Apple Aims for the Fences with its $199 iPhone

Apple's (AAPL) Annual Worldwide Developer Conference is typical fanfare for just that, Developers, but this year, all eyes were focused on the iPhone, both device and software platform. Steve Jobs took the stage with typical Jobsian fanfare and proceeded to showcase the future of the mobile development platform. Eager gadget connoisseurs, Apple fanatics and casual observers have been known to be caught up in The Steve's Aura, and while the typical WWDC is geared toward the most technically proficient computer folk, the rabid waiting for a faster iPhone had to come to a head at some point.

That time was now, as Jobs showed off a sleeker 3G+GPS iPhone that will be available in 22 countries come July, with an additional 48 Countries seeing the device later in the year. The remarkable thing was not the expected iPhone announcement, the remarkable thing was the price. $199 for the 8GB model with a 2 year contract. It's a price point the mass market was waiting for, and should spur incredible demand for the must-have product. Apple's goal of 10Million units sold by the end of the year, seems ever closer now, and as Apple's shares dip to the $180 mark, it moves the company from "attractive valuation" closer to "is it really this cheap?" levels.

Not only is the 3G, GPS equipped iPhone coming, it is bringing with it the Application Store and open Software Development Kit. Apple showed off several applications at tthe event and plenty more can be expected as the days roll off the calendar. Reporters of all shapes and sizes, in publications both big and small, are clamouring over the new "open" iPhone and the possibilities that the SDK promises, hailing the device and the platform as the next wave in computing.

While customers of iPhones and iPod Touches will undoubtedly be happy with the new selection of applications for their devices, Apple also stands to gain plenty keeping a 30% cut of all sales from the App Store. With a few games shown off today priced at $9.99 it stands to reason, the App Store will give Apple another supplemental Revenue and Profit stream.

While 3G and GPS were the two things consumers were clamouring for in the iPhone update, business users wanted the device to be secure, sync with their offices and provide full enterprise support & functionality. With the newest iPhone software, slated to be released in early July, Apple's answered the most determined business user's requests. Exchange support for e-mail, calendar and contacts, various other networking protocols, and remote locking down and wiping of devices. Apple had previously outlined these features in their Roadmap event, but with the software available in a month, the time for business is now.

A Stat from the keynote: 35% of Fortune 500 have been testing the iPhone's enterprise software and SDK. That's a substantial percentage of businesses who see use and value in what Apple's device provides, and if even a fraction of this percentage produces a company wide roll out, Apple will have the clout to really compete with RIM's Blackberry on the business front.

As the "iPhone killers" roll off the assembly lines of competitors, Steve showed once again that Apple still carries that design swagger, and holds such sway over the media, that each move is written about, rewritten about and scrutinized over till the next such Apple special event. When was the last time a phone from Samsung, LG, Nokia or Motorola was mentioned in thousands of news stories?

With today's market, the high P/E consumer sector, especially technology gadgets, is one most traders are very cautious about, and with Apple sporting a Forward P/E of about 30, there has to be incredible growth to justify the price tag. Lucky for Apple holders, that growth is there, and has been proven time and again, regardless of economy. In time, those patient with the market, and Apple, will surely be rewarded, as the iPhone announcement becomes tomorrow's iPhone worldwide roll out and at $199 to start, that's going to be a deal too incredible to pass up.

Disclosure: Author is long AAPL