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Lately Apple (NASDAQ:AAPL) CEO Steve Jobs seems to live the words of the poet Maya Angelou, who penned, “...in diversity there is beauty and there is strength.” Recent data is suggesting that Apple is on the verge of breaking out in a major way. The Apple market share story begins with the reemergence of the Mac, in a recent interview Apple COO Tim Cook indicated that during fiscal 2007, Apple sold 7 million Mac computers; still just a fraction of the 260 million units market estimated by IDC. “The ceiling for the Mac’s is nowhere in sight," Cook said, "and frankly even if the market itself isn't growing, for us, switching windows users is an enormous opportunity."

Considering that every one percent market share gain is worth 1.48 billion in revenue, it is easy to see why investors are excited about the trend. According to data released on Wednesday from Gartner, Apple still holds less than 4% market share (www.appleinsider.com). The recent release of the ultra-thin MacBook Air seems to be getting Apple into the hard-to-reach business user segment.

According to Pacific Crest Securities analyst Andy Hargreaves "Macbook Air sales appear to be additive to total sales, rather than replacing Macbook Pro sales," he said. "We believe a new set of corporate customers make up a meaningful portion of MacBook Air buyers." NPD saw significant gains in notebook systems sales for Apple during February, sales rose 64 percent in units and 67 percent in revenues year over year. The significant barriers to entry in the computer industry should protect these high growth trends for the foreseeable future. These barriers cause trends to slowly develop but once they catch on, they surge ahead. CEO Steve Jobs feels this surge is about to kick in, "The Mac market share is going up every single quarter. We're growing four times faster than the industry. People are starting to pay a little more attention. We've helped it along. We put Intel processors in and we can run PC apps alongside Mac apps. We helped it along. But I think a lot of it is people have finally started to realize that they don't have to put up with Windows - that there is an alternative. I think nobody really thought about it that way before." In a separate interview on October 16, 2007 Jobs said "The question is, are we headed for a tipping point, it sometimes feels like that." Mac sales alone could take this stock to $300 in 2009.

The world cellular phone market rose by over 10% to reach 1.1 Billion phones sold in 2007. The iPhone took a 0.6% share according to the research of Strategy Analytics (www.switched.com). Piper Jaffray analyst Gene Munster forecasts iphone unit sales growing to 45 million in 2009. The lifestyle appeal of the iphone has caused the smartphone market to expand from business users to all users. Any one of the +100 million ipod owners are potential iphone owners as the halo effect expands from ipod now to iphone. Bank of America analyst Scott Craig also feels that current estimates of iphone sales are too conservative (www.appleinsider.com). He points out that for every million phones Apple sells it adds $400 million to the bottom line. By selling 45 million phones Apple would generate in excess of 5 billion in profit. To put that number in perspective, Apple’s fiscal 2007 net income generated 3.5 billion.

Keep in mind, 45 million phones would represent only a 4% stake in the world wide market. Cell phones represent another market with rigid barriers to entry. Apple is a more than a year ahead of the competition with the coming release of applications from the SDK developers; the operating system on the phone separates this product from all the rest. iphone sales alone could take this stock to $300 in 2009.

If these two growth stories are in their early developmental stages then the next phase is still in its infancy. After announcing that they have entered the movie rental business, Apple has caught the attention of current leaders Blockbuster (BBI) and Netfilix (NASDAQ:NFLX). The movie rental industry saw Netflix sell 1.25 billion in 2007 while Blockbuster generated revenue of 5.54 billion. I’ll bet those two companies are checking the iTunes movie rental progress everyday, I’m afraid we can see the writing on the wall as Apple methodically figures out the right tonic for the HD digital rental platform. Reviews thus far have been very positive (www.macsimumnews.com). It has also been rumored that itunes will expand its collection of games through itunes. PricewaterhouseCoopers released the report Global Entertainment and Media Outlook: 2007-2011 which estimates that the video game market will increase from $31.6 billion in 2006 to $48.9 billion in 2011. This makes video games the third-fastest-growing segment of the entertainment and media market. Apple is working on improving game compatibility with all of their products. The 150 million users of iTunes provide an effective advertising pool for these new movies and games. Movies and games alone could take this stock to $300 in 2009.

Are you starting to see a pattern here? Apple is the innovative leader in two gigantic markets with a third and forth on the way. This product diversity dominance positions Apple in uncharted territory. We have never seen a mature, large cap company with these kinds of growth prospects, and I haven’t even mentioned the ipod. Future growth might be limited since the ipod already dominates the MP3 market, but don’t forget they still have opportunities to grow through their partnerships with Nike and American Idol ("Apple Strikes Advertising Gold"), while continuing to expand internationally. The ipod has done its job and done it well. It planted the Apple seed to a new generation of users. 2009 will be the year that these seeds turn into significant market share gains. The market share story insulates Apple from typical consumer slowdown worries and gives investors conviction to buy and hold. To those investors who fear getting burned by high growth, I say Apple is not your average one hit wonder. Their diversity across product lines limits conventional high growth risk. Pre-3G iphone is a great time to enter a long position. During April and May I recommend averaging into this ‘best of all breeds’ company. There are too many catalysts too ignore. It might just take you to $300.

Disclosure: Author is building a position in AAPL.

Source: Apple to Experience Market Share Madness