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