG, Panasonic, Sharp, and others. Because it's square.

  • Report this Comment On January 16, 2013, at 7:20 AM, WineHouse wrote:

    Responding to Professor2013 -- At 400/share, assuming they maintain the dividend on even keel, that's 2.65% yield. AND it's single-digit trailing P/E. Doesn't that sound more like utility companies in the 1980's than high tech in the 21st century? It's not an impossible prediction, but seems to me to be an unlikely one. But then again, "unlikely" seems to be the norm nowadays.

    We'll see.

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