Goldman Raises Apple's Price Target on 3G iPhone Launch 26 comments
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The launch of Apple Inc.’s (AAPL) 3G iPhone next month is yet another catalyst for a stock that often needs little reason to move sharply on any given day. And, Goldman Sachs is adding Apple to its Americas Conviction Buy list ahead of this development in order to capitalize on the upside potential from sharply higher projected iPhone sales in the second half of 2008.
Analyst David Bailey told clients that he continues to expect that Apple will beat its 10 million unit sales goal for 2008 (Goldman forecasts 11 million) on the back of broader global distribution, and the availability of third-party applications for the popular smart phone.
He said:
Our analysis shows that Apple will almost double its available subscriber base in calendar 2008 vs. 2007, with 100% of that growth coming from outside of the U.S. as Apple signs up carriers in more than 40 new countries in Europe, Asia, the Middle East, and Africa.This should keep Apple well ahead of the competition, Mr. Bailey added.
The analyst also expects Apple’s unit growth for its Mac computers will be three times that of the personal computer market this year. He raised his price target on Apple shares to $220 from $185, while maintaining a “buy” recommendation.
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You are failing to distinguish between the "cell phone" market, in which Apple barely registers, and the "smart phone" market, in which they are serious competitors, and may soon be dominating.
The smart phone market is much much smaller than the general cell phone market, but as we move into the future, the smart phone market is going to undergo tremendous growth. Apple's iPhone will be leading that growth. They may never rival the unit sales of the cell phone Giants, but in terms of revenue and/or profit, Apple is going to be very big.
Thompson
The high end cell phone market (smart phone if you are American) leads the mainstream cell phone market by 2 years, which itself leads the mass market (i.e., $50 handsets) by another 2 years.
iPhone is a great product (again, for Americans who are lagging seriously behind in high end cell phone adoptions), but it will not be a dominating force; usage model and life cycle differ greatly on a country-by-country basis. What has worked great in America will not translate to success in other countries especially for gadgets and gaming devices.
The high end cell phone market (smart phone if you are American) leads the mainstream cell phone market by 2 years, which itself leads the mass market (i.e., $50 handsets) by another 2 years.
iPhone is a great product (again, for Americans who are lagging seriously behind in high end cell phone adoptions), but it will not be a dominating force; usage model and life cycle differ greatly on a country-by-country basis. What has worked great in America will not translate to success in other countries especially for gadgets and gaming devices.
RIM's Blackberry will be under siege as an email device which doubles as a phone, and the other cell phone makers are just that (cell phone makers) and nothing else.
(Do you remember just 7 months ago when these same Apple WS Whore's had raised their target to $250 and Apple CRASHED over the the following 5 months to $129 in March!!)
technabob.com/blog/200.../
Wow. Talk about naive! You think Apple won't sell many iPhones in other countries? Mark my words... In two years time there will be tens of thousands of applications specifically for the iPhone. Hundreds of languages will be represented. You haven't begun to think about potential revenue this product poses for hundreds of companies around the globe. There will be no other product that can compete with the number of web-enabled applications for business, consumers and gamers. You'll see.
Other cell phones sell in large volumes only because of subsidies, and lower iPhone prices (if/when his happens) will be the result of carrier subsidies, not at the expense of Apple's revenue profit.
Some people just don't get it, nor do they understand the dynamics of the cell phone market place.
This summer Apple will ship the PocketMac to the planet, with only China, Japan, Russia, and Korea still unannounced. I've heard that Apple and the telecoms will charge the same or less for the new 3G product. Admittedly, many customers will stay loyal to the BlackBerry, but I don't see any great loyalty to any other brand.
So, let's see what might happen in shipments, given multiple PocketMac models:
2009 - 40M shipped
2010 - 100M
2011- 150M
I think Apple will do ok.
You've been hating on the IPHONE for a full year now... How's that apple short working out for you? (I'd imagine you made some money in Feb... good for you).
Personally, I'm just very excited to buy my first IPHONE in the coming weeks when the 3G version in announced. I had to hold off for the past year because I still was under contract with Verizon.... And I'd imagine there are MANY MANY people like me... I'll happily pay $600 for the new IPHONE if it's 32 GIG of memory and 3G.
Rumors are that AT&T is going to subsidize it this time around though... $200 off for 2 year contract. Not sure how this will effect Apple's deal with AT&T.. .but no matter what.. it'll translate to huge sales of IPHONES. The new SDK is looking amazing... nothing like its ease of use for the general consumer to install applications on any other cell phone.
I considered selling some apple stock to buy my IPHONE.. at this point i think i'll let it ride and buy the time the next version is released my stock gains will buy me a new one. That's the best thing about being an apple investor and apple product user... You never have to actually pay for an apple product.. if you use your apple profits to buy apple products. It's a sweet deal.
iPhone is going global & its going to go gangbusters for the next 3-5 years. People who badmouth Apple are really quite ignorant......
ever. What to do? How will I know if we are there yet?
Agreements with carriers such as Vodafone or France Telecom adds a huge number to TAM but doesn't translate to Apple iPhone's TAM. Or do you really believe all 60M of Vodafone Essar's subscribers can afford iPhone? Or all 31M of Claro's subscribers have access to 3G towers?
Reality check please. Not all markets mimics the structure, buying power and behavior of the good-o-homogeneous-USA... Western Europe didn't and chances of Turkey, Egypt, India or Brazil of behaving like US is pretty low.
Don't get me wrong; signing agreements with more carriers is good for Apple and the carriers, but it is certainly not going to pump up the TAM to some ridiculous number like 600M.