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AAPL Stock: 105.22 ( + 0.39 )

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Analyst wary of Apple's success in 2008

updated 09:55 pm EST, Mon December 3, 2007

Analyst wary of 2008

Apple has enjoyed a pretty active year, after introducing the new iMacs, the iPhone, Leopard and the iPod touch, but some analysts are predicting that Apple will have a tough follow-up ahead of them in 2008. While the company has brought in record-breaking financial statistics - Apple's market cap sits at $160 billion, up from $60 billion 18 months ago, with stock currently hovering around $185 per share - they have been breaking into new industries and simultaneously making new enemies, according to Fast Company. Steve Hach, a senior analyst at forecaster ValuEngine, argues that Apple's share price does not accurately represent the company's stature in the financial world.

"In a perfect world, our computer model would set Apple's stock at about $135," says Hach. "Apple is far more overvalued than Google, Intel, or Microsoft."

With the iPhone currently making waves all over the world, Apple's marketing tactics will be put to the test, as cellular giant Nokia rises to meet the challenge proposed by the device. Apple's goal of 10 million iPhones by the end of 2008 is a big deal for the company, however it represents just a sliver of what Nokia is capable of. According to recent information, Nokia sells around 400 million wireless devices per year, controlling approximately 40% of the market - more than Motorola, Samsung, and Sony Ericsson combined.

Competitors will not be the only thing Apple is up against, with both technological and legal hurdles ahead of them still. Apple is relying on the iPhone's success in Europe, but may run into problems as competitors eager to supplant the iPhone introduce similar products that are not bound to a particular service provider, and with 3G connectivity.

iTunes and the iPod arguably create most of Apple's revenue, especially when considering the halo effect - additional sales of Macs, Airport products, and AppleTV, among others. While Apple wants to maintain a constant and universal pricing structure for all content on the iTunes Store, companies like Vivendi Universal are fighting back against Apple's strict structure by offering a direct-to-the-consumer sales service called Total Music, with invitations extended to Sony BMG and Warner Music to join up with the service.

Fast Company concludes that if Apple is to keep its closed structures intact, it will have to innovate constantly, giving people a reason to stay with the platform. Otherwise, an open base structure will be the best option for them.




by MacNN Staff

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Comments

  1. bobolicious

    Joined: Dec 1969

    0

    paradigm shift?

    everyone peecee i know is enviously looking at macs...

  1. mgpalma

    Joined: Dec 1969

    0

    And all of this...

    speculation by analysts could be a big heaping pile of...again.

  1. robttwo

    Joined: Dec 1969

    0

    huh?

    How can anything be more overvalued than Google?

    Doofuses.

  1. rvhernandez

    Joined: Dec 1969

    0

    Steve Hack is...

    Steve Hack is just hoping the share price would go down because of his analysis in order to buy stock... BTW, I didn't realize FastCompany was still around? After the bubble, I'm surprised anyone finds them relavent?

  1. Rezzz

    Joined: Dec 1969

    0

    FastCompany

    C'mon guys.. Apple could be your fricken namesake. No one, no one, no one innovates like Apple, Inc. Fast company? Look no further.

    Here's my predictions:

    The installed user base of iPod and iPhone users is massive. It will grow even more gigantic this holiday. The music companies and video firms want to sell their wares. Apple will make compromises and things will progess. As flash prices drop, iPod Touch storage grows and the Touch becomes much more attractive. Classic eventually gets axed.

    Steve Jobs is working hard behind the scenes to broker a new media deal with the movie networks. It will be a rental or purchase. This will be rolled out with AppleTV 2.0 with a built-in DVD burner.

    Mac market share will continue to grow approaching 9.5%. It will be spurred further by flash based, portables that bridge tha gap between the laptop and worthless PDAs. They will be touch-based with larger virtual keyboards than the iphone can offer. Again, continued innovation...

    So there's my worthless predictions of '08 and I'll bet your entire life savings on it.

    I love you FastCompany!

  1. tbo

    Joined: Dec 1969

    0

    What a smart a**

    "Fast Company concludes that if Apple is to keep its closed structures intact, it will have to innovate constantly, giving people a reason to stay with the platform. Otherwise, an open base structure will be the best option for them." Hey that sounds revolutionary: either you're dead or you're alive. Wonder what those guys make their money with...

  1. johnblommers

    Joined: Dec 1969

    0

    Fast Company's *&?! model

    In a perfect world, Fast Company's computer model would accurately predict Apple's current stock price. It fails miserably by Hach's own admission, yet he desperately waves his hands, trying to summon spells to distract us. You're a lousy magician, sir!

    And kindly let the professionals do the modeling. Leave speculation (you think what you do is analysis?) to John Dvorak and his ilk, who are far better at it than you are, and not so pretentious.

  1. Benton

    Joined: Dec 1969

    0

    Price/Earnings

    At close of business today Google's forward P/E is 33 and Apple's forward P/E is 29.

  1. Luke MacWalker

    Joined: Dec 1969

    0

    re: computer model

    Computer models seem to be new gods. Look at the model predicting climate change: they don't agree with the facts either, but somehow everybody seems to believe they accurately predicts what is to come...

  1. jarod

    Joined: Dec 1969

    0

    Problem is with the net

    It gives any moron the illusion that they can write.

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