Apple Starts the Year With a Bang

After ending last year with a bang, Apple (NASDAQ: AAPL  ) is kicking off the new year in similar fashion. For the record, the Mac maker closed out 2012 with a 29.4% gain. That still qualifies as handily outperforming the broader market, even if shares gave up most of their gains in the final quarter of the year.

AAPL Chart

AAPL data by YCharts.

Thanks to a fiscal cliff deal that's sparking a broader rally, Apple was enjoying gains upwards of nearly $23, or 4.3%, at today's high. There weren't a lot of company-specific headlines driving Apple bulls today, but let's look at what was making the rounds today.

Stop me if you've heard this one before
A fresh batch of rumors that Apple is preparing to move chip production to Taiwan Semiconductor (NYSE: TSM  ) made the rounds. The speculation has persisted for years without materializing yet, but investors continue to get closer to it becoming a reality. TSMC is said to be running production trials for the A6X chip found in the fourth-generation iPad starting this quarter.

Apple has been slowing moving away from Samsung as a supplier wherever possible, and few ingredients are as important as the applications processor. However, transitioning chip production is no easy task, and it could easily take upwards of 18 months to complete.

Another interesting possibility that's been discussed lately is Intel (NASDAQ: INTC  ) opening up its foundries to Apple, which would be ironic since it would be building ARM-based  (NASDAQ: ARMH  )  chips. Departing Intel CEO Paul Otellini recently said the company would consider expanding its foundry business for certain customers under specific conditions, a clear reference to Apple. However, Otellini made it clear that Chipzilla has no intention of competing with or becoming the next Taiwan Semiconductor.

An App Store by any other name
A U.S. District Judge has dismissed Apple's suit against Amazon.com (NASDAQ: AMZN  ) over its usage of "Appstore." In March 2011, the Mac maker sued the e-tail giant over the term, since it owns the "App Store" trademark. Amazon's response was to use "Appstore" (one word) instead of "App Store" (two words) for its Android app repository.

According to Bloomberg, the judge found "no support for the proposition that Amazon has expressly or impliedly communicated that its Appstore for Android possesses the characteristics and qualities that the public has come to expect from the Apple APP Store and/or Apple products."

What's more important for Amazon than what it calls its storefront is continuing to grow its app count, as it still offers significantly less apps than Google (NASDAQ: GOOGL  ) Play.

Too soon?
Topeka Capital Markets analyst Brian White offered histhropinion that Apple may launch its next "iPhone 5S" with a wider range of colors and additional screen sizes. One particularly interesting tidbit is that White believes the new device will launch in either May or June.

Apple's product cycles have become less predictable in recent years, as the iPhone 4S and iPhone 5 were both launched in the falls of 2011 and 2012, respectively. Before those models, new iPhones were always unveiled at Apple's Worldwide Developer Conference, or WWDC, in June. A June launch would be a nine-month product cycle after the last launch in September.

Party like it's 2013
We're now in January, which also means that Apple's fiscal first quarter earnings release is just weeks away. Apple has yet to announce the official date, but it will be about three to four weeks from now, so investors need to stay tuned.

Investors can count on Apple posting record revenue in the quarter, with its own guidance calling for $52 billion in sales (topping the previous record first quarter with $46.3 billion in revenue). What's less clear is how the bottom line will fare, since guidance predicts negative earnings growth since the company is starting at the high end of numerous product cost curves. Even if the bottom line shrinks a little, it would only be a cyclical consequence of redesigning so many products at the same time, and not a structural trend that's here to stay.

Investors have a lot to look forward to in 2013.

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Read/Post Comments (5) | Recommend This Article (3)

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 January 03, 2013, at 1:14 AM, dwilh51183 wrote:

    AAPLE IS JUST GETTING STARTED. Heading to 815 after their earnings report, which will sound like this. TODAY APPLE REPORTED EARNINGS OF $75 BILLION, WITH 82 MILLION IPHONE'S SOLD, 3 billion apps downloaded this qtr, iTunes sales up44%, 40 MILLION IPAD MINI'S SOLD, 20 MILLION IPAD 3-4 SALES ,30% INCREASE IN MAC'S AND....you get the story.

    if you think AAPL is going down, SHORT THE STOCK, BUT YOU WILL LOSE YOUR ASS.AAPL stores were packed the past 3 month's and those customers were BUYING!!...WHICH is what you should be doing with aapl stock

  • Report this Comment On January 03, 2013, at 9:13 AM, pondee619 wrote:

    What does " histhropinion" mean?

    As in: "Topeka Capital Markets analyst Brian White offered histhropinion that Apple may launch its next "iPhone 5S" with a wider range of colors and additional screen sizes".

    thank you

  • Report this Comment On January 03, 2013, at 9:15 AM, pondee619 wrote:

    What does " histhropinion" mean?

    As in: "Topeka Capital Markets analyst Brian White offered histhropinion that Apple may launch its next "iPhone 5S" with a wider range of colors and additional screen sizes"

    Thank you:

  • Report this Comment On January 03, 2013, at 12:56 PM, wdeyan wrote:

    " histhropinion" should be his opinion. i think it was a typo.

  • Report this Comment On January 05, 2013, at 5:02 PM, stocksonaut wrote:

    In my view the smartphone space is over saturated at least in the US. Though there is room for expansion in other countries like China and India.

    Apple and Google would likely head towards gadgetizing other devices we use such as watches, TVs, Shades/glasses etc.

    Watches would become "smart watches" which would monitor your activity, sleep, energy you burn etc. Watches that would be able to alert emergency services based on your pulse, BP etc.

    There is plenty of room of expansion and growth for tech companies like AAPL, GOOG.

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