Nike Stock Can't Afford an Apple Surprise

Nike (NYSE: NKE  ) is in good shape heading into Thursday's quarterly report.

Nike stock hit a new all-time high last month, and it's easy to see why. Analysts see Nike growing its earnings per share by 27%, and the athletic footwear and apparel giant has come through with three consecutive quarters of better-than-expected profitability.

Nike can't lose sight of Apple (NASDAQ: AAPL  ) . It's inevitable that Apple will dive into the wearable computing market as early as this holiday season, and a smart watch is a strong possibility. Can Apple put out the iWatch without taking a dent out of Nike's early market share in wearable fitness gadgetry?

In this video, longtime Fool contributor Rick Munarriz explores why Nike needs to keep an eye on Apple, even if Tim Cook sits on Nike's board, and the two companies have a chummy past. An Apple iWatch that's too good can mean bad things for Nike stock.

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  • Report this Comment On June 25, 2013, at 9:51 PM, MrSmith210 wrote:

    I honestly wouldn't be surprised to see Apple publicly include Nike "in" their watch or wearables if they get into that space. No different than talking about an A6 chip or graphics processor, I'd bet, given their relationship and Cook on the board, you'll see Apple include Nike components of some sort. Be it some hardware aspect or software, expect Nike to be "included" in my opinion.

  • Report this Comment On June 25, 2013, at 10:09 PM, DanManners wrote:

    How stupid was Jobs for having Google sitting on Apple's board. This icon made some big blunders along the way. And then Google went and stole everything. Why didn't they just have Edward Snowden on the board.

    But Apple would not want to be seen to be like Google. Apple wants to be seen as better than they are. So it won't hurt Nike. The watch is minor. At least to Nike for what Apple could do for Nike. It would cost them nothing but they can give them so much free exposure. And maybe a piece of the pie. Apples close relationship with Nike will help both companies. That is why one should own Nike too in my opinion.

    Nike and Apple will make the ultimate sports watch. When people can retrieve their messages without being too obvious, they will buy the watch. When they workout they will love the watch. Runners, bikers, GPS, Health feedback. And im sure they will think of a thousand other things. Apps will make it that much more fun. One great app can make a new device.

    Apple has to make that watch as cool as they can. They have to spend money on good marketing and they should promote leading apps as the do transform the product.

    I have been very down on Cook and Apple. For the likes of me I can't believe we will soon be in 2014 and no big iPhone. In my gut I feel nothing will ever come out from these guys. China Mobile deal? Next year! Cheaper iPhone? Next year. Bigger screen? Yes you know.

    But I read that many are expecting Apple's stock to bottom at 360. I have heard these bottom predictions many times on the way down. But assuming they are right and you can get it that cheap. Then do so because after it gets close to that, its going higher. That is just too cheap and if they do one thing to make you think there could be life left under the Apple hood and we hit 500 in a rocketship.

    The stock price is predicting the death of this company when it still makes tens of billions of cash per year. On top of 150 billion in cash or more by now and a ton of cheap money borrowed at rates they could make money relending it out. Would that make more sense than buyouts? If they could net 2% on 60 billion? 1.2 billion per year. And they still have the money.

    Even if Apple does reward us somehow with a trip to 700 and beyond, we will have earned it the hard way. What was supposed to be an easy ride up turned into a nightmare.

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