24/7 Wall St.‘s Douglas A. McIntyre: No way, no how Apple hits $205 within 12-months

“Piper Jaffray has raised its price target for Apple (AAPL) from $160 to $205. up 28% which is stunning. Apple trades at $143 now. So, a stock that is up 130% over the last year would rise another 43% from the current price,” Douglas A. McIntyre opines for 24/7 Wall St.

“The new target price is based to a large extent on an estimate by the firm that Apple will sell 45 million iPhones in calendar year 2009, at an average price of $330,” McIntyre writes.

McIntyre describes Piper Jaffray’s forecast as “nutty,” writing, “The idea that Apple will sell a third as many phones at Motorola sells now is not credible… The Apple estimate also assumes that the larger handset companies will not come out with competing phones.”

Of Piper’s 12-month price target of $205 for Apple, McIntyre writes, “No way, no how.”

Full article here.
24/7 Wall St.’s website states, “The editors of 24/7 Wall St. do not own securities in companies that they write about. Other writers may have positions in companies and these are disclosed in their articles.” Since no such disclosure is contained within McIntyre’s article, we assume McIntyre has no stake in AAPL.

We believe that McIntyre is underestimating the excellence of iPhone, the power of word-of-mouth, and Apple’s ability to expand their iPhone product line at various price points (as they did with iPod), while overestimating competitors’ abilities to copy a device with over 200 patent applications that Apple has stated they plan to vigorously defend. McIntyre also seems to be totally discounting Mac growth, future iPods, and possible unreleased, unknown products from Apple.

We have iCal’ed McIntyre’s article, which we will revisit in 12-months or if AAPL shares hit $205 before a year elapses.

53 Comments

  1. McIntyre is a no-nothing, pseudo-blogger on financial topics. I’ve read his comments on Apple in the past, and he doesn’t get it.

    Having said that, I think Munster’s price target of $200 is a bit rich, and not a 12-month price target until we know more about how the iPhone is selling and what Apple has in the pipeline for the Fall.

  2. “The Apple estimate also assumes that the larger handset companies will not come out with competing phones.”

    Options: (it’s not the phone any more it’s the OS)

    #1. write an OS of their own that is a good or better than OS X – not likely

    #2. License OS X from Apple – possible but not likely

    #3. Go to Microsoft and be stuck with their garbage OS. Most likely. NOT a winner for a phone.

  3. @Eric46162

    While HP’s market cap, $127.12 billion, is now just around an easy curve in the road for Apple, Google’s, at $162.04 billion, will probably take the rest of the calendar year for Apple to equal

  4. @MB
    there are markets that those of us who lusted during the wiat for the iphone never dreamed of. people like mb’s friend’s dad. lots of people who bought and use (use is the operative word) an ipod, never even owned a portable cd player. the sustained growth of the iphone and its AAPL derivatives will not only reshape the phone market like it reshaped the mobile audio market, but it will redefine it as it redefined the mobile audio market.

    i’m so giddy over using the iphone as a phone and mobile computer, i sometimes forget it even is an ipod! more than once people have asked to see the ipod when i’m using the phone features. having owned 2G thru 4G ipods including the short lived photo only version that cost as much as the iphone, having all that music and video along with me in just a phone is still something i’m adjusting to. that is the seductive attraction of AAPL products. they make you do things that not only were not possible, but you didn’t even want to do them because they were too hard. that is the active part of redefining a market.

  5. How do you compete with Apple and its patents at this stage? Windows Surface does not yet fit into a phone! Any other way to do multi-touch?

    Everybody knows AAPL will hit 200 in due time, solely based on the prospects of iPhone sales. The question is rather what will happen if Apple starts releasing its 200 iPhone patents on the rest of its product portfolio.

    The ability of Apple to bring new technologies to the masses is astonishing. It will not go unnoticed. Even the most truthful pc-users will be tempted.

  6. The Apple estimate also assumes that the larger handset companies will not come out with competing phones.

    Which is a pretty darn good assumption if you ask me. Look at what’s out there now from the cellphone makers. Is there anything that’s even close to being close to being close to the iPhone? Am I supposed to expect that these companies are going to go from ordinary, blah cellphones and uninspired smartphones to an iPhone competitor in one year? Very unlikely. Their only hope would be to copy the iPhone, but Apple has patents to prevent that. Also, keep in mind that most cell carriers don’t like the freedom the iPhone gives you to do things (music downloading, Wi-Fi) without using the cell carrier as a middleman.

    Look, we’ve seen this before. When the iPod came out, the pundits said it was inevitable that competitors would come out with devices just as good, and cheaper, marginalizing Apple’s product. And yet it didn’t happen. Every “iPod killer” was a dismal failure, and six years after the first iPod, the competitors have (for the most part) given up and ceded the market to Apple.

  7. McIntyre has a flat tyre for sure, but if you think he is wrong then why not invest all your savings on AAPL right now?

    I mean if you are *really* that sure, why not make a healthy profit in just one year?

    Ron Jeremy

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