Jeffries Has Buy Rating on Apple

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Oct. 29 (Bloomberg) -- Jeffries Managing Director Peter Misek discusses Apple's earnings and outlook for the company on Bloomberg Television's "Market Makers." (Source: Bloomberg)

Company's holiday forecast was not quite as rosy, with sales growth expected to be the slowest it has been in half a decade.

Is the shine coming off the apple?

For some insight, i want to turn to the managing director at jefferies who follows the company.

He joins us from his office in new york.

Are you worried about apple?

Are they losing their shine?


we actually found the guidance to be better than expected.

The street was expecting 55 and they got between 55-58. keep in mind that the high end of the market is saturated of tablet market is starting to mature.

Without the guidance is good trade the only issue is rose margins and our accounting issues folks are trying to get comfortable with.

Where is the next big innovation for apple.

I feel like we have been talking about apple tv for eons and it just hasn't happened.

As far as the tv goes, we have had fits and starts.

The production of panels apple was buying was ramping last year and died down this year as they waited for four k and there were some operational snafus.

But the growth is in the install base.

Subscribers and getting people to upgrade and replace.

At this point, we have around 70 million iphone subscribers eligible for a free upgrade.

This time next year, you'll have 150 million, or more than 15% more.

Earnings and revenue are likely going to accelerate as you get this massive upgrade cycle in front of the iphone six.

If you look at the smartphone market, the growth comes internationally and the momentum is behind the lower-cost phone.

Is it going to eventually hurt apple or can they continue through premium price strategy?

At some point, they will have two lower price, but we don't see them going below $300. they can take their existing portfolio and lower the price and do comarketing payments and incentives and coupons and that kind of activity.

They can also start offering financing.

There are ways to bring the price down without actually cutting the price.

Analysts love me -- analysts love to tell me i'm in the dark ages are being addicted to mike keypad but how important is it to use corporate clients?

Those who need frequent e-mail still use a device that has a keypad area the issue for apple is to have a bigger screen.

I think you'll find having a 4.8 inch screen, you can type much easier.

I keep two devices not because of keyboard issues, i keep two devices because of regulatory and compliance issues area are those two devices apple devices or as one a blackberry and one is apple?

One is apple in one is blackberry.

I? because it is corporate issued and i don't want corporate work on my personal phone.

Do you think it is easier to type?

If jeffrey said you could have an iphone or blackberry, would you go for an iphone?

For all e-mailing that you do?

Absolutely i would use an iphone.

I've gotten used to touchscreen, so that's not an issue for me.

For most people, it's not a great experience, typing as many e-mails as they do, but they get over it.

As you get a bigger screen, that would make it a lot easier.

He is more tech savvy than both of us.

Setting the products aside for moment, there's a huge question about what apple should do with the cash.

Carl icahn wants $150 billion returned to shareholders.

How do you see apple deploying it.

Could they perhaps make an acquisition.

Acquisitions are not really their style.

Rather than using up the cash to buy up an acquisition, we expect them to increase their buyback and increased their dividend into q1. we would be very surprised -- what about david einhorn?

They already had a dividend and buyback in place and they didn't do anything more than accelerate the plans they already had.

Is is this ultimately what's going to be driving the stock?

This question of financial engineering rather than the product cycle and innovation going on there?

We don't think so.

We think the product sales at new products and how the cost structure looks will drive it more than tweets from carl icahn.

The biggest issue here is can they sell iphones?

It really is an iphone story.

Management is probably not overly preoccupied with it either.

Carl did criticize the board.

On a phased in any way?


they have delivered more value per shareholders and any company in corporate america.

I find it hard pressed to be bullied by any shareholder at this point.

Do you follow carl on twitter question mark i am actually not on twitter.

I try to stay away from social media.

There are two main people that like to do inappropriate things on those devices.

Are you covered -- are you covering twitter going into the

This text has been automatically generated. It may not be 100% accurate.


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