I Did Better in the Long-Term Than the Short Run in 2013

12/19/2013 12:00 pm EST


Howard Gold

Founder & President, GoldenEgg Investing

The big news announced at the recent Worldwide Developers Conference had everything to do with adaptability and notification design, and, as of today, June 11, MoneyShow's Jim Jubak is raising his target price on this tech giant.

Ever since Apple's (AAPL) Worldwide Developers Conference, in the first week of June, analysts and market watchers have been parsing the company's news on new software features for clues on Apple's hardware plans. (The conference was, as usual, long on software news and very, very short on hardware news.)

The growing conclusion is that Apple is planning to launch the much-anticipated iWatch in October.

The thinking focuses on changes that Apple announced to the new version of its mobile operating system, iOS 8, and, in particular, to Apple's decision to open up notification design to independent developers working on mobile apps.

Notification design is getting a lot of attention from companies such as Google (GOOG), Samsung, and Apple that are working on mobile devices—Google Glass, Samsung Galaxy Gear, and iWatch—because figuring out how to deliver alerts and messages that are truly useful and cool on a screen the size of a (large) watch is extremely challenging. Too inefficient and the user will be overwhelmed by alerts. Too efficient and the alerts will be so cryptic that they don't deliver anything engaging to the average user.

At the WWDC, Apple announced that it was opening up the ability to customize the alerts and notifications delivered by apps to independent developers. That's really important, sources such as re/Code have concluded, because it marks Apple's acknowledgement that the iWatch (and any other wearable) will only sell if, at least, some of the applications available for the wearable are really useful, really attractive, and really cool. Opening up more of the interface design to independent developers suggests an effort to throw as many apps at the wall (or watch) as possible on the theory that some of them will deliver the hit that will drive sales of the hardware device. A recent post on re/Code cites sources that say Apple is so high on the iWatch that it's looking to produce three to five million a month.

The iWatch will be launched at an event in October, re/Code has concluded.

If you own shares of Apple (and the stock is a member of my Jubak's Picks portfolio), you've certainly enjoyed the recent bump in the stock and this week's 7-to-1 split. With the launch of the iPhone 6 (and its bigger screen) scheduled for the fall and the launch of an iWatch possible in that window, I'd certainly suggest holding on to see what autumn brings.

As of June 11, I'm raising my target price for Apple to a post-split $110 a share from the pre-split $650 (a post-split $92.86.)

Full disclosure: I don't own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I managed, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund shut its doors at the end of May and my personal portfolio is now in cash. I anticipate putting those funds to work in the market over the next few months and when I do I'll disclose my positions here.

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