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Apple Watch Not the Next Catalyst for Apple Inc. (AAPL)

Record profits by Apple Inc. (NASDAQ:AAPL) in the fourth quarter was down to the company selling millions of units in China, but the newest addition to the family, Apple Watch, could face a  tough run according to Reuters. CNBC’s Melissa Lee notes the hefty price tag as well as the Chinese population lagging behind on the use of personal health-related tech as Americans, could weigh in on the company shipping more units as it would have loved.

Apple, is AAPL a good stock to buy, luxury watches, Apple Watch, Stephen Pulvirent

It is still too early to speculate whether Apple Watch will command the must have cachet with millions of people in China as was the case with iPhone 6. The cheapest of the model is to go on sale for 3,000 Yuan or $479 versus $349 in the U.S. with the top end going for $145,000 Yuan (23,157) compared to the $17,000 in the U.S.

Karen Finerman maintains it is too early to judge Apple Inc. (NASDAQ:AAPL) on the Apple Watch as it is not yet clear what it is all about and its abilities. At the annual shareholders meeting after the Apple Watch event, there were suggestions that the company should buy Tesla Motors Inc. (NASDAQ:TSLA) suggestions that Finerman believe are out of order.

“It seems totally bizarre; it seems like a terrible idea in terms of capital allocation as an Apple Inc. (NASDAQ:AAPL) shareholder. I would be quite distressed if they were to do that even if they could afford it, which they can. I do think the idea of some kind of collaboration on car play or whatever they would there is probably a lot of things they could collaborate on. But a merger that would be absolutely ridiculous,” said Mrs. Finerman.

Pete Najarian is long on Apple Inc. (NASDAQ:AAPL) but with huge reservations on Apple Watch as the product to take Apple to the next level. Reiterating the PC unit remains more important having been shipping more units for the longest time, and with the unveiling of a new Mac book, its prospects should be brighter.

Cash returns, on the other hand, should be a key driver for the stock according to Dan Nathan, having been increasing since unveiling in 2012. Apple Inc. (NASDAQ:AAPL) started with cash returns of $45 billion in 2012 which doubled to $90 billion in 2013 and $130 billion in 2014. The analyst, however, remains skeptical on the company initiating a $200 billion buyback that is being pushed by Carl Icahn.

“If you are expecting that $200 billion number that Mr. Icahn has put out there you are not going to get it, you know why? They only have about $30 billion in cash in the U.S. They are going to have to continue to raise debt to fund their buybacks here. So I think that has the potential in the last week of April or so to disappoint investors if you are expecting some massive upgrades to that number,” said Mr. Nathan.

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