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By Ian Wyatt, NewsletterAdvisors.com |
AAPL | Jul 21, 2008 |
Follow the Money: 56% of Buyers Want this Company’s Product
By Ian Wyatt, Chief Investment Strategist, NewsletterAdvisors.com
Apple reported selling 1 million of the 3G iPhones in just three days earlier this month. It took 74 days for the original iPhone to achieve these sales.
In talking about Apple’s success, Tobin Smith, author of ChangeWave Investing: Picking the Next Monster Stocks of the New Economy and a market analyst for FOX News, cited the latest ChangeWave survey of 3,567 consumers, conducted following Apple’s June 9 announcement on the release of its 3G model.
"It showed iPhone having a tsunami-like impact on the smart phone market," says Smith. "The iPhone has already been a huge hit for Apple--but things are about to get much, much better."
Smith says a month ago ChangeWave Research asked consumers who currently own a smart phone or who plan to buy one in the next 90 days to reveal the manufacturer.Take a look at the chart below:
 "A full 56% of all the people planning to buy a smart phone in the next 90 days have their heart set on an Apple iPhone. That’s huge," says Smith.
"After seeing the demand for Apple’s latest gadget first-hand (I waited in a few lines myself), my guess is that they could have sold 3 million or 4 million phones if stores had them in stock," says Smith. "And by the end of the holiday season, we should expect to see 7 million to 8 million units sold."
RBC Capital Markets Analyst Mike Abramsky said he expects 5.1 million units to be shipped in the fourth quarter and 6.5 million in the first quarter of 2009 despite reports of initial activation problems.
For the second quarter ended March 29, Apple reported a net profit of $1.05 billion, or $1.16 per share, compared with $770 million, or $0.87 per share, a year earlier. Revenue for the fiscal 2008 second quarter was $7.5 billion, compared with $5.3 billion for the year-ago quarter. Apple said its earnings were lifted by a 51% unit growth in Macintosh computer sales, along with a 1% unit growth in iPod sales.
Apple is expected to announce third quarter earnings today (July 21), but it won’t be until October when the first iPhone 3G sales numbers are reported. On average, analysts are expecting earnings per share in the most recent three-month period of $1.08 on revenues of $7.36 billion. For the same quarter a year earlier, Apple’s earnings per share were $0.72. Apple execs have previously said they expect earnings of $1 per share on revenues of $7.2 billion.
RBC’s Abramsky maintains an "outperform" rating for Apple and a $220 price target.
AAPL was trading at around $167 a share on Friday, off from a high of $200 six months ago, but up from a recent low of $120 four months ago.
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