Cody Willard: More earnings growth ahead for the Apple Inc. juggernaut

Mac mini closeout deals“Apple’s got about 1% of that global market share for cell phones right now. They’ve sold 10 to 20 million in the last year. Since the iPhone now has a price point of $99 — and since that same iPhone will likely be given away for free with a two-year AT&T service contract in another year or so — that means Apple’s could grow their market share even ten-fold from the 1% level it’s at today,” Cody Willard blogs for MarketWatch.

“Model it out yourself, if you want. Getting the iPhone platform up to 10% market share in cell phones would mean 100 million units sold, even if the cell-phone market is to contract 5% more this year and next,” Willard writes. “While the price point for the iPhone will continue to come down, the unit growth still will provide outright revenue growth for Apple. Component costs for the iPhone will come down too, and that means margins for Apple will expand. That means more earnings growth ahead for this juggernaut.”

Willard writes, “We should note that either or both the new Chrome OS and the Android OS from Google will take market share from the other companies — except Apple, which you’ll remember has only 1% of the market — as the cell phone and netbooks converge. The PC marketplace is only about 300 million units a year, by the way, which is why cell phones and netbooks are so important for growth in tech in the new millenium.”

“I wouldn’t buy either of these right now at these levels and expect to make any money in the near term. I’m much too bearish on the overall economy and markets for that. But I’d want to own a least a toehold of both of these. Otherwise, I’d wait for both of these stocks to come down,” Willard writes. “But as I’ve told everyone about these two companies for years — these are as good as it gets in long-term investments.”

Full article here.

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