Information technology (IT) products distributor, Tech Data Corp. (TECD - Analyst Report) recently launched a new mobile application known as accessTD, exclusively for Apple Inc.’s (AAPL - Analyst Report) iPhone, iPod touch and iPad.
Customers and resellers will be able to access the major features of techdata.com, Tech Data’s official website, through accessTD, including product searches, pricing and availability information, order tracking, quoting and ordering.
Currently, Apple users in the United States can access the new mobile application by downloading it from the App Store for free, by logging in through their techdata.com account. Tech Data is expected to launch the new application in Canada by next month.
The mobile application is expected to improve the distribution of Tech Data products to its resellers. We believe the new application will improve Tech Data’s competitive position and expand its reach going forward. Currently, Apple’s iPhone, iPod and iPad are some of the highest selling devices worldwide. Cumulatively, Apple sold approximately 75 million devices in fiscal 2011, ending September 30.
The new mobile application also reflects the growing importance of mobile commerce (M-Commerce). In the US, m-commerce revenues are expected to touch the $6.0 billion mark by the end of 2011 and are forecasted to reach $31 billion by 2016, according to Forrester Research. According to a survey by Forrester, 48% of US retailers had a mobile-optimized website; 35.0% had deployed an iPhone app; 15.0% deployed Google Inc.’s Android app and 15.0% had deployed an iPad app.
We expect the strong demand trend for IT to boost the company’s top-line growth going forward. Moreover, aggressive share repurchase will also drive earnings growth, in our view. However, increasing competition, industry wide pricing pressure and narrow margins will remain headwinds for Tech Data going forward.
We, maintain our long-term Neutral recommendation on the stock. Currently, the stock holds a Zacks #3 Rank, implying a short-term Hold rating.