Tuesday, May 6, 2014

Apple to host iPhone upgrade event this week

Folks looking to purchase a new handset soon may be interested to hear that Apple is expected to host an iPhone upgrade event this week at its retail stores. The news comes from 9to5Mac, who says the company will begin emailing owners of older iPhones tomorrow, notifying them of the program.
According to the report, the move is part of a larger effort to boost handset sales and the promotion will kick-off on May 8th. The deal will be offered in a number of states across the US, and will ‘blend nicely’ with Apple’s retail store-based iPhone trade-in program it introduced in August of last year…
Here’s 9to5Mac’s Mark Gurman with more:
Apple is planning to hold an “enormous” iPhone-related event in its stores this week in order to boost sales, according to a source with knowledge of the initiative. Beginning May 8th, the source said, Apple will be contacting upgrade-eligible iPhone users with older iPhone models via email to come into their local Apple Store to update to a new iPhone 5s or iPhone 5c. [...]
Apple will brief Apple Retail management on the initiative tomorrow, according to the source. Additionally, Apple is said to be readying various other new marketing and sales initiatives to improve the sales of the iPhone in its retail stores.
There’s a growing sentiment in consumer electronics that the smartphone market has become too saturated, but Apple is showing no signs of slowing down. Last quarter, it sold 43.7 million handsets—a record for the 3-month period—and the larger, thinner ‘iPhone 6‘ is also expected to set precedent.
It’s unclear at this point what the ‘enormous iPhone-related event’ will entail, such as pricing and other details, but it’ll likely be in line with discounts from other retailers. Target, for instance, has the iPhone 5s starting at $119 with contract, and both Best Buy and RadioShack have the 16GB model for $99.
Also of note is that Angela Ahrendts officially took over as Apple’s new retail chief last week, and will likely be overseeing the program.

Talk about a signing bonus. After officially joining Apple last week, word got out today that Angela Ahrendts has already received 113 thousand units of restricted stock. At today’s prices—remember, APPL is back up around $600—the shares would be worth roughly $68 million.
This makes the company’s new SVP of retail and online stores one of the highest-paid executives in the industry, but of course, she’ll have to wait to cash in. According to a filing with the U.S. Securities and Exchange Commission, the full amount won’t be available until 2018…
MacRumors was first to spot the filing:
Ahrendts will receive shares spread over several different vesting periods between June 1, 2014 and June 14, 2018, assuming Ahrendts stays with the company. Were Apple’s share price to rise, the RSUs could potentially be worth significantly more over that time.
A restricted stock unit is a standard form of stock compensation that reward employees for staying with the company. They are used as general compensation and for employee retention. Each RSU converts to one share of stock on its vesting date, typically set annually based on award date.
There’s a few things worth mentioning here. For starters, once Ahrendts’ shares have vested, they’re eligible for dividend payout. So if all 113K shares were available today, with Apple paying $3.29 per share, per quarter, she would make roughly $1.4 million in just dividends per year.
Also keep in mind that Apple announced last month that it plans to continue to up dividends, and is going to split its stock in June. The 7-1 split will turn Ahrendts’ 113K restricted stock units into almost 800K shares, although technically it’ll still be worth the same amount of money.
Apple announced last October that it had hired Ahrendts, the former CEO of luxury clothing brand Burberry, to head its retail arm. Industry watchers have praised the company for the high-profile hire, given her impressive background and the trouble they’ve had at the position.