Yesterday Apple’s stock jumped over 1 percent after activist investor Carl Icahn tweeted that Apple’s shares are worth $240.00 a share while citing an open letter that he wrote to Apple CEO Tim Cook that explains how he expects Apple to sell 55” and 65” ultra high definition television sets in 2016 and introduce an Apple-branded car by 2020.
Apple shares closed up 1.10 percent yesterday at $130.19 which remains $109.81 away from Icahn’s $240.00 valuation of Apple.
According to Icahn’s projections for Apple’s high definition television sets, he forecasts revenues of $15 billion in FY 2016 and $37.5 billion in FY 2017 on 10 million and 25 million units with an average selling prices of $1,500.
“Considering our forecast for 30% EPS growth in FY 2017 and our belief Apple will soon enter two new markets (Television and the Automobile) with a combined addressable market size of $2.2 trillion, we think a multiple of 18x is a very conservative premium to that of the overall market” Icahn wrote.
Few if any media sources have actually reported that Apple plans to sell 55” and 65” ultra high definition television sets in 2016.
Following Icahn’s letter to CEO Tim Cook, The WSJ came out with an article that explained Apple “quietly shelved” plans to make a T.V. set more than a year ago after a decade of research.
Closer to reality, Icahn wrote in his open letter that he expects Apple to launch tiered products and services, including a “skinny bundle” of pay-tv channels that are partnered with various media companies in addition to an updated Apple TV micro console.
Since 2007 Apple has promoted Apple T.V., a set top box that allows viewers to stream video and access video content.
In early April, HBO launched exclusively on Apple T.V. a new standalone subscription service called HBO Now that offers on demand access to HBO’s lineup of video content.
A WSJ in March stated that Apple is in talks with programmers to offer a slimmed down bundle of T.V. networks later this fall that would include a service of about 25 channels, anchored by broadcasters such as ABC, CBS, and Fox.
ESPN and FX are also believed to be working with Apple’s new subscription service that is expected to cost between $30-40 per month.
Absent from the lineup is NBC Universal, owner of NBC broadcasting, due to a past falling out between Apple and Comcast Corp., which acquired NBC Universal in 2009.
Apple is expected to unveil its new Apple T.V. set top box at its annual Worldwide Developer’s Conference in June.
According to Buzzfeed News, Apple T.V. will be more Siri focused and have an improved hand held remote control.
Apple hasn’t introduced a new Apple TV set top box since 2012 and recently lowered the price of its current one from $99.00 to $69.00.