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.