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Apple could join Netflix & Amazon at Emmy’s: Top analyst, Munster

Susannah Lee

Apple (AAPL) stock has seen a lot of volatility since hitting an all-time high immediately following its last earnings report. Gene Munster, managing director and senior research analyst at Piper Jaffray expects a similar pop on Tuesday when the world’s largest company posts Q3 results.

“We’re optimistic about the stock following the report.”


The reason behind Munster’s bullish call is Apple’s smartphone. The iPhone acconts for more than half of all of Apple's revenues and according to Munster, it is gaining market share against phones running Google's (GOOG, GOOGL) Android operating system. He thinks this theme is “comforting… and a reason to buy more shares,” for longer-term investors.

Munster warns the “elephant in the room…is going to be about those tough comps.” But that won't be seen until the “December quarter, [when] you get the growth rates dropping dramatically from 30-40%, down to more like 5%,” he said.

Apple Music, iPod

After many year without revamping, Apple finally revealed a new version of its iPod Touch last week. Munster thinks the move is for Apple to be more relevant with music. “iPod is less than 2% of total sales,” noted the analyst. “Ultimately, the reason why they’re doing this really to try to promote their broader music offerings.”

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Apple Watch 

“The watch has been largely a disappointment for investors,” said Munster. He thinks this quarter won’t be much different.

“It’s more or less in line with what we had expected that this is going to take a year to two years to really gain momentum,” he said.

Munster thinks this fall is when we’ll find out if the product will be more impactful to generate consumer demand. That’s when “a new version of the watch software is going to be out that will allow apps to run natively on the watch,” he said.

Apple TV 

“It’s been a difficult road for Apple TV for us," admitted Munster. "We thought that is was coming in an actual panel and that’s not the case.”

But he hasn’t given up hopes that Apple may one day be nominated for an Emmy and join the likes of Netflix (NFLX) with its 34 nominations and 12 for Amazon (AMZN).

“Apple wants to do more in the living room and this fall, we expect them to have some sort of streaming service," he said. "If you think about their broader goals and ambitions, we think content could be a part of that.”

But this is a long term view. "Five, ten years down the road, I wouldn’t be surprised to see Apple getting some sort of a nomination as well,” said Munster.


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