Today: Apple's (AAPL) week of hyper-publicity leads into Friday's launch of two new models of iPhone as stock recovers. Also: Tesla, Pandora and software companies reach all-time highs on Wall Street.
The Lead: Apple wraps up week in spotlight with interviews, iPhone launch
After more than a week in the spotlight for nearly every technology fan and journalist around, Apple will finally begin selling its new iPhones directly to customers Friday morning, one day short of the anniversary of the launch of the smartphone's previous iteration and its record stock price.
Apple jumped in front of a renewed media barrage last week, when it announced two new iPhone models: the less-expensive iPhone 5C, which is housed in plastic and comes in a variety of colors, and the premium iPhone 5S. This week, however, the spotlight has grown red hot. After failing to announce preorders on Monday, as it had for previous launches, Apple shares descended on Tuesday; Apple rebounded and media outlets galore released glowing reviews of the new smartphones; Wednesday, Apple released its newest operating systems for mobile devices, iOS 7, amid more positive reviews as nearly 1 in 5 Apple devices reportedly upgraded within 24 hours.
On Thursday, the media onslaught had Apple's blessing, as an exclusive interview with CEO Tim Cook and two of his top lieutenants was released in the morning, with strong words from the quiet CEO on observers who expected the iPhone 5C to have a lower price point that would be able to battle cheap Android phones for market share.
"There's always a large junk part of the market," Cook told Bloomberg Businessweek. "We're not in the junk business."
"There's a segment of the market that really wants a product that does a lot for them, and I want to compete like crazy for those customers," he continued. "I'm not going to lose sleep over that other market, because it's just not who we are. Fortunately, both of these markets are so big, and there's so many people that care and want a great experience from their phone or their tablet, that Apple can have a really good business."
How good Apple's business will be in the current quarter could depend on the amount of sales it racks up this weekend: The new iPhones go on sale online at 12:01 a.m. Pacific time, and at Apple stores at 8 a.m. local time. When the iPhone 5 went on sale last year, it sold more than 5 million units on the opening weekend, and analysts believe Apple needs to top that figure to consider the launch a success, considering there are two models launching at the same time and China has been added to the opening-day launch, after previously waiting three months for new iPhones.
"If not for China, we'd be at a range of 4-5 million," Gene Munster of Piper Jaffray told MarketWatch, but he instead predicts total sales of 5 million to 6 million iPhones this weekend.
Walter Piecyk of BTIG Research agrees with Munster, predicting sales of about 6 million iPhones, but KGI Securities analyst Ming-chi Kuo believes the total will be larger, placing his bet on 6 million to 8 million smartphones sold, with 55 percent to 65 percent of those sold expected to be the cheaper model.
Apple's share price could use a blowout weekend, but has already begun to recover after a large decline in the wake of last week's iPhone announcement. Apple stock gained 1.6 percent to $472.30 Thursday, the anniversary of Apple's record closing high of $702.10; Apple's intraday record came two days later, on Sept. 21, 2012, the day the iPhone 5 launched. While analysts were calling for a four-figure share price for Apple in those heady days a year ago, they are now more pessimistic on the company than they have been since 2009, though there are believers, including activist investor Carl Icahn.
No matter which way the stock heads from here, Cook says that it will have little effect on him.
"I don't feel euphoric on the up, and I don't slit my wrists when it goes down," he told Bloomberg. "I have ridden the roller coaster too many times for that."
Meanwhile, Apple is also prepared for final approval of its new headquarters, with the city of Cupertino looking to sign off on the project before the end of November and Apple planning to complete construction in 2016.
SV150 market report: Records fall across the valley despite overall Wall Street decline
After reaching record-breaking highs Wednesday, Wall Street calmed back down on Thursday, but technology stocks still gained: The tech-heavy Nasdaq was the only one of the three main U.S. stock indexes to gain. and the SV150 moved 0.4 percent higher on the backs of Apple, Tesla Motors (TSLA) and Pandora Media.
Tesla established record intraday and closing highs, gaining 7 percent to $177.92 after moving as high as $180.47, after Deutsche Bank analysts raised the investment bank's price target to $200 and maintained a "Buy" rating after deciding that the Palo Alto electric car maker "is on track to modestly outperform" revenue forecasts for the current quarter. Tesla may be facing a roadblock in its home state, however: The California New Car Dealers Association asked the Department of Motor Vehicles to look into the company's advertising practices, part of a series of challenges such groups have made in several states. CEO Elon Musk is moving on to bigger and better things, though, seeking an engineer who can help add autonomous driving aspects to Tesla offerings within three years.
Pandora shot 6.7 percent higher to $27.35 Thursday, continuing a dramatic trajectory that has seen the Oakland company nearly triple its share price so far this year. The move prompted the company to increase the size and price of the stock offering it announced earlier this week; Pandora will now offer 13 million shares, with 2.7 million more available if demand exists, which is likely after the company's court victory Wednesday that could bring down its royalty payments.
Santa Clara device company Agilent also shot higher Tuesday, moving as high as $53.47 before closing with a 3.4 percent gain at $50.98 after announcing that the company will split into two entities, with shareholders receiving a part of both. Agilent, which was previously spun out of Palo Alto powerhouse Hewlett-Packard (HPQ), will focus on medical devices and other applied markets, while a new company will focus solely on electronic measurement products. HP received no boost from the move, falling 2.2 percent to $21.31.
San Bruno software firm Responsys hit record intraday and closing highs Thursday, its second straight day of strong gains after Morgan Stanley upgraded the stock and gave it a $19 price target; shares closed with a 10.4 percent gain at $18. While Adobe (ADBE) fell back from record highs established Wednesday, two other Silicon Valley software companies pushed their records even higher: Salesforce increased 1.7 percent to $53.38 and Workday gained 2.5 percent to $83.13. Oracle (ORCL) managed to trade at just about break-even after its Wednesday earnings report was a little light on revenue, closing with a gain of 2 cents at $33.89.
Silicon Valley's software segment will receive two new players Friday, when Rocket Fuel and FireEye are expected to join the public markets after announcing their price Thursday evening; for updates on the two initial public offerings, go to www.siliconvalley.com.
The SV150 index of Silicon Valley's largest tech companies: Up 4.97, or 0.37 percent, to 1,343.37
The tech-heavy Nasdaq composite index: Up 5.74, or 0.15 percent, to 3,789.38
The blue chip Dow Jones industrial average: Down 40.39, or 0.26 percent, to 15,636.55
And the widely watched Standard & Poor's 500 index: Down 3.18, or 0.18 percent, to 1,722.34
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.