Zacks Analyst Blog Highlights: Apple, AT&T, Verizon Communications and Vodafone

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Apr 15, 2011, 09:30 ET

CHICAGO, April 15, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple Inc. (Nasdaq: AAPL), AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ) and Vodafone Plc (NYSE: VOD).

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Here are highlights from Thursday's Analyst Blog:

iPhone 4 Goes White

Reportedly, Apple Inc. (Nasdaq: AAPL) is set to launch the white version of iPhone 4 in the coming weeks, after a delay of 10 months since the black iPhone 4 was launched in June 2010.

Apple mentioned a range of manufacturing snags, from faulty sensors to flawed cover paints that peeled under heat, for the 10-month delay. Supposedly, the manufacturing faults have now been repaired.

The new version of iPhone 4 will be available from AT&T Inc. (NYSE: T) and Verizon Wireless, a subsidiary of Verizon Communications Inc. (NYSE: VZ) and co-owned by Vodafone Plc (NYSE: VOD).

Among other Apple products, introduction of the white color is a sales strategy as white gadgets have been highly popular ever since the launch of the first iPod media player in 2001. Almost all Apple gadgets, including iPhone 3GS and the recently launched iPad 2, have a white version and were launched along with the regular versions.

Coming to the sales, 39.0% of Apple's sales in the December quarter came from iPhones and we expect the introduction of the new version of the iPhone 4 to boost sales further in the coming quarters.

Moreover, the recently launched iPad 2 is already sold out in the US and sales figures would have jumped higher if Apple had not been bogged down by supply constrains due to the Japan calamity that delayed fresh supplies for four to five weeks.

In recent times, Apple has been in the news for lawsuits and some customers complaining against connectivity issues related to the iPad 2 for the Verizon Wireless network.

Despite all these concerns, we believe the sheer stature and innovative capability of Apple will enable the company to 'Outperform' its peers in the long term.

Apple has been a wealth creator for its investors over the past decade and remains the favorite stock in the technology sector with its stupendous growth trajectory and the timeliness of innovative product launches.

Currently, we have a Zacks #3 Rank for Apple, which translates into a Hold rating in the short term.

PC Sales Drop in 1Q

The overall Personal Computer (PC) market is witnessing a downward trend, as elucidated by a year-over-year decline of 1.1% in PC shipments to 84.3 million during the first quarter of 2011. Technology research firms, IDC and Gartner unanimously confirmed the fact that there was a drop in PC sales compared with the year-ago quarter. The main reason behind the declining PC sales is the growing popularity of Apple's iPad, which continues to take significant market share from the PC and notebook markets.

Gartner and IDC expected PC sales to grow 3.0% and 1.5%, respectively. Apart from the growing popularity of the iPad, consumers did not show much interest in buying cheap PCs, a product category that acts as a major catalyst in PC sales growth. Rather, they were interested in tablet computers and other consumer electronic products.

Weaker consumer demand in the U.S. as well as in other European regions also impacted PC sales to some extent.

IDC opines that PC manufacturers must adopt a better sales technique for computers instead of simply displaying their hardware specifications in order to succeed in the PC business.

According to IDC, total PC shipments were 92 million in the fourth quarter of 2011. Gartner's estimate was close at 93 million. IDC measured a 2.7% increase over the past year, while Gartner estimated a 3.1% increase.

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