The Motley Fool Previous Page


3 Bold Predictions for Apple in 2014

http://www.fool.com/investing/general/2013/12/31/3-bold-predictions-for-apple-in-2014.aspx

Daniel Sparks
December 31, 2013

It was a big year for Apple (NASDAQ: AAPL) in 2013 -- albeit a fairly predictable one. Importantly, Apple has minimized some worries by proving it can still boost sales on a year-over-year basis and by stabilizing its declining margins. But, unfortunately for investors, the market still isn't giving Apple stock much respect. Has the Street lost faith in Apple's ability to consistently deliver blockbuster products? After all, the rumor mill's iWatch was never unveiled, and the iTV never made its debut.

The market doesn't have big expectations for Apple. Its conservative valuation is evidence. Though it's tough to put a finger on the exact cause for the skepticism about Apple, it is probably fair to say the overall market still isn't sure if Apple can continue to innovate over the long haul without Steve Jobs. And 2013's fairly predictable year probably didn't help.

In 2013, Apple didn't have many surprises for the Street. Not only did Apple not enter any new product categories, but the form factor on most of Apple's products remained mostly unchanged, with two exceptions:

But Apple is going to need to accomplish more than this to earn a price-to-earnings multiple that is more closely aligned with the S&P 500's hefty multiple of 19.

Here are three bold predictions for Cook & Co. that could improve the sentiment toward Apple stock in 2014.

1. Apple will enter a new product category.
In Apple's fourth-quarter earnings call, Apple CEO Tim Cook told investors that Apple plans on introducing new product categories in 2014.

Though there have been rumors that Apple could launch a physical television toward the end of 2014, the alleged Apple smartwatch seems more likely.

2. Apple will launch a larger iPad.
Though it may not have made sense for Apple to introduce a larger iPad several years ago, the growing number of annual tablet sales suggests more consumers are opting to buy tablets as a substitute for laptops. Though a larger tablet may not be for