Apple Inc. (AAPL) iRadio, New Generation iPad: Goldman’s Take

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Apple Inc. (AAPL) iRadio, New Generation iPad: Goldman’s Take
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Apple Inc. (AAPL) iRadio, New Generation iPad: Goldman's Take

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Apple Inc. (NASDAQ:AAPL) week in review from Goldman Sachs. Apple Inc. (NASDAQ:AAPL) reportedly close to a deal with two major music labels for streaming radio service Apple’s “iRadio” reportedly close to launch, yet labels still have to sign (Ars Technica, April 5, 2013)

Summary:

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Apple Inc. (NASDAQ:AAPL) is close to striking a deal with two of the four major music labels to offer a streaming radio service, according to CNET. With Warner Music and Universal Music Group reportedly close to a deal, Apple Inc. (NASDAQ:AAPL) would still need to reach an agreement with EMI and Sony Music before launching the service. Ars Technica notes that the issue that appears to be holding back the labels is Apple Inc. (NASDAQ:AAPL)’s decision to weigh its payment structure on ad revenue instead of the more traditional per-play rate.

Goldman’s take:

Speculation of Apple Inc. (NASDAQ:AAPL) offering a radio service has existed for years with the main hurdle appearing to be the approval of the labels. While this article suggests Apple could be making some progress on this front with a possible deal from two of the major labels, it would be critical to have all the major labels on board. If the company is ultimately able to introduce a comprehensive service, we believe it would serve to keep competition from streaming services at bay and at the same time add another layer to the company’s already strong ecosystem. Nevertheless, They believe Apple will still need to introduce new hardware products to reignite investor interest in the story.

5th generation Apple iPad to begin production in July-August

5th Generation iPad to Begin Production in July-August (MacRumors, April 9, 2013)

Summary:

Referencing an article by Digitimes which cites sources in the Taiwan based supply chain, MacRumors reports that Apple Inc. (NASDAQ:AAPL) is expected to begin volume production of the 5th generation iPad in July-August 2013. This runs counter to prior expectations, which suggested an iPad launch as early as April.

Goldman’s take:

They currently expect Apple Inc. (NASDAQ:AAPL) to refresh its traditional iPad product family in the second calendar quarter, which would allow for channel fill in the June quarter. Although They are cautious on traditional iPad demand given the success of the iPad mini, a July- August ramp would shift a portion of our unit forecast from the June quarter to the September quarter.

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