Nuts and Bolts of Apple Inc. (AAPL)

In the tablet market, the company pointed to the growth outlook for the market as well as the high usage of the iPad relative to other tablets. Indeed, the tablet market is attracting people who have never owned a PC on top of its increasingly apparent PC market cannibalization. Finally, the company continues to expand in emerging markets, with the App Store now available in 155 countries, the iTunes Store in 100 countries, and iCloud in virtually every country. The company’s retail stores have also been key enablers of this growth, with the company noting that it now has over 400 stores and plans to add 30 more this year, mostly outside of the United States.

Growth Story All Round

Tech investors were encouraged to see a bullish sentiment from the management. All were positive on their ability to capitalize on long-term opportunities from trends such as mobility, big data and cloud. With regard to the demand environment, QLogic Corporation (NASDAQ:QLGC) and SYNNEX Corporation (NYSE:SNX) noted a stabilization in demand overall.

QLogic’s President & CEO Simon Biddiscombe also presented in the conference. The company reiterated that spending trends appear to have stabilized and discussed the longer-term outlook for the Fibre Channel and Ethernet markets. In addition, the company was optimistic on its Mt. Rainier technology, which should start generating revenues this year. QLogic said it started to see spending trends stabilize in the September quarter and reaffirmed that its March quarter guidance reflects this stabilization.

SYNNEX Corporation (NYSE:SNX)’s CEO provided an update and commentary on current demand trends. The company believes that the overall demand environment is flattish, with the SMB market a bit better and the consumer market a bit softer. Geographically, SYNNEX commented that things appear a bit softer in Canada relative to the United States. By product line, segments that have been soft, such as printing and PCs, continue to be soft and SYNNEX expects that dynamic to continue. Mobility sales, including tablets, are very strong, but this is partly balanced by the cannibalization of traditional notebook type sales. Finally, SYNNEX added that networking, security, and storage are a bit stronger.

Foolish Bottom Line

Overall, the presenting companies looked cautiously optimistic about the future, which has sent bullish signals to the market. Specifically for Apple, the Street is bullish given its flexible approach towards returning cash to the shareholders and improved product line in the future. Goldman has set a target price of $660 at a forward multiple of 14x and a 2013 EPS of $47.29.

The article Nuts and Bolts of Apple originally appeared on Fool.com and is written by Masam Abbas.

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