“The Street continues to crunch the numbers on what a distribution deal with Wal-Mart might mean for Apple’s iPhone sales,” Eric Savitz blogs for Barron’s. “Earlier this week, I took note of Piper Jaffray analyst Gene Munster’s analysis, which concluded that Wal-Mart could sell as many iPhones next year as Apple’s own retail stores [Munster estimates 4.5 million units].”
“This morning, Bernstein Research analyst Toni Sacconaghi runs through the numbers, and comes up with slightly different conclusions,” Savitz reports.
“For starters, Sacconaghi says his checks with Wal-Mart stores show that in fact the reports of a Wal-Mart distribution deal appear to be true; although he is skeptical about rumors the retailer will sell a 4GB model for $99,” Savitz reports.
“The Bernstein analyst thinks Wal-Mart can sell between 800,000 and 1.3 million units in FY 2009, or 4%-6% of his projected total,” Savitz reports. “He also notes that the rumored start date for selling phones at Wal-Mart is December 28, one day after the end of the company’s fiscal first quarter on December 27. Finally, Sacconaghi concludes that the partnership with Wal-Mart suggests that Apple wants to drive mass-market adoption of the iPhone, as it has done with the iPod.”
Savitz reports, “Sacconaghi maintains an Outperform rating and $135 price target on the stock, asserting that the stock has been ‘overly discounted,’ that short-term financial will remain relatively healthy despite the economic weakness, and that ‘the company’s longer-term growth story remains intact.'”
More in the full article here.