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AAPL Stock: 100.11 ( -0.64 )

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iPhone/iPod puts Apple 2-3 years ahead, says Morgan Stanley

updated 12:05 pm EST, Wed December 16, 2009

Platform adoption outpaces other technologies

The iPhone/iPod touch platform has been adopted faster than any other new technology in history, Morgan Stanley analysts claim. In a space of nine quarters Apple has achieved an install base of 57 million, surpassing the achievements of companies like NTT DoCoMo, Netscape and AOL. DoCoMo is noted to have attracted 25 million people in the same space of time, while AOL pulled in just 7 million. Apple's growth is also faster than that of gaming systems like the Sony PSP and the Nintendo Wii and DS.

Apple is said to be so far ahead of competitors in the mobile Internet realm that it has a lead of two to three years. Aiding the company are said to be two factors, namely some 200 million iTunes users, who are in a position to put content from the iTunes Store on Apple handhelds. There is also said to be a "sweet spot" for the mobile Internet in the overlap of iPhone/iPod owners and social networks, namely Facebook, which has about 430 million users.

The 2000s could be considered as important to mobile computing as the 1990s were to the Internet, Morgan Stanley suggests, and Apple is believed to be in a "pole position" to lead the industry going forward.

Stanley analyst Katy Huberty meanwhile argues that Apple stock could in theory hit $325 to $435 in the next 12 months, but only if Apple meets certain criteria. The first is if the company broadens phone distribution to take 10 percent of global share and a third of the smartphone market by FY2012. The company could also adopt cheaper hardware and subscription plans, such that it might possibly take 15 percent of cellphones and 50 percent of smartphones during FY2012 proper. To assume dominance, Apple may have to abandon carrier subsidies, and reap most of its profit from content, services and/or accessories.

The odds of Apple breaking $325 are said to be one in four, or just 5 percent if going by Street consensus. Huberty proposes that following current trends, the company is more likely to hit $230. In a worst-case scenario Apple might drop to $150, though this would be dependent on the iPhone losing appeal, and being overtaken by open platforms such as Android.




by MacNN Staff

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Comments

  1. dagamer34

    Joined: Dec 1969

    -1

    So basically

    Only way Apple can hit such lofty numbers is if they drop exclusivity.

  1. climacs

    Joined: Dec 1969

    +3

    I would love to know

    how these analysts come up with probabilities for their stock price targets.

    They make it sound like hardcore statistical analysis; is that what this is, or just pulling numbers out of one's butt?

  1. climacs

    Joined: Dec 1969

    +4

    I sure regret

    not sinking everything I had into AAPL in 2001 when I bought 150 shares on a lark!

    The 2000s could be considered as important to mobile computing as the 1990s were to the Internet, Morgan Stanley suggests, and Apple is believed to be in a "pole position" to lead the industry going forward.

  1. climacs

    Joined: Dec 1969

    +4

    Morgan gets it

    Apple has a two to three year lead and unless they get stupid overnight, they will keep that lead because most of their competitors are always trying to see what Apple does and copy it. Therefore, they will perpetually be behind them.

    What's more, it's clear Apple has a strategy and a vision of where to go - a road map - and it looks like a good one judging by past successes.

    Meanwhile their competitors like Dell and Microsoft are continually chasing the latest flavor of the month and pursuing short term goals like hitting the next quarter's numbers.

    Apple turned their nose up at netbooks while everyone else ran a race to the bottom. There you go; that's all you need to know about who's going to win.

  1. Bobfozz

    Joined: Dec 1969

    +3

    climacs gets it

    What is the biggest "fear" from PC manufacturers? That Apple will stub their toe. if that happens, the PC guys won't know what to do... maybe walk off of a cliff. Even Intel has problems now with monopolizing and restrictions. So does Apple have a plan to switch to AMD (just in case)? The thing about Apple's "secrecy" is they have a "road map" and the others have these ridiculous "mission statements" which mean nothing.

    Netbooks? The ones I've seen were not impressive at all.

  1. iphonerulez

    Joined: Dec 1969

    -5

    $325 a share is unlikely since

    Apple stock has already topped out at $200 and will barely clear that even if they sell 10 million iPhones this quarter. Google's Android seems to be the wave of the future and Google will probably be at $1000 a share before Apple hits $250. Already Google's name is well-known around the world and Google is trying to get Android into the hands of the poor and cheapsters of the world. Mindshare and market share are Google's goals. Apple only wants a small percentage of elite users for its products to build a healthy but fixed revenue stream.

    Google is going for the brass ring buying up companies to keep them falling into competitor's hands. Google is the company to vanquish Microsoft and surpass them in market cap and are getting closer day by day while Apple is already running out of steam. Google is exciting investors with a big dream of billions of people clicking ads on Android-powered handsets. Google and Android will be the favorite of users in China, India and Russia. Hugely populated countries that clearly want no part of the iPhone platform because it's too expensive for them.

    Apple had a lead, but again they're going to get trumped by a company such as Google that realizes cheap devices and flooding the market is the better way to go to make lots of fast money. Large investors feel the same way.

  1. LouZer

    Joined: Dec 1969

    0

    Re: Morgan gets it

    Of course Morgan gets it. They're bullish on Apple. Ergo, their analysts know what they're talking about. All those other analysts who aren't saying such glowing things about Apple, they're just idiots.

    And we all know Morgan wouldn't be saying this just to pump up the stock like all those other analysts either.

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