5 Things That Can Propel Apple Back Above $700

Even after a recent rebound off their lows, Apple's (NASDAQ: AAPL  ) shares still trade for about 25% below their all-time high of $705. Could they once again soar to such lofty levels? It's certainly possible, and here are five events that could help that happen in the months ahead.

An iPad Christmas
With the new iPad Air receiving very favorable reviews, a recently released version of the iPad Mini now including an impressive Retina display, and the entry-level iPad Mini now priced at an even more affordable $299, the signs suggest that Apple will enjoy tremendous iPad sales over the upcoming holiday shopping season. In responding to an analyst's question regarding iPad growth rates, Tim Cook stated on Apple's conference call, "I think it's going to be an iPad Christmas." I think he's right, and that should bode well for Apple's stock price.

A deal with China Mobile
Apple plans to double the number of retail stores in China over the next two years in an attempt to boost its distribution and to create more brand awareness. But there's another action Apple can take that would probably have an even more significant impact on Apple's sales in this vital market: reaching a deal with China Mobile (NYSE: CHL  ) to bring the iPhone to its massive network of more than 700 million mobile subscribers. You read that number correctly -- that's more than twice the U.S. population. And while a great many of China Mobile's customers would be unable to afford an iPhone, those who can afford the device can move the needle significantly in terms of Apple's sales in the region and on an overall revenue basis.

Apple's enterprise assault
After gaining a beachhead in the enterprise, or corporate, market segment thanks to the popularity of the iPhone and iPad, Apple is now taking steps to grab even an even bigger share of this massive market. Long dominated by Microsoft (NASDAQ: MSFT  ) and its Windows operating software, the corporate PC market is now in a state of transition, seemingly away from Microsoft-powered PCs and related devices and toward Apple's ecosystem of products. Forrester Research recently reported that 18% of employees said they use an Apple device for work, up from the 3% range just a few years ago. While strong consumer adoption was responsible for most of Apple's initial success in the enterprise space, the tech giant now appears to be beefing up its ranks with more business sales and support personnel to better attract and serve corporate customers. And Apple recently made its Mavericks operating system and iWork suite of productivity software apps available for free for existing users and new owners of its devices, which many have viewed as a direct assault on Microsoft's Windows and Office-based empire. Apple's aggressive moves into the enterprise sector are a major threat to Microsoft and its partners, and a major profit opportunity for Apple and its shareholders.

A dividend boost
Much has been made about Apple's massive share buyback program, and for good reason. Apple has spent billions buying back huge chunks of its shares, which has already reduced Apple's shares outstanding by about 47 million shares, representing 5% of the total shares outstanding before the launch of the repurchase program. Continued share repurchases will boost Apple's earnings per share and probably its share price, as many investors tend to focus on metrics such price-to-earnings multiples. But Apple's massive cash hoard still checks in at more than $140 billion, and with free cash flow of more than $45 billion over the past 12 months,  Apple can easily afford to boost its dividend by 20% or more. Such a move would probably entice income-seeking investors and create excitement around Apple's stock once again.

The Apple TV we've been waiting for
The core of many Apple bears' arguments is that Apple's innovation magic died when Steve Jobs passed away. Probably the best way to prove to critics and investors alike that Apple is still capable of creating game-changing new products is ... to create a game-changing new product. And the most game-changing of them all would be the long-rumored and almost mythical Apple TV. I'm not referring to the Apple TV currently on the market. I'm speaking of the one we've been waiting for that's supposed to completely disrupt the cable television industry. Rumors have been swirling that Apple is attempting to reach deals with content providers that will allow it to offer a premium TV experience that would free viewers from ads and commercials. While the details are still unknown, such a creation would probably meet with strong demand and drive excitement for Apple's ecosystem of products and services, thereby strengthening the Apple halo effect and restoring the shine on Apple's brand.

The Foolish bottom line
Out of the five items I've listed that could drive Apple's share price back above $700, the new Apple TV may be the one for which we wait the longest. But it can't come soon enough. That's because an all-out $2.2 trillion media war over the future of television is being waged that pits cable companies such as Cox, Comcast, and Time Warner against technology giants such as Apple, Google, and Netflix. The Motley Fool's shocking video presentation reveals the secret Steve Jobs took to his grave and explains who the real winners will be. Click here to access this free, special investor alert.


Read/Post Comments (15) | Recommend This Article (16)

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 November 24, 2013, at 9:48 PM, JokerJoey wrote:

    We suspect the China Mobile deal may break as early as Thanskgiving weekend.Stay tuned....

  • Report this Comment On November 24, 2013, at 10:20 PM, DanManners wrote:

    Great positive article but I have to disagree with you.

    1. China Mobile will not be what people think. If it is ever done. This is because most users can't afford an iPhones very high cost in China due to tariffs. Also, China Mobile will have made a deal with Apple that will not be as profitable to Apple as other Carrier deals. Something tells me it never gets done.

    2. No TV. They are saying 2015 now. Bet they will be saying 2016 soon. It will never happen the same way there will be no watch or any other new device.

    3. Cook is the reason the stock will never get higher than where it is now. He is the reason the stock hit 385 and will do so again after earnings misses in January and the rest of 2014.

    4. No big phone. We will not be getting a bigger phone. Cook said Apple had found the right size with the 5s. Also he said there were problems with keeping the same aspect ratio with the screen. Cook won't do it. They would have to have 2 size phones then. Or 3 with the iphone4 still being sold. Look at the new phone he created. The 5c. Another bomb.

    5. Android is constantly taking market share. IT wont be long until Android controls it all and Apple is trying to sell to the highest bidder like Blackberry. Apple has lost and the market will realize this next year. It's return to 700 will be futile and the question will be will it ever get above 400 again. PCLN will be 6 times the price of Apple stock when David Trainer is proven correct and Apple sinks next year to 240.

    6. Margins, EPS, Sales all shrinking.

    7. Wait until the wave of new phones make Apple look old again. Cook can;'t produce the phones in enough supply to sell. Mr. Supply chain always has supply problems.

    8. IOS7 buggy. Iphone fingerprint not working. Ipad mini retina has limited colors. Apple is a premium price for less than premium quality. Hey how is that maps app doing.

    9. Tim Cook has to be the worst CEO of the decade. Like Obama he is teflon with the media but investors know the truth and that is why they are still selling like crazy. With volumes down below 10 million , no one is interested in buying this loser.

    10. Google has prepared a book on how to switch from IOS to Android. They know that most IOS users will switch in 2014 as the Android world starts to break away with value, features and quality. Apple will tank in 2014.

  • Report this Comment On November 24, 2013, at 10:27 PM, dbtuner wrote:

    Dan,

    How much did Samdung pay you to write that drivel?

  • Report this Comment On November 24, 2013, at 11:21 PM, frankhsieh wrote:

    Dan, you are the guy who posted on Sept 24 , 2013 saying you just sold all Apple shares. On that day and days before that day AAPL was less than $490. You certainly missed a quick $45 if you chose to hold it for another 30 days.. I understand that your feeling was very bad and you just wish everything goes wrong with Apple so other shareholders would lose money, which may make you feel little bit happier as you are not alone. But, Dan, you have to eat up your stupidity and that's life. Keeping your single minded bad day dreaming or cursing on Apple isn't going to drag AAPL back to $400...

    Many people like you mix their personal investment loss and emotion with subjective judgement. You are a person who could not make a simple right prediction within 30 days, what's the point for you to tell people what's going to happen in next 12 months ? If you really had loss and hate AAPL, just forget about AAPL and do some hard work to be a smarter investor in the future. Keep venting your emotion here isn't going to help you...

  • Report this Comment On November 24, 2013, at 11:31 PM, frankhsieh wrote:

    On September 30, 2013, at 4:47 AM, DanManners wrote:

    After hitting almost 497 after the 5s Weekend sales were announce last week, Apple is down around $ 20. This is in 4 days. Expect Apple to drop to 440 by the end of this week and from there it will retest 385 as bad news like you just reported never stops coming in.

    ********************************

    Dan, you are a genius who predicted AAPL going to $440 by end of Sept 30, 2013.

    My advice to you --- Don't do stocks and don't even talk stocks. Don't talk about Apple. You don't know anything.

  • Report this Comment On November 25, 2013, at 12:32 AM, frankhsieh wrote:

    Joe, the chance Apple will have deal with China Mobile by this Thanksgiving is less than the chance we get walk on Mars by Thanksgiving. So far the most popular rumor is Dec 18 China Mobile's 4G license activity. People speculate the Apple deal may be announced that time, but it is still rumor.

  • Report this Comment On November 25, 2013, at 12:57 AM, zawnaing wrote:

    Dan, you are probably trying to bring down the stock so maybe you can buy on weakness. But base on what other wrote, you sold the stock right before it went up. It happened to everyone. It is part of the game. If you are long or short, you have rights in saying. But since you have no position in the stock, you shouldn't be trying to bring it down. Apple is one of the a few stocks we follow very, very closely. I don't know all 5 things author mention are true but I do know the new iPhones, iPads air and mini are doing very well which is good enough for the stock. Apple TV will happen it is just matter of when. China deal will be bonus.

  • Report this Comment On November 25, 2013, at 1:24 AM, DanManners wrote:

    As you can tell the posters here are all the same person except me. He posts on Yahoo Apple message boards as many different people. He posts day and night and is very racial. His antisemetic remarks are chilling. He is one nasty individual. He has never posted before because the poster makes up names as he goes along. obviously he posts under other peoples names and then says you look bad.

  • Report this Comment On November 25, 2013, at 7:01 AM, Awebb30 wrote:

    Just shut up already, Dan. WTH?

  • Report this Comment On November 25, 2013, at 7:35 AM, jdmeck wrote:

    I agree Dan is an idiot.

  • Report this Comment On November 25, 2013, at 6:04 PM, Choccoins wrote:

    DanManners wrote: "As you can tell the posters here are all the same person except me."

    You are definitely the same person. That kind of drivel could only come from one individual...

  • Report this Comment On November 26, 2013, at 4:22 AM, CraigWPowell wrote:

    I also like my iPhone and my new iPAD

    but AAPL is not Apple.

    APPL chart tells all 2013 story:

    "Apple Stock Forecast Based On Algorithm: Chart Of Last 12 Months Predictions"

  • Report this Comment On November 26, 2013, at 9:00 AM, larryw101 wrote:

    Dan Manners is shorting Apple and will attack anyone who bullish on the stock …….. period !

  • Report this Comment On November 26, 2013, at 9:15 AM, Mathman6577 wrote:

    @TMFGuardian: Good article and good analysis. Makes sense (and there is a lot of that missing regarding Apple lately).

    And to the commentors: good point about getting paid by Samsung. Several reports out of Taiwan indicate that Samsung is paying bloggers to write negative things about Apple (and not all of it is true).

  • Report this Comment On November 28, 2013, at 8:45 AM, wwt17 wrote:

    wow! what a bunch of crap on this thread. think i'll just go back and read posts on MF PRO where people are respectful and intelligent.

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