Ah, yes, the holidays. It’s the time of the year when Apple Inc. (NASDAQ:AAPL), retailers and others are hoping to finally see some profits. But will this holiday season bring good tidings for Apple, or just more bad news? One analyst interviewed on CNBC’s “Squawk on the Street” sees few catalysts on the horizon for Apple heading into this year’s holiday shopping season.
Apple struggles as competitors catch up
BGC analyst Colin Gillis believes Apple Inc. (NASDAQ:AAPL)’s name is losing some of its luster with consumers as competitors come out with more and more competing products. He says the gap between what Apple offers and what its competitors offer has been narrowed, which is a big problem from Apple as those competitors offer less expensive devices which do pretty much the same things.
He’s looking for a major catalyst, but unfortunately, he doesn’t see many possibilities
Will Apple seal the deal with China Mobile?
One of the few and possibly lone catalyst Gillis sees is a deal with China Mobile Ltd. (NYSE:CHL) (HKG:941). Unlike some who think the deal may be pushed into next year, he believes we could hear about it as early as the middle of next month, and at least one rumor suggests he could be right. If and when Apple Inc. (NASDAQ:AAPL) does reveal a deal with China Mobile, the analyst believes its outlook will be stimulated.
Gillis is estimating that Apple will sell over 25 million iPads this year, but he believes investors could be disappointed if the company doesn’t go over that number. He says the company’s competitors have caught up to the iPad, just as they did with the iPhone, cutting into Apple’s share of the market.
Where Apple disappoints
One place where Gillis said Apple Inc. (NASDAQ:AAPL) has particularly fallen behind is in the area of motion sensing technology. The company revealed that it acquired Israeli sensor maker PrimeSense recently for about $350 million. Gillis thinks sensors are becoming a more and more important part of the living room and believes that instead of dividends, he thinks Apple should put more cash into innovation. In addition to motion sensing technology, Gillis also believes Apple lacks in payments and advertising. In fact he says there are “a lot of areas where they’re weak.”
In spite of his bearish view on Apple Inc. (NASDAQ:AAPL), Gillis did report that his survey suggests many people are still wishing for Apple products this year for Christmas.