Wall Street Beat: All eyes on Apple, Yahoo

June 12, 2008, 04:20 PM —  IDG News Service — 

Yahoo and Apple announcements overshadowed all other tech events this week for IT investors. Apple's iPhone 2.0 launch raised mobile and consumer market issues, while the breakdown of talks between Yahoo and Microsoft removed the possibility of a truly game-changing event in the Internet realm.

All eyes were on Apple's US$199 iPhone 2.0 launch this week as the announcement, made Monday by CEO Steve Jobs at the Worldwide Developers Conference in San Francisco, stirred concerns -- and hope -- for the overall mobile device and retail tech markets.

Apples' good fortunes since the introduction of the iPod have depended on the success of its hit consumer products, which in turn have a "halo" effect on its Mac line. But attention is also paid to these launches because the devices themselves are seen as harbingers of things to come in the music, broadband video and smartphone markets, and IT investors bet heavily on them.

Right after the launch, the low price on the 8G-byte model and the fact that the company did not release a high end 32G-byte version, stirred fears that Apple would see its profit margin erode. Apple shares sank $4.03 to close Monday at $181.64. But the day after, high-profile analysts issued research reports saying the low price will help increase market size. They also said the already widespread geographical coverage, and an ending to exclusive carrier agreements, are setting the stage for iPhone user growth.

Citigroup and Lehman raised price targets on Apple Tuesday, sparking Apple shares to rebound to $185.64. Citing "potential for significant market share opportunities in the handset and personal computer markets," Merrill Lynch on Wednesday added Apple to its US 1 list, the investment bank's top-ranking investment suggestions for "buy"-rated U.S. companies, and reiterated its $215 price target. The investment firm also raised its forecast of 3G iPhone unit sales, estimating a 12 percent increase in fiscal 2009 to 22 million units, and a 13 percent increase in fiscal 2010 to 34 million units.

But Apple shares slumped again on Wednesday, as tech companies were dragged down with the rest of the market on renewed fears of high energy costs and inflation. The uncertain economy has depressed IT company share prices this year.

Sign up for ITworld's Daily newsletter
Follow ITworld on Twitter @IT_world

I like it!
Close

On Twitter now

Yahoo

Powered by Twitter
You are logged in | Sign out
Sign in and post to Twitter

What are you thinking?

Cancel Tweet sent

On Twitter now

Post a comment
The content of this field is kept private and will not be shown publicly.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.
peer-to-peer

jfruh
Apple syncing patent can't come soon enough

pasmith
New Twitter features borrow from 3rd party clients

Esther Schindler
Open Source Changes the Software Acquisition Process

mikelgan
How to set up continuous podcast play on the new iTunes

David Strom
Five important Windows 7 mobility features

sjvn
Guard your Wi-Fi for your own sake                        

Sandra Henry-Stocker
Grepping on Whole Words

 

Sidekick: The Good News & the Bad News
Either way you look at it Microsoft Data Center management did not follow standards or best practices in this failure. In which case it makes me wonder more about the outsourcing of corporate data much less personal data.
- mburton325

Join the conversation here

The Daily Tip

The Daily TipQuick, practical advice for IT pros. Made fresh daily.

Hot tips:

Want to cash in on your IT savvy? Send your tip to tips@itworld.com. If we post it, we'll send you a $25 Amazon e-gift card.

Newsletters

Subscribe to ITWORLD TODAY and receive the latest IT news and analysis.

I would like to receive offers via email from ITworld partners.
By clicking submit you agree to the terms and conditions outlined in ITworld's privacy policy.
Featured Sponsor

AISO founders envisioned a Web hosting company that was environmentally friendly. While the company employed energy-efficient innovations like solar panels, its infrastructure produced unacceptable power and cooling requirements. Find out how AISO leveraged AMD technology to overcome their challenge in this case study white paper.

In this whitepaper, Scalar explores the opportunity to change the landscape with respect to mission critical databases built around Oracle. Leveraging technologies such as Linux, high-end commodity processing power and Oracle RAC technology to architect, design, build and maintain database infrastructure that delivers maximum availability, reliability and performance at a fraction of traditional cost.

On a typical day, weather.com, the Web site for The Weather Channel in Atlanta, serves up between 15 million and 20 million page views. But in September 2004, when back-to-back hurricanes ransacked Florida, the peak traffic on one day more than tripled: over 70 million page views by more than 7 million unique visitors. Read the full success story now.

Marketplace