Strong Mac, iPhone sales projected to propel Apple stock to $280
Stronger-than-expected Mac and iPhone sales in the last two quarters and the impending launch of the iPad have led Needham & Company to raise its price target on Apple stock to $280.
Analyst Charlie Wolf said in a note to investors Friday the increase from $235 is because the trajectory of Mac and iPhone sales were "materially higher" in the last two quarters than Needham had forecast. He also expects the iPad to make a "material contribution" to the company.
Another factor in Apple's projected success: its massive amount of cash. The company revealed during its last quarterly earnings conference call that it had $39.8 billion at the end of the December quarter, an increase of $5 billion from the previous quarter.
And while Mac sales have been strong, Wolf said they could become even better, because Apple is currently a small fish in a large pond. With just 4 percent of the total personal computer market, the iPhone and iPod "halo" effect could lead to significant growth for the Mac platform in 2010.
Wolf believes Mac shipments will hit 24.9 million units annually by 2019. This would represent a projected worldwide marketshare increase from 4 percent today to 4.4 percent in a decade.
He also said that Apple's share of the U.S. smartphone market would likely become "significantly higher" than 30 percent if Apple were to make a CDMA-capable model that could run on the Verizon network, the largest wireless provider in the U.S. Given overseas expansion, Wolf expects the iPhone will see its marketshare increase more internationally than in the U.S.
As for the iPad, Wolf sees great potential for it with existing iPhone and iPod touch users, and within the healthcare and education industries.
"Although the iPad could cannibalize some Mac sales, it has the potential to significantly increase Apple's share of the K-12 market," he wrote. "The iPad should also prove popular as an interactive textbook reader in the higher education market where there are 17 million students.
Wolf previously predicted that the iPad would sell 2 million in 2010, but he expects sales to increase sharply once a "catalyst" for sales emerges. That same catalyst for the iPod was the iTunes Music Store, while the iPhone's sales spark came from the App Store. Most on Wall Street expect the iPad to sell between 1 million and 5 million in its first year.
Wolf has forecast the iPad to sell a "likely conservative" 20 million annually in 10 years, contributing $9.93 earnings per share to Apple's value. But, he admitted, valuing the iPad is an "exercise in futility" as the hardware will not be on sale until the end of March.
Analyst Charlie Wolf said in a note to investors Friday the increase from $235 is because the trajectory of Mac and iPhone sales were "materially higher" in the last two quarters than Needham had forecast. He also expects the iPad to make a "material contribution" to the company.
Another factor in Apple's projected success: its massive amount of cash. The company revealed during its last quarterly earnings conference call that it had $39.8 billion at the end of the December quarter, an increase of $5 billion from the previous quarter.
And while Mac sales have been strong, Wolf said they could become even better, because Apple is currently a small fish in a large pond. With just 4 percent of the total personal computer market, the iPhone and iPod "halo" effect could lead to significant growth for the Mac platform in 2010.
Wolf believes Mac shipments will hit 24.9 million units annually by 2019. This would represent a projected worldwide marketshare increase from 4 percent today to 4.4 percent in a decade.
He also said that Apple's share of the U.S. smartphone market would likely become "significantly higher" than 30 percent if Apple were to make a CDMA-capable model that could run on the Verizon network, the largest wireless provider in the U.S. Given overseas expansion, Wolf expects the iPhone will see its marketshare increase more internationally than in the U.S.
As for the iPad, Wolf sees great potential for it with existing iPhone and iPod touch users, and within the healthcare and education industries.
"Although the iPad could cannibalize some Mac sales, it has the potential to significantly increase Apple's share of the K-12 market," he wrote. "The iPad should also prove popular as an interactive textbook reader in the higher education market where there are 17 million students.
Wolf previously predicted that the iPad would sell 2 million in 2010, but he expects sales to increase sharply once a "catalyst" for sales emerges. That same catalyst for the iPod was the iTunes Music Store, while the iPhone's sales spark came from the App Store. Most on Wall Street expect the iPad to sell between 1 million and 5 million in its first year.
Wolf has forecast the iPad to sell a "likely conservative" 20 million annually in 10 years, contributing $9.93 earnings per share to Apple's value. But, he admitted, valuing the iPad is an "exercise in futility" as the hardware will not be on sale until the end of March.
Comments
I doubt it will get that high.
I doubt it will be that low.
But, he admitted, valuing the iPad is an "exercise in futility" as the hardware will not be on sale until the end of March.
So by his own admission we can pretty much ignore him on iPad figures, then.
So by his own admission we can pretty much ignore him on iPad figures, then.
At least until it ships, yes.
"Although the iPad could cannibalize some Mac sales,
.
Yes, the iPad will cannibalize some Mac and iPod Touch Sales, but much more importantly, it will steal significant market share from M$, especially from the netbook category.
My bet is that Apple sell twice as many iPad's as they currently sell Mac's, within 5 years.
Are you saying it will bleed Mac sales?
And how long has it been under $200?
Wolf has forecast the iPad to sell a "likely conservative" 20 million annually in 10 years, contributing $9.93 earnings per share to Apple's value. But, he admitted, valuing the iPad is an "exercise in futility" as the hardware will not be on sale until the end of March.
You mean "....$9.93 earnings per share to Apple's aggregate EPS during this period." (Although the aggregate EPS is somewhat of a meaningless metric, that is the only comparison that makes sense).
$280 by when?
And how long has it been under $200?
1) February 30, 2011.
2) For almost its entire existence as a stock.
$280 by when?
And how long has it been under $200?
They were predicting it would be at 250-270 three months ago and all it has done is go down. As low as 192 in the last three months. Its still under 200 it will stay close to that if not lower. Apple is following the market trend and will continue to do so. Everyday the Nasdaq is up, Apple is up, everyday its down Apple follows.
1) February 30, 2011.
2) For almost its entire existence as a stock.
Apple stock like most are following the market. It has no chance to even come close to 280 in this market. Has nothing to do with Apple just the simple fact most stocks in this economy are following the daily/monthly market trend.
1) February 30, 2011.
2) For almost its entire existence as a stock.
OMG- you actually have a sense of humor?
Are you saying it will bleed Mac sales?
There will be cannibalisation, but the extra hype that the iPad creates will equate to even more mac sales. So it will cancel out.
eg a few of my friends will not bother buying a macbook and will instead choose an iPad
on the flip, the few remaining PC users that I know are now taking the plunge to Apple's ecosystem and buying an iPad. I have no doubt that once the tasty fruits have been savoured, a large percentage will go on to ditch their PC's altogether and buy mac.
There will be cannibalisation, but the extra hype that the iPad creates will equate to even more mac sales. So it will cancel out.
Those are some rosy colored glasses you are wearing this morning. That sounds more like $380.
There will be cannibalisation, but the extra hype that the iPad creates will equate to even more mac sales. So it will cancel out.
eg a few of my friends will not bother buying a macbook and will instead choose an iPad
on the flip, the few remaining PC users that I know are now taking the plunge to Apple's ecosystem and buying an iPad. I have no doubt that once the tasty fruits have been savoured, a large percentage will go on to ditch their PC's altogether and buy mac.
You are right.
I was originally considering a MacBook Air for home and on the go use. Now I'll get an iPad for mobile use, and get a Mac mini for home use. Both will cost me less than the MacBook Air.
eg a few of my friends will not bother buying a macbook and will instead choose an iPad
on the flip, the few remaining PC users that I know are now taking the plunge to Apple's ecosystem and buying an iPad. I have no doubt that once the tasty fruits have been savoured, a large percentage will go on to ditch their PC's altogether and buy mac.
You know, I've been thinking (no laughs please) and I think the iPad will do amazing business with those over 60 who aren't technologicaly inclined. You could buy your parents/granparents an iPad , pay for their 3G contract and they would be good to go. And once they can print easily from them it will be instoppable. Imagine the peer pressure in places like Florida.
You are right.
I was originally considering a MacBook Air for home and on the go use. Now I'll get an iPad for mobile use, and get a Mac mini for home use. Both will cost me less than the MacBook Air.
Will you get a 3G version?
Will you get a 3G version?
Yes.
And don't play on me that $30 * 24 = OMG it is expensive!
I would have gotten a 3G USB for the MacBook Air. I NEED on the go Internet.
You are right.
I was originally considering a MacBook Air for home and on the go use. Now I'll get an iPad for mobile use, and get a Mac mini for home use. Both will cost me less than the MacBook Air.
Do you feel an iPad will suit your needs if you were considering a Macbook Air? You are going from a product that is a fully functioning system to something that runs the iPhone OS. From a dual core system to something less powerful then a netbook. And from a 13.3 inch screen to a 9.7. Just to name a few differences. You also won't be able to multitask and depending on what iworks looks like for the iPad you might not even have a full version of an office suite.
Honestly just asking because that seem like a fairly big step down.