The Lead: Apple reaches new high after China Mobile deal, acquisitions reports
Apple stock has suffered for much of 2013 amid concerns that the Cupertino tech giant will not be able to continue growing revenues from their current peak, but a long-awaited deal with the world's largest wireless carrier may have staved off those concerns, as Apple shares enjoyed their highest closing price of 2013.
Apple gained 3.8 percent to $570.09 Friday after Sunday's announcement of a deal with China Mobile, which will open up new sales opportunities for the company's iPhones, with Creative Technologies analyst Tim Bajarin calling it "a huge deal for Apple."
Estimates of additional iPhone sales from Apple's new deal run the gamut, with J.P. Morgan analyst Mark Moskowitz suggesting Apple could sell about 2 million additional phones per quarter to begin with, while Cowen analyst Timothy Arcuri suggested Apple could eventually sell 20 million units a year to China Mobile. Analysts did have universal praise for Apple's ability to finally pull off a deal and get it done before the important shopping season ahead of the Chinese New Year.
"We believe the opportunity for the iPhone to expand its reach within China Mobile's wireless subscriber base will prove to be well worth the wait," Cantor Fitzgerald analyst Brian White wrote Monday.
Apple CEO Tim Cook seemed to be in a celebratory mood, sending Apple employees an email thanking them for the successes found in 2013 and looking ahead to the new year.
"We have a lot to look forward to in 2014, including some big plans that we think customers are going to love. I am extremely proud to stand alongside you as we put innovation to work serving humankind's deepest values and highest aspirations," Cook wrote, according to 9to5Mac, which received the memo.
Cook's missives could be reaching more employees than previously known, as 9to5Mac also reported that two Apple acquisitions have been able to avoid the media spotlight thus far: Mapping company BroadMap and San Francisco Evernote competitor Catch. If true, the report is yet another that shows Apple has become more open to acquisitions, with the number of companies Apple purchased in 2013 tripling the total of 2012.
Apple's 2013 acquisitions appear to be more targeted at improving its workforce than its financial performance, though, according to a Silicon Valley venture capitalist.
"None of these acquisitions that Apple does gives them new users or revenue," Matt Murphy of Kleiner Perkins Caufield & Byers told Bloomberg News. "It augments their innovation that they do internally."
The China Mobile deal is more likely to add users and revenue to Apple's coffers, but analysts are divided on the end result of the move, especially if Apple decides against creating a cheaper phone targeted at the Chinese market. In addition, Apple and China Mobile have not announced how much the wireless carrier will subsidize Apple's smartphones, which could have a large effect on the number of phones the carrier sells.
"China Mobile and Apple working together isn't fundamentally going to be a game changer in the smartphone market," Forrester Research analyst Frank Gillett contended Monday.
SV150 market report: Record highs for Facebook, Twitter as stocks gain
Wall Street rose in light trading Monday, the beginning of a week that will be interrupted by the Christmas holiday Wednesday. Silicon Valley stocks easily outpaced the broader Wall Street indexes, with the SV150 index gaining 2 percent, nearly double the percentage gains of the tech-heavy Nasdaq index.
Social-media rivals Twitter and Facebook continued their majestic rise, with both stocks hitting new all-time intraday and closing highs again Monday. Facebook moved as high as $58.32 and gained 4.8 percent to $57.77, new intraday and closing highs, on its first day as a member of the Standard & Poor's 500 and 100 indexes. The Menlo Park social network moved higher after pricing a secondary offering of shares at $55.05 Friday afternoon, which will net CEO and co-founder Mark Zuckerberg billions, some of which is earmarked for charity. Twitter continued to soar to new heights, moving as high as $64.99 before closing with a 7.6 percent gain at $64.54 as chairman and co-founder Jack Dorsey was elected to the board of Disney. The two companies -- which make the majority of their revenues from selling advertising -- could be seeing seasonal revenue gains, according to Cantor Fitzgerald analyst Youssef Squali, who raised his price target for Facebook. "Ad intensity has increased throughout the all-important holiday period," Squali wrote.
Google (GOOG) also moved to record prices, gaining 1.3 percent to $1,115.10 as Dow Jones discovered that the Mountain View search giant was the most talked-about company in 2013, outpacing Apple. Hewlett-Packard (HPQ) increased 0.9 percent to $28.05 after a report said the Palo Alto tech giant is nearing a new smartphone effort, and Oracle (ORCL) gained 2.1 percent to $21.57 after declining Friday in the wake of a big acquisition. Yahoo (YHOO) gained 1.6 percent to $40.77 and continued to rack up big Web hits, eBay (EBAY) rose 1.3 percent to $55.30 and Pandora Media increased 5.6 percent to $29.58.
Up: Twitter, Pandora, Facebook, Apple, Cisco (CSCO), Zynga, Applied Materials, Symantec, AMD, Yahoo, Splunk, Salesforce, Oracle, Intuit (INTU), Electronic Arts (ERTS), eBay. Google, Netflix (NFLX), SolarCity, SanDisk, Intel (INTC), Workday, HP
Down: VMware, Ruckus, Juniper, NetApp
The SV150 index of Silicon Valley's largest tech companies: Up 29.29, or 1.99 percent, to 1,503.73
The tech-heavy Nasdaq composite index: Up 44.16, or 1.08 percent, to 4,148.9
The blue chip Dow Jones industrial average: Up 73.47, or 0.45 percent, to 16,294.61
And the widely watched Standard & Poor's 500 index: Up 9.67, or 0.53 percent, to 1,827.99
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.