Apple gains 4% ahead of CES and a smart watch

CES 2013

If you are just shaking off the holiday headaches, just think of Apple. After taking a drubbing from Wall Street analysts worried about everything from the fiscal cliff to too few (or too many) sales of iDevices, the iPhone maker woke up this morning to its stock actually up. After rising 4 percent in early morning trading, AAPL shares remain positive. Why the better performance, after being jostled around like a visitor to Time Square on New Year’s Eve? Apparently, it has to do with next week’s CES and talk that Apple could create an iWatch…

After bowing out of MacWorld, the Consumer Electronics Show in January is the public’s first chance to learn what tech companies have up their sleeve. For Apple, the event might include what Piper Jaffray’s Gene Munster and others are calling a “smart wristwatch”.

Barron’s reports that Munster appears to have pledged to talk about something other than an impending iTV as part of his New Year’s resolutions. Instead, the high-profile Apple observer told investors Wednesday that an iWatch is likely in 2014 “or later”.

While we are unsure of the ultimate launch timing (likely 2014 or later), we believe that Apple will eventually introduce some type of wearable computing product.

AppleInsider reports Munster believes a smart watch combined with other wearable computing items, could replace the iPhone for simple tasks.

iWatch concept (Anders Kjellberg 006)

Elsewhere, Tavis McCourt, analyst with Raymond James, shaved $10 off his target price for Apple shares. In reducing his target to $690 from $700, McCourt due to something he calls “a faster supply ramp”.

Although he retains his “Outperform” rating on Apple shares, the analyst reduced his estimate for iPhone sales during the March quarter: 37 million units, down from 42 million. At the same time, he hiked his sales estimates for the December quarter to 48 million from 46 million.

iPad mini (Minimally Minimal 002, white, desk, Magic Mouse)

A clue: although he still views Apple’s “growth rate as slowing,” he continues to see “double-digit top line growth for the foreseeable future.”

Finally, another reason for the rosier outlook for Apple: Reports that the tech giant is moving its chip around, shifting production of the A6X processor from Samsung to Taiwan Semiconductor Manufacturing.

Now that the fiscall cliff worries are behind us (at least for a couple months) and we’ve survived both 2012 and the end-of-the-world, perhaps some sanity can return to financial forecasts which seemed to predict the end was near for Apple, no?