Apple Inc. (AAPL) Upgraded To Buy By Barclays But There Might Be Trouble In The Industry: Jon Steinberg


Apple Inc. (NASDAQ:AAPL) may have been recently upgraded by Barclays but Jon Steinberg thinks that there might be trouble in the field, the Daily Mail North American CEO expressed in a discussion on CNBC.

The discussion was prompted by Ben Reitzes of Barclays changing his rating on the Apple Inc. (NASDAQ:AAPL) from Equal Weight to Overweight. In a note where he said he is “back on board” the stock, the analyst also raised his price target for the stock from $95 to $110.

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The discussion was started by Fortt by saying that he has been looking at a graph of Apple Inc.’s (NASDAQ:AAPL) stock versus Samsung Electronics stock and see that as the South Korean company has fallen over the past two years, it’s Cupertino, California-based rival has gained momentum. Furthermore, Fortt said that the iPhone-maker is now really a different company with its dividends, buybacks, a broader product strategy, its new developer tools unveiled at the last Worldwide Developers Conference and rumored products like the iWatch.

Carl Quintanilla wondered though what effects will a Samsung price cut will have on rivals such as Applel.

Steinberg cautioned against the Barclays upgrade. He said:

“That’s exactly right. Samsung says, in their release when they preannounced [Q2 performance], they said: ‘We executed marketing expenses somewhat aggressively to reduce channel inventories in preparation for 3Q peak season.’ So if Samsung is having trouble selling devices, the Barclays report makes the argument that that is good for Apple. I don’t view it that way. It’s always been a rising tide in this industry. If Samsung is selling more, Apple is selling more. Ultimately, I think, if Apple does not come out with a 5.5 inch phablet, which now we have a report out this morning saying that they may miss, you’re going to have just a 4.7-inch phone. That I don’t think is enough. It will be good but it is not the once you want.”

Watch the discussion below.


Hedge funds with Apple Inc. (NASDAQ:AAPL) positions includes Greenlight Capital managed by David Einhorn which reported 1,993,706 shares in the iPhone-maker by the end of the first quarter of the year. Another shareholder is Jim Simons’ Renaissance Technologies which reported 821,362 shares in the company also in the same period. Those stakes were valued at about $1.07 billion and $440.86 million respectively.


Disclosure: None