Apple Inc. (AAPL) Robust Demand, Muted Growth: RBC

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Apple Inc. (NASDAQ:AAPL) could experience robust growth for its tablets and smartphones according to analysts from RBC Capital Markets. They do anticipate spending in the IT departments of businesses, although most of that will likely come in the second half of the year and / or the government or public vertical, and growth throughout the year will likely be muted. Therefore they believe that investors should focus on companies that can “sustain strong operating execution despite muted revenue growth,” like Apple.

Apple Inc. (AAPL) Robust Demand, Muted Growth: RBC

RBC Capital believes Apple Inc. (NASDAQ:AAPL) will see robust growth because it has a solid supply chain that can easily support its ecosystem. They expect the company’s sold units to increase 25 percent to 219 million for the 2013 calendar year, and Apple’s supply chain will help the process along.

Analysts also believe that expansion of product lines will be an important factor for growth this year, which could also point to Apple Inc. (NASDAQ:AAPL) as being a smart investment. In their latest report to investors, they said multiple expansions will be difficult this year. However they believe that companies which demonstrate the ability to expand in this year’s economic climate are also reflecting revenue growth.

The number of product cycles and acquisitions this year will weigh heavily on a company’s ability to expand, and Apple Inc. (NASDAQ:AAPL) does already have several product cycles either planned or expected this year, like the next iPhone, a possibly updated iPad Mini, and possibly even an updated Apple TV box and the Apple Television itself.

Overall they say their expectations for Apple this year “vary across the board.” But they place their consensus at a decline in gross margins year-over-year. If Apple is able to either maintain or exceed its gross margins from 2012, then the upside will likely be reflected in earnings estimates for next year. They believe Apple will see 40 to 42 percent gross margins for its 2013 fiscal year.

The key driver which could add upside to the stock is the release of a new product line. Analysts point out that Apple Inc. (NASDAQ:AAPL) has entered a new market “on a three-year basis,” so this year could be the year for a new line.

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