Mac, iPhone sales 'materially higher'

The research group at Needham & Co. is raising its price target on Apple stock, pushing the ceiling from $235 to $280. Analyst Charlie Wolf notes that Mac and iPhone sales have proven "materially higher" in the last two quarters than were forecast in September. On top of this, sales from the iTunes Store were higher than expected as a result of iPhone apps.

iPhone sales are in fact predicted to grow based on an increasing library of available apps. Apple's share of the US smartphone market could break 30 percent, says Wolf, should the company produce a CDMA iPhone able to run on Verizon's network. As a rule though, international sales are expected to grow more than domestic ones.

Mac sales are said to have plenty of room for expansion, as Apple holds just 4 percent of the global PC market. Mac shipments could rise to 24.9 million units per year by 2019, which would still represent only 4.4 percent of computers.

The iPad is predicted to make a significant contribution to Apple's investment worth, even if it may actually cannibalize some Mac sales. The tablet is in fact thought to have potential for deep penetration into the educational market, mainly in terms of K-12 schools, but also at colleges and universities as a textbook reader. The device may nevertheless need a "catalyst" to explode sales at some point, says Wolf.

Roughly 20 million iPads are forecast to be sold annually by 2020, adding $9.93 to EPS. It may be futile to claim any hard figures, however, until the iPad actually launches, Wolf concludes.

by MacNN Staff