Monday, September 29, 2014

How Will T-Mobile (TMUS) Stock React If Deutsche Telekom (DTEGY) Doesn't Sell It?

NEW YORK (TheStreet) -- T-Mobile U.S. Inc. (TMUS)  parent Deutsche Telekom (DTEGY) is considering whether or not to keep its investment in the cellphone network operator, as it believes the only company currently looking to purchase its stake in T-Mobile will not make an attractive offer, Reuters reports.

Iliad S.A. (ILIAY) , a France-based telecoms operator, has until the middle of October to decide if it will increase its bid of $33 per share for a 56.6% stake in T-Mobile, Reuters added.

Exiting the U.S. business would alter Deutsche Telekom's size and profile as the trend in the industry is to consolidate and bring together fixed and mobile services. T-Mobile accounts for one-third of Deutsche Telekom's sales and a fifth of its core profits, but has been dragging the company's cash flows down, Reuters said.

Must Read: Warren Buffett's 25 Favorite Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Deutsche Telekom is weighing a number of factors regarding the sale of its stake in the company, including the possibility of higher bids from satellite TV or cable companies. The company is also considering holding on to T-Mobile until late next year when a major auction of U.S. radio spectrum is completed, Reuters noted. T-Mobile has begun to post an increase in sales after several years of losses, and some at Deutsche Telekom are arguing that it should hold on to the business during a time of growth, sources told Reuters. T-Mobile stock is lower by 1.59% to $28.44 in after-hours trading on Friday. Separately, TheStreet Ratings team rates T-MOBILE US INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation: "We rate T-MOBILE US INC (TMUS) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet." You can view the full analysis from the report here: TMUS Ratings Report
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.  

Friday, September 26, 2014

Why pSivida (PSDV) Stock Is Soaring in After-Hours Trading Today

NEW YORK (TheStreet) -- Shares of pSivida  (PSDV)  soared 10.26% to $4.73 in after-hours trading Friday after the FDA approved the company's eye implant Iluvien.

The FDA approved Iluvien to treat diabetic macular edema (DME), a swelling on the back of the retina that can cause blindness should the condition become severe enough. Iluvien is an injectable implant, and its use involves placing a small cylindrical tube filled with a drug on the back of the eye where DME usually forms.

pSivida announced the FDA approval entitles it to receive a milestone payment of $25 million from Alimera Sciences (ALIM) , to which pSivida licensed Iluvien in February 2005. pSivida is also entitled to 20% of net profits from U.S. sales of Iluvien, which the company said should debut in early 2015.

Must Read: Warren Buffett's 25 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Iluvien is already approved in 10 European countries, including the U.K., France and Germany. Alimera also surged 18.78% to $5.85 in after-hours trading. PSDV Chart PSDV data by YCharts
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Monday, September 22, 2014

8 Areas Your Home Inspector Won't Inspect -- That You Must!

I think inspection day is exciting. It's an opportunity to spend an extended period of time in your new prospective house, exploring every nook, cranny, closet, and attic. You get to turn on all the faucets, and run each of the showers. You get to test all the appliances, and even peel back a corner of the wall-to-wall carpet to see if there is hardwood underneath.

What should be inspected? Everything. It's important to examine all areas of the home, including the exterior, interior, attic, basement, electric, plumbing, and heating and air systems. Faulty construction, improper electrical wiring, inefficient insulation, old heating, building permit violations, and other unseen problems can lead to expensive home repairs -- large and small. You and your inspector need to examine every square inch of the house -- from the electric garage door to the built-in microwave.

However, don't assume that if you hire a home inspector, he or she will be able to tell you absolutely everything you need to know about the house. They will cover almost everything, but you might have to fill in a few blanks. Home inspectors are very careful not to take on liability for issues that are outside their area of expertise, so there are certain areas that home inspectors will be hesitant to "sign off"on.

These are the areas that you will need to follow up on by hiring an additional inspector, whose expertise will give you the full picture:

Roof
Ask your inspector if he or she is certified to inspect the roof. Some inspectors are not, and you will need to call in a roof specialist to climb up there. Keep in mind that if you are doing an inspection in snowy weather, it may be very difficult to access and examine the roof. It may be possible to have a special provision that allows you to extend the inspection contingency specifically to accommodate the roof, in the hopes that the weather improves.

Chimney inspection
Your regular inspector may not do this, but if there is any question about stability or hints of structural damage, have a chimney specialist do a "chimney cam" and run a small video camera down the chimney to see it from the inside.

Geological inspection
Another specialized inspection, especially for hillside and cliffside properties, or in flood areas, a geological inspection can unearth a severe drainage or ground-shifting problem—and save you thousands from further damage.

Sewer inspection
Your inspector may tell whether or not things are " flowing." However, a sewer expert can use a "sewer cam" to discover cracks or breaks in the sewer line from the house to the street -- especially on properties that are heavily landscaped, where root growth can crack and clog the pipeline. This can be a serious expense, so find out now. Trust me, this inspection is worth its weight in gold. A sewer line replacement can be an enormous expense.

Termite inspection
This is usually done by the seller, because most mortgage companies and banks will need it prior to allowing a loan on the house. But whoever does it, make sure you review the finished report and all the recommended work is taken care of.

Moisture, mold, and toxins inspection
It's important to check for moisture in any basement or below-ground-level areas. Moisture is an indicator of the potential for a mold problem -- if there isn't one already. You'll want to make sure your house has a clean bill of mold heath, especially in wet and seaside areas.

Asbestos
You need this if the house was built prior to 1975. You may find it on insulation around ducting, water heaters, and pipes. If it is accessible and can be removed by an asbestos specialist, then maybe this is something you might want to ask the seller to do.

Nonconforming use
This is an area that may not come under any specific additional inspector. But your home inspector may not be the final word. This will be a joint effort with your inspector and your real estate agent to determine if all additions and major changes have been permitted and signed off on by the city. Converted garages, sun porches, or add-on bedrooms can increase square footage, but when done without permits, they can also add headaches when it's time to make them legal.

This article originally appeared on Trulia.com.

Top dividend stocks for the next decade
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Sunday, September 21, 2014

7 things Alibaba users can do

Who is Jack Ma?   Who is Jack Ma? HONG KONG (CNNMoney) Alibaba is hurtling towards an IPO that could be the biggest in history. But what does the tech juggernaut with a name plucked from Arabian Nights actually do?

The simple answer is that Alibaba dominates online shopping in China. But the company founded by Jack Ma, a former English teacher, does so much more -- with tentacles extending into nearly every aspect of life in China.

Here are seven services the company offers consumers in its home market:

1. Shop: Alibaba's biggest cash cow is Taobao, the largest online marketplace with 8.4 million active sellers each year. Taobao means "search for treasure" in Chinese, and pretty much anything can be bought on the site, including shoes, electronics, drones and boyfriends for hire.

2. Shop some more: While most sellers on Taobao are small businesses, big brands are found on Tmall, a marketplace Alibaba launched in 2008. Retailers including Apple (AAPL, Tech30), Gap (GPS), Marks & Spencer, Esprit (ESHDF) and Burberry (BURBY) all operate storefronts on the website.

Taobao and Tmall form the heart of the Alibaba empire. They connect sellers with 279 million shoppers and sales hit almost $300 billion in the year ended June.

3. Dinner and a movie: But wait, there's more! The Taobao app allows Chinese consumers to make a dinner reservation, book a taxi or buy movie tickets -- with every transaction completed via smartphone.

4. Navigate the world: Alibaba recently snapped up AutoNavi, China's answer to Google Maps. It's another part of Alibaba's rapidly expanding mobile portfolio.

5. Ship products anywhere, anytime: Alibaba owns 48% of China Smart Logistics, a joint venture formed with local logistics companies. The network consists of more than 1,800 distribution centers and nearly 100,000 delivery stations.

6. Pay for stuff: How do Chinese consumers pay for all the stuff they're buying through Alibaba? They use Alipay, a service that processes the vast majority of transactions made on Alibaba's shopping marketplaces and mobile apps.

While it plays a major role in Alibaba's network, Alipay's ownership structure makes it more of a corporate cousin and it won't be included in the IPO.

7: Invest: Another affiliated business is Yu'e bao, a money market fund run by Alipay. Consumers are able to make deposits via smartphone, and return! s are dramatically higher than what's on offer at traditional state-run banks. The fund has attracted tens of million of dollars in deposits.

As if e-commerce, payment processing, financial services, logistics, mapping and mobile apps weren't enough, Alibaba is quickly expanding into new areas. The company is pouring dollars into entertainment and sports, recently acquiring media companies and a soccer team in a pre-IPO buying spree.

Will investors reward Alibaba's ambition? Jack Ma will find out when shares begin trading later this month.

Saturday, September 20, 2014

Technical Update: How Far Can Crude Oil Fall?

Related CL Strong Dollar, Weak Demand And Big Supplies Combining To Crush The Crude Oil Bulls Thursday's Selling Momentum Continues Into Friday Know Before the Bell: USPS Loses $2B and Toothpaste Ingredient Tied to Cancer (Fox Business)

The weekly chart of crude oil is highlighted this week to get an idea of the possibilities in terms of its major trend.

Recently, whether it is because of the rising U.S. dollar or rising inventories due to new fracking technologies, crude oil has been under major selling pressure. Even when potential upside catalysts like geopolitical tensions have surfaced, crude has failed to make any significant progress on the upside.

The weekly chart of crude tells technicians that the commodity may either be in a wave "c" of "abc" move to the downside with a target of the 2012 low at $75.05 or in the early stages of wave "(iii)" to the downside with targets in the $50s-$60s.

Either way, the technicians note that there seems to be plenty of downside action left in crude oil in the longer-term. In the shorter term, however, the next two mile-markers on the downside are $88.14 and $86.13 (from about $91.40 Friday).

Traders are likely to keep a "sell the rips" mentality in place when it comes to crude oil until further notice. What that means is that any rally in crude that takes the %R and/or RSI indicators to overbought readings on the daily chart will be triggers for them to look for entry points on the short side. The nearest such entry points appear to come in at either $92.43 or $93.97 right now, according to technicians.

Stock chart:  Stock chart

Posted-In: Short Ideas Futures Technicals Commodities Markets Trading Ideas

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Thursday, September 18, 2014

Don’t Fear the Fed: Dow Industrials Jump 100 Points, Hit All-Time High

Yesterday, a slightly more hawkish Fed caused stocks to pull back from their intraday highs. Today, all worries were set aside, as the S&P 500 and the Dow Jones Industrial Average hat their highest levels ever.

Bloomberg

The S&P 500 rose 0.5% to 2,011.36–an all-time high–while the Dow Jones Industrial Average gained 109 points, or 0.6%, to 17,265.99, also a record. The Nasdaq Composite advanced 0.7% to 4,593.43, while the small-company Russell 2000 finished up 0.5% at 1,159.27.

Of note today: Jobless claims fell to 280,000, their second-lowest level in 14 years, while the Philly Fed index showed an increase in plans to hire and future orders, even as the overall index fell.

ISI Group’s Dennis DeBusschere and Brian Herlihy think solid economic data will trump fear of the Fed:

We are solidly in the camp that views changes in Fed policy, barring something completely unexpected (sudden rate hike, significant shift in inflation or funds rate projections, etc.) as less important to markets today than at any time in the recent past. With QE winding down in the U.S., likely just about to get started in the Europe and China continuing its targeted stimulus programs, the world remains awash in available credit and facing low though likely increasing borrowing costs. The real question for investors going forward is how growth evolves from here and what that means for earnings and, to a lesser extent, risk appetites.

JPMorgan’s Jason Hunter sees no signs that the bull market is running out of steam:

The longer term view stays intact. Now more than five years into the rally from the 666 March 2009 low, there is no sign of a broad distribution pattern that would suggest the bull market is faltering. Within that advance, there have been multiple periods of trend deceleration similar to the current setup. Those periods saw higher frequencies of near-term pullbacks, a dynamic that we think could unfold into 2015…

Even if the cyclical rally continues to lose bullish momentum, the chart lacks a clear multi-month distribution pattern that would indicate a major trend change is imminent. Until that pattern forms, 5-10% corrections should be viewed as opportunities to add to core long exposure.

No sign of that now.

Friday, September 12, 2014

Here's Why Restoration Hardware Holding's Inc's Growth Is Here to Stay

Restoration Hardware (NYSE: RH  ) reported earnings recently and its revenue growth showed a significant deceleration in comparison to what investors have come to expect. Nonetheless, for investors with a long-term outlook, Restoration Hardware has a plan in place to keep growth robust, thus allowing for long-term stock gains.

Its past growth is undeniable
Restoration Hardware is luxury to the core, vintage yet modern timeless designs, selling home improvement furniture and goods created by hundreds of small and medium-sized vendors who sell specifically to Restoration Hardware.

Albeit, Restoration Hardware's stock traded lower on Thursday after quarterly earnings revealed that revenue growth decelerated from prior quarters. In the second quarter, comparable sales increased just 13% year over year, which represents a significant slow-down from what investors are used to seeing, such as 20% to 30% comparable growth over the last two years. Nonetheless, when compared to other home improvement retailers, Restoration Hardware's growth is undeniable.

To explain, Restoration Hardware's most recent quarter's comparable sales growth can be seen below, compared to home improvement competitors Lumber Liquidators (NYSE: LL  ) , Home Depot (NYSE: HD  ) , and Lowe's Companies (NYSE: LOW  ) . In addition to the single-quarter performance, the same period for the previous two years is also included, further illustrating the degree of growth for Restoration Hardware long term.

Quarter/Year

Restoration Hardware

Lumber Liquidators

Lowe's

Home Depot

Q2/2014

13%

(7.1%)

4.4 %

5.8 %

Q2/2013

30%

14.9%

9.6 %

10.7 %

Q2/2012

31%

12.4%

(0.4 %)

2.1%

Understanding comparable versus overall sales growth
It's important to understand the difference between comparable sales and revenue growth to get an idea of just how well Restoration Hardware has performed.

As for overall revenue growth, it is the difference in revenue from one year to the next. However, comparable sales growth only tracks stores that have been operational longer than 12 months. Then, revenue from those stores are compared to the same period in the year prior. The difference, whether it be gains or losses, is what creates comparable sales. In other words, if a company has higher comparable sales year over year, then customers are spending more money, or the company is attracting new customers into those existing stores.

Thus, Restoration Hardware's comparable stores increased 13% during the second quarter on top of 30% growth in 2013, which was then on top of 31% growth in 2012. That's impressive!

Restoration Hardware's growth is here to stay
With that said, 20% to 30% comparable sales growth might very well be a thing of the past for Restoration Hardware, given its 12% increase during the last quarter. However, investors should keep in mind that the opportunity for overall revenue growth is still very much present. Notably, during the company's impressive growth years, it has not expanded its total number of stores. Its store count has stayed right around 70.

Therefore, Restoration Hardware is yet to earn new revenue by increasing its store count. Instead, Restoration Hardware has renovated, closed, and reopened some of its key locations, testing a new concept of megastores that it calls Full Line Design Gallerias.

Last year, Restoration Hardware renovated its New York Gallery, taking its square footage from 10,000 to 30,000. It also replaced the Boston store after renovating the old New England Museum of Natural History, which is now a 40,000 square foot Gallery. 

But, after two years of renovating, Restoration Hardware is finally expanding, which was reported following its fiscal 2013 earnings. Back in March, the company's CEO Gary Freidman said, "we will open new Galleries in Greenwich [Conn.], Los Angeles, and our first next generation Full Line Design Gallery in Atlanta." He also added that Restoration Hardware had signed five additional leases for Full-Line Design Galleries and was negotiating for another 25 locations.

After the company's most recent quarter, Friedman said that the Atlanta and Los Angeles galleries will soon open, that it has signed three additional leases, now eight total, and that the company is now negotiating for 30 additional locations, up from 25.

Therefore, Restoration Hardware will increase its total store count by 50% over the next few years, all of which will be Full-Line concepts that are built to look like a showroom of the company's best products. In other words, Restoration Hardware's comparable-sales growth may be slowing after three years of explosive performance, but it should get a boost from significantly expanding its square footage via additional galleries in new markets. Hence, Restoration Hardware's growth days are far from over.

Foolish thoughts
Restoration Hardware finished its fiscal 2014 year with revenue of $1.5 billion and an operating margin of 3.5%. According to Freidman, once the company's expansion program is complete, and all Galleries reach their full potential, Restoration Hardware will become a company with $4 to $5 billion in North American sales and an operating margin in the mid-teens.

Then Restoration Hardware might eventually expand internationally. Therefore, given its long-term growth outlook, and its opportunity to become even more noticeable through expansion in the luxury home improvement space, Restoration Hardware remains a solid investment opportunity whose growth is here to stay.

The real winner is inside the Apple Watch (warning, it may shock you)
Apple recently revealed the product of its secret-development "dream team" -- Apple Watch. The secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see where the real money is to be made, just click here!

Tuesday, September 9, 2014

GE Finally Strikes the Chord With Electrolux

General Electric (GE) has ultimately decided to sell its Appliances unit to one of the bidders – the Swedish consumer durables company, Electrolux (ELUXY) for a cash deal of around $3.3 billion. GE is exiting the kitchen floor to focus completely on its core industrial business segments. And Electrolux is hoping to add popularity to its brand name through this latest acquisition. This deal will combine Electrolux's Frigidaire; one of the best known brands for refrigerators with GE's stable of products including the monogram line of luxury appliances. So, let's dive into the details of the Electrolux-GE deal for further understanding.

Inside the deal

General Electric, which commercialized the electric toaster and the self-cleaning oven, is spinning off the Appliances unit to Electrolux with the motive of reframing the company as a core industrial company. The shift is the work of Chief Executive Jeff Immelt, who wants to turn GE into a high-tech infrastructure company. The management of GE is interested in reaping nearly 75% of their earnings from the industrial businesses by 2016, while becoming less reliant on the Appliances section.

As GE's CEO wants to sever all ties with middle-class American consumers, the sell-off to Electrolux is expected to get completed by end of 2015. However, Electrolux has signed an agreement with GE for continuing usage of GE appliances brand name for a term of around 40 years, for which it would be paying an annual royalty fee.

This deal is, however, still subject to regulatory approval and carries a $175 million termination fee if Electrolux fails to win regulatory approval.

The Electrolux-GE agreement also includes selling off the 48.4% stake of GE Appliances in Mexican appliance maker Mabe, which has aided to develop and manufacture GE appliances through a joint venture for almost 30 years.

Electrolux emerges the final winner

Soon after the acquisition news hit the market yesterday, Electrolux shares rose by 5.1%. Analysts have opined that this latest move by Electrolux will give it more exposure to the premium appliance segment in the U.S. and will help to pull up its revenue after the amalgamation is completed since the U.S. economy is in a revival phase in terms of consumer spending power.

Last year, Electrolux, already one of the world's largest manufacturers of home appliances and industrial appliances, posted revenue of about $15 billion, while GE Appliances generated revenue of around $5.7 billion during the same period. Sales of major appliances in North America accounted for nearly 29% of Electrolux's revenue for the year.

Now, if GE Appliances and Electrolux sales were combined for the previous year, sales in North America would have accounted for about 47% of the latter's revenue. And the best part for Electrolux is that this acquisition could place it at par with the market honcho, Whirlpool Corporation (WHR), which posted revenue of $18 billion last year.

Thus this acquisition of GE Appliances represents a major opportunity for Electrolux to expand its business in North America, one of the largest markets for home appliances. Electrolux CEO, Keith R McLoughlin said, "We think its transformational for us." He stated that by nearly doubling the North American business through this venture, it would offer stronger purchasing power in negotiations with suppliers.

The company even expects to achieve a yearly cost savings close to $300 million, if the transaction finally gets a green signal during the regulatory approval phases.

To conclude

The deal marks the end of the era for GE as a household name as the company looks eager to eliminate its ties with its iconic business division- one that gave birth to the washing machine and the dryer and the toaster oven. And it is the largest ever transaction for Electrolux, which began as a maker of vacuum cleaners in 1910 and then expanded into home appliances in 1920. So, let's stay tuned to find out how this major transformation affects Electrolux in the long-run and how GE adapts to the change in business approach down the years. But as of now, the deal is yet to pass through a series of approvals and there might be something new to catch upon within the stipulated timeframe set for the acquisition. Let's keep watching!

Currently 4.00/51

Thursday, September 4, 2014

Is Apple's Supply Chain a Risk to the Company?

Apple CEO Tim Cook. Source: Wikimedia Commons.

If the rumors are to be believed, Apple's (NASDAQ: AAPL  ) newest product, the iWatch, will be announced at its Sept. 9 event but possibly won't ship until 2015 because of supply chain issues. This was originally reported by Apple analyst Ming-Chi Kuo, and subsequent memos have pushed back the launch date from October to early next year.

Kuo has a pretty good track record on these things. Based on a thorough analysis of Apple's supply chain, he has been relatively accurate on delays. In fact, he predicted Apple's iPad Mini with Retina display delay in 2013. In addition, he predicts a delay in Apple's larger-size version of its newest iteration -- the iPhone 6, a 5.5-inch "phablet" model -- pushing the release date for that unit back to 2015 as well.

So if two of Apple's three products for this event are delayed, coupled with the iPad Mini Retina last year, does this mean Apple's supply chain presents a risk of sorts to the company?

Supply chains are more difficult than they appear
Most consumers are relatively unaware of supply chains, but let's not understate their importance. Simply put, supply chain management is the process of logistics -- how to create value by moving raw materials to finished products to customer delivery. And while it seems rather boring, and in some ways it is, supply chain management can add value or destroy it.

A slightly ironic point is that these issues seemed to crop up after Tim Cook took the reins. Widely considered a "supply chain maven" among the analyst crowd, Cook started his Apple career as a senior vice president for worldwide operations. Through a relentless focus, he quickly fixed the supply chain, eliminating lags from months to days. Cook was promoted to chief operating officer before becoming the company CEO in the wake of Steve Jobs' declining health.

The issue with revolutionary products ...
Compounding Apple's supply chain problems is its visionary product line. That's a constant issue with revolutionary products -- nobody else has combined these products in the same way before, so the raw materials and work-in-progress inventory processes need to be updated.

It appears there is generally a similar sticking point when it comes to recent supply chain hiccups with displays, especially when combined with a new form factor and new technologies. Apple's iPad Mini Retina combined a new, smaller form factor for its iPad line with the improved and updated Retina display. In addition, reports blame issues with the display/touch-panel interaction for the holdup with the larger, "phablet-like," version of the iPhone 6 and its sapphire cover lens for the iWatch.

Is this a concern for Apple investors?
There's not enough here for long-term investors to be overly concerned with. Even if the rumors are true, Apple appears to be on track to release its 4.7-inch iPhone on schedule. Look for that model to sell briskly during the North American seasonally heavy quarter, like all prior iterations.

The 5.5-inch phablet unit should do well in the Asia-Pacific region, where phablets are more popular and the holiday season isn't as important to move units -- therefore, the delay isn't as important. The short-term risk is that there will be holdouts for the 5.5-inch model in the U.S., but the phablet (defined as 5 inches and above) form factor isn't as popular here, and this is only a short-term concern.

As far as the smartwatch is concerned, this is incremental revenue and profit. Therefore, these expectations don't appear to be valued into the stock. That hasn't stopped a few analysts from attempting to model -- Morgan Stanley's Katy Huberty anticipated between 30 million and 60 million units in its first 12 months of sales at a price of $300 apiece. However, subsequent reports peg the average selling price at $400 per unit.

Final thoughts
As an investor, you'd like for your company to have as few delays as possible. With that being said, long-term investors should give Apple a pass here. As Apple continues to bring new and exciting technologies to its products, at times there will be delays in both supply and manufacturing processes. In addition, Apple's going to take its time bringing a cohesive, end-user-focused, product to market. It isn't always fast, but it's worth waiting for.

Leaked: Apple's next smart device (warning -- it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

How NVIDIA Corporation Plans to Grab a Piece of This $12 Billion Market

According to graphics chip-maker NVIDIA (NASDAQ: NVDA  ) , the market for games sold on Google's (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) popular Android platform will be worth $12 billion by the end of 2016. Although NVIDIA doesn't sell games directly to end users, it does hope to capitalize on this booming industry through the sale of performance-oriented mobile processors as well as other gaming-related hardware.

A two-pronged approach
NVIDIA has a long history as a graphics chip designer. It, along with longtime rival Advanced Micro Devices (NYSE: AMD  ) , designs powerful graphics processors that go into consumer PCs, professional workstations, and even supercomputers.

However, in order to capitalize on the smartphone and tablet opportunities from a chip perspective, NVIDIA can't just sell stand-alone graphics processors -- it needs to provide highly integrated processors (known as "systems-on-chip") in order to be successful in the ultra-mobile device market.

Such chips integrate a host of sub-components, which include central processing units, graphics processors, dedicated video and image processors, and, in some cases, even cellular modems. NVIDIA's line of such products is sold under the "Tegra" brand.

In addition to offering mobile processors to third-party device vendors, the company has also been designing and selling its own gaming-oriented mobile computing devices (powered by its Tegra processors). To date, the company has released a handheld gaming device known as Shield Portable and a gaming-oriented tablet known as the Shield Tablet.

There's some interesting stuff going on here, so let's take a closer look.

A focus on performance with Tegra
NVIDIA's strategy with Tegra has evolved over time. Initially, the company appeared very interested in going after a large part of the mobile market, gunning for premium devices (tablets and higher-end phones) with one line of processors and for more mainstream smartphones with another.

However, according to Jen-Hsun Huang in an interview with CNET, NVIDIA's experience with its mainstream-focused Tegra 4i platform taught the company a valuable lesson. 

"I think that for mainstream phones, there's one strategy that really works right now, which is price. That's not our differentiator," Huang said.

So, what exactly is NVIDIA's differentiator?

"[O]ur phone and device strategy is to focus on performance-oriented devices -- devices where performance and differentiation matter" said Nick Stam, senior director of technical marketing for NVIDIA in an email exchange. "[W]e partner with people that are looking for that performance differentiation and coolness factor."

Does Tegra K1 measure up?
NVIDIA's latest mobile processor is known as the Tegra K1, and it has shown up in a couple of performance-focused devices so far: the Xiaomi MiPad and NVIDIA's own Shield Tablet. Does it live up to the company's claims?

According to AnandTech, "the Tegra K1 is easily the fastest in all of [its] GPU benchmarks."

In a follow up piece, AnandTech noted that the Tegra K1 "delivers immense amounts of performance when necessary, but manages to sustain low temperatures and long battery life when it isn't."

Additionally, in my exchange with Stam, I raised the question of whether the Tegra K1 -- which has yet to show up in a commercially available smartphone -- could potentially power smartphones.

"Tegra K1 can deliver the best performance in a superphone power budget," Stam replied, presumably referring to larger-screen devices like the Xiaomi Mi3 (which comes with a 5-inch 1920-by-1080 display).

The second part of the equation: Shield
While NVIDIA still supplies Tegra processors to third-party device vendors, it has also begun to design and sell its own Tegra-powered devices under the "Shield" branding.

Last year, the company released a product known as the Shield Portable -- a handheld, Android-based gaming device. This year, NVIDIA followed that up with an 8-inch tablet known as the Shield Tablet. According to Stam, these Shield-branded products are intended to "leverage Android and build a gaming platform out of it."

While the company doesn't explicitly break out Shield revenue, the original Shield portable didn't do much to stop the 48% year-over-year decline in NVIDIA's Tegra revenue in fiscal 2014. However, the Shield tablet may fare better as it is, in the words of Engadget, "a solid, worthwhile 8-inch Android tablet in its own right, and it happens to have a host of novel features, to boot."

Though the company's Tegra business doing much better this year (up 35% and 200% year-over-year during the first two quarters of fiscal 2015), it's not yet clear how much of the company's Tegra revenue will come from device sales against more traditional chip sales. Nevertheless, if the Shield products turn out to generate material revenue, the company could choose to break out those sales numbers later on.

Foolish bottom line
Though NVIDIA's strategy to address the mobile gaming market has evolved markedly over time, it's clear that the goal is to try to compete in markets where its experience in developing gaming-oriented products will be valuable.

If there really is a market for, as Stam puts it, for "gamers that also want a tablet," NVIDIA seems well-positioned to capitalize on that demand with Tegra and Shield. Investors will likely get a much better picture of what this opportunity could ultimately amount to as the next 12-18 months play out. 

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