Apple’s shares start to recover from their earnings miss–but I’m still in bargain-hunting mode

Could today mark the turn for Apple (AAPL)? Apple shares are up 2.3% today, November 15, as of 2:45 p.m. New York time. An up day has been unusual for the stock ever since it fell short of analyst expectations when it announced earnings for the fiscal fourth quarter (that ended on September 24) on October 18. But today the shares have advanced on reports of October retail sales that show solid growth in sales of consumer electronics. And that has raised hopes for holiday sales of electronics—including the iPhone and the iPad.

Even with today’s gain the shares are down 8.2% since the October 18 high at $422.24.

I think it’s too soon to say that Apple shares are headed straight up from here. A stock doesn’t shake off its first earnings miss in six years quite that easily. I think Apple still has to prove that last quarter was a fluke by reporting stronger than expected earnings for the fourth quarter.

But I think we’re seeing the beginning of the retreat of the pessimism that has surrounded the shares ever since the death of Steve Jobs.

The molehill problem in third quarter earnings—that Apple had sold fewer iPhones than projected probably because the new iPhone 4S had cannibalized sales of older models—has somehow turned into a mountain that Apple shares haven’t been able to climb. Read more

Verizon gets the iPhone tomorrow (probably), but who gets the profits?

Verizon (VZ) and Apple (AAPL) will hold a press conference tomorrow to announce, everybody on Earth and the inner planets believes, that Verizon will start selling the iPhone in February 2011.

The big question, though, is price. Will Verizon subsidize iPhone sales to the same degree that AT&T (T) does now? If so Verizon is looking at big sales in 2011 but a substantial ding to earnings. If not, Apple will either see its huge margins on the iPhone, estimated by some Wall Street analysts at 60%, reduced or Verizon will wind up selling the iPhone at a price that makes it much less competitive with phones based on Google’s (GOOG) Android operating system.

The answer to that question depends on which company, Apple or Verizon, turns out to have been most anxious.

Apple badly needs another selling outlet besides AT&T. That company’s network has been slowed by the huge amount of bandwidth iPhone users consume to the point that the slow speed of service has cut into iPhone sales. (And in some cities, the AT&T network has been inadequate, users like my New-York-City-based partner Bob say, from the beginning.) Add in price cuts from Android-based phone makers and Android-based phones that have closed the “coolness” gap with the iPhone, and it’s really not surprising that Android-based phones grabbed 26% of the smart phone market in November, according to ComScore MobiLens, to the iPhone’s 25%. (Android’s share is coming largely at the expense of Research in Motion’s Blackberry, which saw its share drop to 33.5% in November from 37.6% in October.)

But Verizon needs the iPhone perhaps even more than Apple needs Verizon. Every month that AT&T is the sole outlet for the iPhone means another month where Verizon adds fewer customers than its big rival. In the third quarter, according to All Things Digital, Verizon had fewer than 3 million smart phone activations while iPhone activations exceeded 5 million. Verizon is spending billions to upgrade its network and the company can’t afford to fall behind AT&T in market share.

I think Verizon was the more anxious of the two companies. Read more

The other war between Apple and Google

There are two fronts in the increasingly bitter war being fought between Apple (AAPL) and Google (GOOG). And while the contest between the iPhone and Google’s Nexus One (and other Android phones) is getting most of the ink, it’s the apps battle that comes with the biggest stakes. Read more

Update Qualcomm (QCOM)

One chip in. One chip not quite in but closer. Between the two maybe this stock has finally achieved some upside momentum.

Two big announcements in the tech world with Qualcomm (QCOM) near the center of both. Read more

Apple’s iPhone to go to T-Mobile and not Verizon in 2010

When AT&T’s (T) exclusive deal expires in 2010, Apple’s (AAPL)  iPhone is most likely to find a second home with T-Mobile and not Verizon (VRZN). That’s the conclusion of a note published by analyst Doug Reid of Thomas Weisel Partners and picked up and amplified by AppleInsider.

Here’s his logic. Read more