Apple stock finally started to recover over the last several months, but what’s going to happen to it in 2014? This past year has been plagued by numerous question marks, and some of those question marks were answered. However, Apple Inc. (NASDAQ:AAPL) investors still have plenty of questions.
Apple Inc. versus Carl Icahn
One of the big issues which has plagued Apple Inc. (NASDAQ:AAPL) and its stock in 2013 is its growing pile of cash. First David Einhorn put the pins to the company to get more cash out of it, and now Carl Icahn has Apple Inc. (NASDAQ:AAPL) in his crosshairs. He recently filed to have a reduced version of his share buyback plan added to the list of items to be voted on at Apple’s February shareholders’ meeting. Originally, he wanted the company to buy back $150 billion worth of Apple stock as soon as possible, but he reduced that to $50 billion on his recent filing and requested that a non-binding vote be taken. Last week Apple Inc. (NASDAQ:AAPL) recommended in its proxy filing that shareholders vote against Icahn’s proposal.
So what’s ahead for 2014? Unfortunately this is an issue we will probably keep hearing about, at least leading up to the shareholders’ meeting in February. And as Daniel Sparks of The Motley Fool notes, Apple continues to rake in enormous amounts of cash. Just in the last quarter, Apple racked up $23 billion in cash flow. That amount will likely be even more in the December quarter. The only question now is how much cash return it will take to keep Carl Icahn happy—or at least all of Apple’s other shareholders happy.
Apple to make more acquisitions?
In Apple Inc. (NASDAQ:AAPL)’s argument against Icahn’s buyback proposal, the company said it needs the cash in order to be flexible enough to remain competitive in the technology space. Apple did make a number of acquisitions this year, although many of them haven’t been reported publicly. The company doesn’t typically say much about its acquisitions.
In February, CEO Tim Cook said they had plans to make some big acquisitions in 2013, and it did buy at least 15 companies, including sensor maker PrimeSense, BroadMap, Catch and Topsy. So will there be more acquisitions in 2014? It’s hard to say. This past year seems to have been an especially active one for Apple in terms of acquisitions, but shareholders will want evidence that the company is putting all the cash it’s hoarding to good use.
Apple stock to be affected by new products
Aside from discussions about cash, Apple stock will probably be affected by new products in 2014—or the lack of them. Investors and even the company’s board are starting to worry that the company has lost its innovative edge, particularly because no new product categories have been created since co-founder Steve Jobs passed away. If 2014 goes by without any new categories, that will make four years since the company’s last new production, which was the iPad in 2010.
Some possibilities for the upcoming year include an iTV and an iWatch, although there has been speculation about both of these for quite some time. Analysts have been convinced that Apple Inc. (NASDAQ:AAPL) has been working on a smart TV for years, but there has been no obvious evidence that it is.
Apple in China
Investors did get some answers regarding a less expensive iPhone and finally, China Mobile. Rumors about a less expensive iPhone persisted for most of this year, although Apple didn’t deliver quite what analysts were calling for because of the higher-than-expected price tag. Nonetheless, some did find a bright side to that higher price, which means better margins. After all, margins have been a concern for Apple all year, but it appeared as if they had stabilized in the last quarter. Apple stock could be affected when the company reports its next earnings results because shareholders will want to see margins continue to be in a good place.
The long-awaited deal with China Mobile arrived only recently, and the timing of the arrival of the iPhone on the carrier is considered to be excellent because it could bolster Apple Inc. (NASDAQ:AAPL)’s earnings results for the March quarter, which typically is seasonally slow.
So will Apple stock hit $600 again anytime soon? If it continues its recent trend, it just might do so in 2014. But whether it will hit its all-time high of more than $700 a share again in 2014 is anyone’s guess at this point.