Apple Inc (AAPL) Stock Gains to Continue Without Smart Home System; iOS Revenue Higher Than Android

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A man looks at his Apple iPad in front an Apple logo outside an Apple store in downtown Shanghai
A man looks at his Apple iPad in front an Apple logo outside an Apple store in downtown Shanghai March 16, 2012. REUTERS/Aly Song

Apple Inc appears to be back on track in the stock market with analysts saying the company's stock will continue to gain even if Apple will not push through with the rumoured smart home automation system.

Since the company's earnings report more than a month ago, Apple's stock has climbed 18 per cent. The stock has gained ten times more in the S&P 500 with a big boost coming from Apple Inc's announcement of a stock split, bigger share buyback and dividends.

Piper Jaffray analyst Gene Munster believes Apple stock is not overvalued. In a CNBC report, he said he doesn't have an opinion regarding the company's rumoured launch of a smart home automation system using the iPhone. Munster said Apple's bigger-screened iPhone may justify the stock price.

He said Apple Inc has "a lot of important stuff" coming by the end of the year due to the company's spending on research and development. Munster added that it would be irrelevant if Apple will release the iPhone 6 with a bigger screen on June 2 or in December since everyone has been "waiting years for this."

The analyst said Apple has already made some significant investments and they would pay off for the company. According to reports, Apple has spent $14 billion on research and development since 2011. Previous data showed the Cupertino-based company spent only $8.1 billion between 2001 and 2010.

Analysts in Wall Street have increased their price target for Apple from below $600 to as high as $777 at Cantor Fitzgerald.  Apple's stock is still below its record-high of $705.07 on Sept 21, 2012.

If rumours are true, Apple will be taking on search giant Google Inc and Korean rival Samsung with the announcement of a smart home system on June 2 for the Worldwide Developer Conference  (WWDC) in San Francisco, California.

More revenue from iOS users

Meanwhile, mobile marketing firm Swrve, revealed that Apple's iOS generated more revenue than the Android OS. In the company's Mobile OS Report, iOS vs Android: Engagement, Retention & Monetization in Mobile Apps, Apple earns 45 per cent more revenue per iOS user while 10 per cent are more likely to make in-app purchases.

According to the report, the bigger revenue per user is attributed to the socio-economic divide between users of Apple's iOS and Android. Although Google's Play Store reported 45 per cent more downloads than Apple's App Store, the iPhone maker still earned 85 per cent more revenue than its competitor.

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