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Apple’s New Smaller iPhone May Be Nothing To Text Home About

You probably won’t need to hold onto your socks during Apple ‘s ( AAPL ) spring product launch event on Monday. That’s the message from Wall Street analysts trying to set realistic expectations for what’s likely to be announced. The tech press has been reporting for weeks that Apple will unveil a new 4-inch iPhone, a new 9.7-inch iPad and new Apple Watch bands at the media event Monday at Apple’s headquarters in Cupertino, Calif. “While we expect to see several ‘under the hood’ improvements across devices, we are not expecting the same exuberance as last year when Apple shared final details of the Apple Watch,” Oppenheimer analyst Andrew Uerkwitz said in a report Friday. “Moreover, we worry investors will find the next several Apple media events underwhelming.” Uerkwitz rates Apple stock as outperform with a 12- to 18-month price target of 120. Apple shares rose 12 cents to 105.92 on the stock market  Friday. Apple has a bunch of innovations in the works for release in 2017 and 2018, he said. They include possibly an iPhone with an OLED display, a virtual reality headset, 360-degree camera, and a hub for smart-home products using Siri, Uerkwitz said. Any surprises at Monday’s event likely will revolve around pricing for the new products and possibly the Apple Watch or the introduction of new MacBook or Mac Pro computers. Apple CEO Tim Cook also is likely to use the event as a platform to reinforce the company’s argument that the federal government has overstepped its legal bounds by demanding Apple hack its iPhone security. Apple and the Justice Department are set to square off in a federal court on Tuesday in a criminal case where the FBI wants Apple to develop software to bypass its password security measures. Because Apple gets most of its revenue from the iPhone (68% of sales in the December quarter), most of the attention Monday will be focused on the rumored iPhone SE. The new 4-inch iPhone will replace the same-size iPhone 5S, which was introduced in September 2013 and is still on sale. An iPhone For Emerging Markets The new model is expected to sport an A9 chip, NFC technology to enable Apple Pay and a 12-megapixel, rear-facing camera to bring it up to snuff with the other iPhones. But it reportedly won’t have a pressure-sensitive screen like the premium models, the iPhone 6S and 6S Plus, which have 4.7- and 5.5-inch displays, respectively. The SE will be targeted to customers who prefer a smaller size handset as well as emerging markets because of its expected lower price. The iPhone SE “is likely to be a low-volume (for Apple) product that has minimal effect” on its earnings and stock price, Pacific Crest Securities analyst Andy Hargreaves said in a note Thursday. Hargreaves is bullish on Apple with a price target of 127 because of likely growth in the iPhone 7 cycle starting this fall. “Investors are not excited about this new phone,” Rosenblatt Securities analyst Jun Zhang said in a research note Tuesday. Zhang is “bearish” on prospects for the new iPhone SE because he expects that its price will be similar to second-hand iPhone 6 handsets in large emerging markets. “Second-hand iPhone 6’s are sold online at $350 in China, which we believe will be same price range of the iPhone (SE),” he said, adding that the price difference is such that many users will go with the larger display phone. Apple faced a similar pricing problem when it launched the iPhone 5C handset alongside the iPhone 5S. The 5C was priced only $100 cheaper than the 5S but had a cheaper-looking plastic casing. Sales of the iPhone SE are likely to be “ modest ” at 10 million to 15 million units annually, RBC Capital Markets analyst Amit Daryanani said in a research note Thursday. Still, the new phone could provide a buffer ahead of the launch of the iPhone 7, he said. Component suppliers likely to benefit from the iPhone refresh cycle include Jabil Circuit ( JBL ), Broadcom ( AVGO ), Amphenol ( APH ) and Texas Instruments ( TXN ), he said. Broadcom and fellow Apple chip supplier Microsemi ( MSCC ) both hit new buy points late last week. Also Monday, Apple is expected to unveil its third-generation 9.7-inch iPad Air, which will be given similar functionality and accessories to the 12.9-inch iPad Pro. The current iPad Air 2 was launched in October 2014. The iPad Pro with its Smart Keyboard and Apple Pencil debuted last September. But the tablet business has been in decline at Apple and the new iPad is unlikely to change that, analysts say. “We do not expect the updates to materially change our outlook for iPad units, which seem likely to continue declining through fiscal 2016, but at a moderating rate,” Hargreaves said. Apple holds an IBD Composite Rating of 66 out of a possible 99, factoring in earnings growth, stock performance and several other metrics. Chipmaker Broadcom gets a 98 , Amphenol a 91 and Texas Instruments an 84. Jabil is not currently highly rated by IBD, with a Composite Rating of just 47.  

Apple Has Been A Loser Since Joining The Dow — That’s Not A Surprise

Apple ( AAPL ) marked its first anniversary on the Dow Jones Industrial Average Friday with a fractional gain. But over the past year, the iPhone titan’s shares have fallen 17.6%, proving critics right when they say that stocks that join the blue-chip index are often past their prime. Ironically, AT&T ( T ), which was kicked out of the blue-chip index to make room for Apple, has risen 14.8% over the past year. Apple has had a tough year. Its Apple Watch has not been a blockbuster, while iPhone sales disappointed in the holiday period and should fall year-over-year in the current quarter. Apple will unveil a new, smaller smartphone at a Monday event, along with other products. But some analysts say that Apple’s event won’t excite . Apple’s slide is hardly unusual. Intel ( INTC ) and Microsoft ( MSFT ) were added to the Dow at the tail end of the dot-com boom. Microsoft marked time for the next 15 years, finally hitting new highs late last year. Intel is still well off its all-time highs. Bank of America ( BAC ) stands out. Added to the Dow in early 2008, its shares crashed 91% over the next year during the financial crisis. The Dow dropped Bank of America in late 2013, only to see its shares shoot up 17% over the following year. Alcoa ( AA ) and Hewlett-Packard, kicked out at the same time as BofA, rose 96% and 73%, respectively, in the next 12 months. But joining the Dow doesn’t have to be the end. Nike ( NKE ), one of the late 2013 additions, popped 17% in the next year and continued to outperform until its December 2015 peak. Nike reports earnings on Tuesday.

Apple-FBI Court Case Gets More Comedian-Splaining

Until this week, the only late-night comedian who ventured to explain the importance of the Apple ( AAPL )-FBI battle over smartphone encryption was Seth Meyers of NBC’s “ Late Night .” On Sunday, John Oliver weighed in on the controversy with a funny and informative bit on his HBO show “ Last Week Tonight .” He presented both sides of the case before showing a comical ad his show made for Apple in the company’s signature style. On Tuesday, Apple and the Justice Department will face off in a federal court in Riverside, Calif., over whether the government can compel Apple to hack its iPhone security protections for a criminal investigation. Meanwhile, comedian Remy made a music video parodying the Apple-FBI legal battle to the tune of “ Hotline Bling” by Drake. His version, called “ iPhone Bling ,” was done for Reason magazine. The case also was the subject of online comics by the Joy of Tech and the Onion . America’s late-night comics found other tech industry subjects to mock in addition to the Apple-FBI case. Those targets included Amazon.com ( AMZN ), Facebook ( FB ) and Spotify. What follows are recent jokes from Jimmy Fallon, Conan O’Brien, Jimmy Kimmel and Stephen Colbert. Fallon: Selena Gomez just became the most-followed person on Instagram with almost 70 million followers. When reached for comment, Kim Kardashian said, “I can’t get any more naked, guys. I’ve shown you everything I got.” Fallon: Spotify released a birthing playlist with songs to help women in labor. It includes artists such as John Legend. I guess ladies are like, “Hey, his music got into me this mess. Might as well get me out of this mess.” Fallon: And this is just crazy here. I saw that some researchers at Stanford University have made tiny robots that are modeled after bugs, and found that six of them could actually move a car weighing almost two tons. While two REAL New York cockroaches can actually flip the car over and set it on fire. “Come on – let’s go mug a delivery guy!” Fallon: Amazon just filed a patent for technology that allows customers to “pay by selfie,” where customers can verify purchases by taking a selfie. In related news, the Kardashians just went bankrupt. (That’s all it took!) Conan: It’s come out that Kim Kardashian has paid off Kanye West’s $53 million debt with proceeds from her video game. In case you’re unfamiliar, Kim’s video game is named “Call of Booty.” Conan: A private space company founded by Amazon chief Jeff Bezos plans to send humans into space by next year. Or if they sign up for Amazon Prime, by Tuesday. Kimmel: Facebook has reportedly patented software that recognizes new slang words when they’re posted. The software stores the words in what they call a social glossary while they’re current, then removes the words once they’re no longer popular. I wish Facebook would spend less time with stuff like cataloging new slang and more time trying to stop the monsters who keep inviting me to like their homemade jewelry page. Colbert: Amazon’s got this new voice-activated home assistant gadget called the Echo. You just talk to the Echo, and it tells you the weather or sports scores or controls the lighting or climate in your house. Now, the Echo is always listening, but it only activates when you say its name: Alexa. It’s a pretty name, much prettier than the earlier name, the privacy-destroyer Spy-Mike 5000.