The team at J.P. Morgan believe that evidence points to Apple releasing a converged iOS/OSX product in the second half of this year that would provide users with an alternative to the MacBook line and potentially drive iOS device share gains. Combining the two operating systems could potentially create some powerful new products for a company sorely needing to hit a new home run. The analysts also expect a new class of peripherals to enable users to use iOS products as desktop personal computers (PCs) as well. That could also be a big game changer.
Even though the Android operating system dominates the installed base of handsets, Apple dominates application (apps) store revenue. They will look to protect and expand that lead in the iAnywhere world. The J.P. Morgan report centers also on the companies that may either benefit from the new Apple convergence or could lose some share as a result.
Apple Inc. (NASDAQ: AAPL) is a stock to buy at J.P. Morgan. In addition to the iAnywhere thesis, the company sees positive changes to the iPhone 6, as well as other changes and products that will help drive sales for the tech giant going forward. Apple pays shareholders a 2.3% dividend. The J.P. Morgan price target is $585. The Thomson/First Call estimate is $585.09. Apple closed Tuesday at $535.96.
BlackBerry Ltd. (NASDAQ: BBRY) has had well-documented problems for what seems to be years. Things could get worse if the Apple iAnywhere convergence becomes a reality. The converged platform may offer the kind of security the BlackBerry users require. J.P. Morgan has a Neutral rating on the stock and no price target. The consensus target is $7.24. BlackBerry closed Tuesday at $9.80.
Broadcom Corp. (NASDAQ: BRCM) is a stock to buy at J.P. Morgan. The company missed its initial LTE product launch deadlines. However, it also acquired Renesas with a working LTE chip as well as an industry leading base band design team. LTE chips with advanced capability could play a part in the overall convergence. Investors are paid a 1.6% dividend. The J.P. Morgan price target is $39, and the consensus is at $32.34. Broadcom closed Tuesday at $30.82.
Corning Inc. (NYSE: GLW) may be a winner if touch applications come to laptops. The analysts feel that should this occur, the company could see a small earnings per share uplift and potentially a larger sentiment uplift associated with an iAnywhere roll-out. Shareholders are paid a 2.2% dividend. J.P. Morgan has a Neutral rating on the stock and a $16.50 price target. The consensus target is $18.90. Corning closed Tuesday at $18.80.
Qualcomm Inc. (NASDAQ: QCOM) is a company that despite its current dominance, could see a negative impact if the iAnywhere products materialize. The J.P. Morgan analysts see a potential market share shift in Apple’s favor driven by iAnywhere as a potential negative for Qualcomm, given lower chip content in iPhones and a lower basis for royalty calculation. Investors are paid a 1.9% dividend. J.P. Morgan has a Neutral rating on the stock and a $65 price target. The consensus figure is posted at $79.68. Qualcomm closed Tuesday at $75.62.
Currently, many people carry with them a smartphone, tablet and laptop. The logical step forward is to try to merge the three. With so many application aspects to be handled, the market for ancillary products to be used in the new iAnywhere world could be huge. Also, Wall Street’s love affair with Apple is starting to lose some of the romance. The company has not had a new product introduction in years, and it is seeing some evidence of critical mass being hit in its current offerings. While Apple still has huge sales possibilities with current products, the world is ready for a huge new splash to be delivered.
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