Forecast for the 2nd half of 2008

On June 23, 2008, TechStock2000 posted the following:

Pingdave wrote:

I posted about a year or so ago about the iPhone / RAZR similarities. Gene Munster coincidently carried the same theme, and did much more work on it soon after.

It is not at all unlikely that AAPL could sell 45 million in 2009. His target. Go look up his notes, or what RAZR sales did in the first couple of years or so.

Remember, it was just cool looking. The RAZR’s UI actually sucked. I don’t know now if it still is as bad, but at the time it was terrible.

The iPhone is the total package: cool looking, and a revolutionary UI… so intuitive most people don’t even need instructions.

Assuming the more reasonable analysis of a cost of around $200 per iPhone is right, and AAPL is getting around $500 including subsidies for them…. well you can plug the numbers in a calculator, and even figuring the revenue is deferred over two years per unit sold, the impact will be staggering a quarter or two out, and snowball every QTR for a couple of years. It isn’t priced in at all here either. AAPL is barely trading over its value on just the Mac/iPod/iTunes/Software business.

You are correct that these numbers are not included in today’s market value. Depending on a “hit product” for huge revenues and profits is a very different business model than incrementally growing an existing business. This is very similar to the frustrations that many of us felt when iPod sales were beginning to take off, and the street seemed not to give any credit to Apple for having created an entirely new business. The stock price then took off after iPods became a proven product, and market cap caught up.

Then, again, when music sales were taking off via the iTMS, the street failed to price in the value of creating another completely new business until it was clear that downloads were successful, and the stock price caught up.

Now, it seems clear to us that iPhone is poised for massive growth. We want to see the forward multiple take account for the contributions that iPhone will bring to us, and it is frustrating that analysts are not yet including those iPhone sales and profits in their models.

I have no doubt that the iPhone will be a massive growth driver for Apple over the next 3-5 years. I also believe that even the most conservative analysts will see the impact between now and the end of 2008.

We have seen some very interesting data posted in the past day about the percentage increase of AAPL in the second half of each of the past four years, and this tells me that we are poised to experience another year of stock growth in the second half similar to what we have seen in each of the past four years. My target is between 75% and 100% increase in stock price between July 1 and December 31.

I’ve posted many times that I highly respect those of you with the courage to make a prediction, and I have on occasion pointed out the success or failure of those predictions (I highly believe in accountability). Please feel free to mark this post and check on the stock price as we come to the end of 2008.

I certainly hope that we will all be giddy with happiness at the profits we have earned!

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