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Apple Inc.'s iPhone Event: Three Investing Experts on What Matters Most

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Is today's event a big deal to investors? Will we see another boring product upgrade? Here's what our contributors are watching for.

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After months of speculation, Apple (NASDAQ:AAPL) is finally holding its 2013 product launch event. New iPhones, including the 5S and the budget model 5C, are expected to be unveiled. Moreover, as Apple has made clear with its graphic media invitation to the event, which includes the slogan, "This should brighten everyone's day," the new iPhones, particularly the plastic 5C, will likely come in a wide array of colors.

Whatever it is that Apple unleashes upon the world, we'll know what it is in just a few short hours. Until then, here is commentary from tech investing experts on what to expect.

Avoiding the Google Complex
by Michael Comeau

The key for Apple to extend its recent gains is to bring back the magic of the good old days. All of Apple's recent product announcements have been mostly incremental in nature.

In terms of sheer excitement, the company hasn't really brought the thunder since 2010, which when it released the groundbreaking iPhone 4 and the iPad, the latter of which actually didn't seem all that exciting when it came out, at least for this guy.

Though to be fair, they've been building on some of the best products in the history of technology.

My main fear is that the company goes down the road of the Google (NASDAQ:GOOG) Android complex, which is destroying itself financially by fighting a pointless specifications war centered around screen sizes and processor speeds. The iPhone could probably use a slightly larger screen, but I hope the company doesn't put out some phablet-like colossus.

Michael Comeau edits Minyanville's Buzz & Banter and is also a regular columnist on Minyanville.com, focusing on technology and consumer stocks. Read more of his work for Minyanville here.

Michael Comeau has a position in AAPL.

The Devil Is in the Details
by Andre Mouton


Apple is expected to announce its budget smartphone today -- the iPhone 5C -- and investors should pay close attention to the features and the price. If there's a big feature gap between this model and the more expensive iPhone 5S, then Apple might be able to get away with a sub-$400 price tag. Otherwise, the risk of cannibalization will be high.

As it stands, for the last three quarters, the iPhone 4 and iPhone 4S have grabbed nearly half of Apple's total iPhone sales. Customers are already migrating away from the newest, most expensive model, and this development has weighed on earnings. Gross margins fell to 36% in the second quarter, from 42% a year earlier. Market share isn't Cupertino's only problem. The iPhone 5C is likely to be a double-edged sword that investors should treat with caution.

André Mouton is an independent investor who cut his teeth in the dot-com crash and chewed his lip in the financial crisis. He is a former writer for Offbeat Magazine in New Orleans and a touring (but not itinerant) musician, who now lives in New York. Read more of his work for Minyanville here.

This Is Just a Small Battle in a Long War
by Sean Udall

I could care less about what Apple releases today in the bigger scheme of things, and over the next three quarters, it won't matter.

The phones and/or products coming will be plenty good enough to sell a lot of units; the key should be what Apple is working on, what the comps are, what EPS will be, and what true innovation lies underneath the hood. Lastly, I'd also add that one of Steve Jobs' goals was to go thermonuclear on Google, and I think a plan has been put in place. And folks, that plan isn't about iPhones versus Android phones; they will only play a small part. (More on this subject to come in my Tech Strat Report.)

The important thing to do now is to focus on the algos (aka high-frequency trading computers) and the weak hands, in order to see how they react today and tomorrow. If they do something really stupid, like take eight to 10 points or greater out of the stock, I'll be looking for more long-sided entries.

In terms of trading, I'm moving my intermediate target to the $585 - $615 range. This time frame is in a two- to three-quarter window. Near term, I'm thinking the stock will be rangebound, but it could see a price as high as $525 or $535. I've moved my option targets to these ranges, but I'm mainly focusing on longer-dated options with strikes between $565 and $600. And I will be looking to increase exposure on these if the algos can attack the weak hands and force stops.

It seems like everyone is looking for -- and, in fact, is convinced of -- a sell-the-news reaction to Apple. Therefore, the odds of that occurring have been reduced and potentially eliminated.

Sean Udall is an investment strategist, portfolio manager and proprietary trader with extensive experience across a wide variety of asset classes, including equities, fixed income, currencies, and derivatives. He's a recognized trader, prolific writer, and the founder of the TechStrat Report, a technology-focused investment newsletter from Minyanville. Read more of Sean's commentary here.

Sean
Udall has positions in AAPL and GOOG.

Follow me on Twitter: @JoshWolonick and @Minyanville
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