Here is your daily Apple Inc. (NASDAQ: AAPL) news for September 13, 2010. The iPad may join the Kindle and a number of other new electronics on sale at Target retail stores come this October. The iPhone 4 Case Program is ending as planned on September 30 and Apple shareholders may see an unexpected windfall as a result. Finally, the WiFi iPad goes on sale in China.
Apple to Sell iPads Through Target Retail Stores in October: According to an unnamed source affiliated with the retailer who spoke to tech blog Engadget, Apple will begin selling the iPad at Target (NYSE: TGT) stores on October 3. The tablet computer will be displayed in Target’s “Digital Audio” department and will be available at six price points starting with the $499, 16GB WiFi model and ending with the $829, 64GB model with 3G communication in addition to WiFi. This rumor appears just weeks after Target announced their overhauled electronics and mobile device, both phone and otherwise, departments. Amazon (NASDAQ: AMZN) also just recently announced that they would begin selling their Kindle e-reader through Target’s chain of big box stores. While it hasn’t been confirmed that Apple’s tablet will be available at the store, it seems likely in light of current target initiatives.
APPL Shareholders Reap Rewards as iPhone 4 Case Program Ends: Apple Inc. confirmed last week that, as they predicted in July, it will be ending the iPhone 4 Case Program on September 30. The program began in response to “Antennagate,” referring to the iPhone 4’s faulty antenna design and the subsequent public relations fiasco surrounding it after the smartphone’s June 24 release. Apple opted to provide iPhone 4 customers with free protective bumper cases for their iPhone 4s in lieu of a product recall that would have cost the company a significant portion of their 2010 earnings. While the broad program will be ending and its homepage at Apple.com taken down, Apple will continue to offer free bumpers to customers who contact them individually. Kaufman Bros. analyst Shaw Wu sees this move as beneficial to customers, but will have an unexpected benefit for Apple shareholders. With the $175 million set aside to support the free case program getting reintegrated into Apple’s coffers could mean a jump of between 25- and 45-cents earnings per share come April 2011. Since Apple already sets aside large reserves to support warranties on their products, any funds retained by ending the free case program become additive. Wu notes that $175 seems a marginal amount in light of Apple’s $45.8 billion in cash, but that money could mean substantial gains for shareholders at the end of the fiscal year.
WiFi iPad Model Hits China: Apple has already released the WiFi-enabled iPhone 3GS in China since that country raised their restrictions on wireless protocols mid-summer. Now, they’re rolling out their WiFi-only models of the iPad. The 16GB, 32GB, and 64GB configurations of iPad will be available and each will retail at a significant mark up over their US counterparts. Apple Inc. has been aggressively expanding into China in the past twelve months. They launched their flagship retail store in Shanghai in July and are planning 25 more stores across the country. Apple faces challenges in China though. Their current data carrier for the iPad and iPhone, China Unicom, is offering in-store jailbreaking of Apple’s mobile devices, a policy that no doubt troubles a company as restrictive with their hardware and software usage as Apple.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
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