The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.



Apple Stock Prediction

Summary:

Apple’s management likes the high-margin revenue stream from the iPad Pro and its pricey accessories.

Noted Apple analyst Ming Chi Kuo is predicting that the fiscal 2018 (October 2017 to September 2018) versions of the iPad Pro will come with flexible AMOLED touchscreen displays.

A flexible or bendable version of a 12.9-inch iPad Pro is certainly a differentiating feature that could help it compete better with Microsoft’s Surface 2-in-1 computers.

The long-term future of the iPad Pro requires it to come up with unique features like bendable touchscreen displays to remain attractive.

Samsung’s flexible OLED display business could surge if it gets inside Apple’s tablets and phones. The rest of the industry will imitate Apple’s lead in adopting flexible OLED.

I Know First is currently bullish on AAPL.

I made it very clear last May that Apple (AAPL) likes the strong, high-margin revenue stream from the iPad Pro and its accessories. Protecting the iPad business is the reason why Apple keeps rejecting the idea of releasing touchscreen display-equipped MacBooks. My conviction is further reinforced by noted Apple analyst Ming Chi Kuo’s most recent prediction that Apple will supposedly release three new iPad Pro models next years.

Kuo said Apple will sell new 12.9-inch, 10.5-inch, and a low-cost 9.7-inch versions of the iPad Pro. Kuo is usually accurate with his Apple product pipeline speculations. We can safely deduce that Apple will really keep making non-touch friendly Macs. Apple simply wants to protect the high-margin iPad business. It is great for Apple’s continuing bottom line that it could get away selling the $99 Pencil and $169 Smart Keyboard for the iPad.

Innovating the iPad product line is very important to Apple’s future. This product segment still contribute more than $4.8 billion in quarterly revenue. If you also notice the chart below from Statista revealed that Q3 2016 showed a positive year-over-year growth in iPad revenue, $4.876 billion this year versus $4.538 billion last year.

This reversal in fortune is most likely due to introduction of the higher-margin but still affordable 9.7-inch iPad Pro. Cook noted that Apple’s Q3 2016 performance was buoyed by the 7% growth in quarterly iPad revenue. Furthermore, the more intriguing speculation of Kuo’s recent report is that Apple will allegedly release iPads with flexible AMOLED displays. Below is a screenshot from Kuo’s report of that future iOS tablets will come with flexible screen displays.

(Source: Ming Chi Kuo)

Flexible Tablets Are Convenient For Professionals And Students

I agree with Kuo’s assessment that releasing iPads with flexible displays that could be bent/closed like books to save space is a brilliant selling point. Coming up with a 12.9-inch $1,000++ iPad Pro that can be folded to fit inside jacket/vest pockets is a killer idea.

The pricey, ARM-based iPad Pro is competing for business customers who fell head over heels over Microsoft’s (MSFT) 2-in-1 laptop/tablet Surface products. Apple, therefore, needs the unique advantage of foldable displays to better position its high-end tablets against x86-based Windows Surface tablets. While the iPad Pro may never be able to run legacy Win32 apps of companies, the thought that it could be folded like a pocket-sized notebook is a compelling reason to buy it.

College students and working stiffs who love using their iPad for school and office tasks will appreciate the ability to downsize the space requirements of an Apple tablet.

Flexible OLED Display Technology Is Ready For Commercialization

Kuo estimates that foldable iPads could come as early as fiscal 2018 (October 2017 to September 2018). His timetable is feasible. Flexible OLED technology is already mature. Samsung first unveiled 4.5-inch flexible AMOLED screen six years ago. Samsung (SSNLF) is allegedly primed to release smartphones with flexible OLED displays next year. It was also previously reported that Samsung will supply 100 million 5.5-inch OLED displays for Apple’s iPhone models next year.

We could deduce that Samsung will also eventually offer its foldable OLED displays for Apple’s phone and tablet products. Samsung needs more OLED display supply business with Apple to recoup its multi-billion investment ($4.26 billion) on OLED screen manufacturing.

The expected surge in demand for Flexible OLED displays starting next year is one of the reasons why Samsung is aggressively expanding its display-making factories. Consequently, Samsung has a compelling motive to persuade Apple to adopt its foldable phone/tablet display technology. The flexible OLED display business can get a strong boost from Apple adopting bendable OLED displays.

The shift from flat touchscreen displays to flexible OLED will get adopted by OEMs if Apple starts doing so. Furthermore, it is not only Samsung that is being aggressive on this front. LG Display (LDL) is also investing $1.7 billion to fast-track its production of flexible OLED screens. The recent multi-billion investments on flexible OLED is a valid reason to believe Ming Chi Kuo’s speculation over Apple releasing iPads with flexible screens.

Apple’s pricey tablets, watches, and smartphones are ideal pioneer adopters for the emerging $20-billion (by year 2020) plastic and flexible AMOLED display industry. These bendable screen products aren’t going to be cheap. Apple, with its invidious ability to sell high-margin iPhones and iPads, is the ideal litmus test subject for flexible OLED screen-equipped phones/tablets.

(Source: I)

Conclusion

Samsung will not be the only one releasing commercial bendable phones/tablets next year. Apple is also most likely to use flexible OLED displays soon. Samsung knows that Apple has the elite brand power (and the millions of iLoyalists) to make flexible tablets and phones the new trend. Samsung will exploit Apple’s popularity to quickly accelerate the global shift from flat panel OLED to flexible OLED.

I am still long AAPL. I like how Apple is double-exploiting its loyal customers. Apple keeps innovating and selling pricey iPads as complementary products of its non-touchscreen Mac computers. Apple monetizes better when it keeps requiring people to buy a $799 iPad Pro, $99 Pencil, and $169 Smart Keyboard as companion gadgets for their $1,000+++ MacBooks.

My go-long endorsement of AAPL is also fortified by the stock’s positive near-term and long-term algorithmic forecasts. It is safe to buy more AAPL shares right now because I Know First’s deep-learning neural network of computers are predicting an upside market trend for Apple. Warren Buffett and his Berkshire Hathaway (BRK.A) people recently increased their Apple bet from $1.1 billion to $1.5 billion. We should trust Buffett’s legendary long-term wisdom.

Past I Know First Forecast Successes with AAPL

I Know First has been bullish on AAPL in the past and has seen excellent results . In past forecasts, such as the one dated May 17, 2016, the I Know First algorithm predicted AAPL will increase significantly. AAPL had an indicative signal strength of 86.37 and predictability ratio of 0.52. AAPL returned 16.97% during 3 months after the forecast was released.