Needham & Co. analyst Charlie Wolf on Friday released a note to clients that announced he was raising his 12-month price target on Apple Inc. (AAPL) to $540 from $450.
Philip Elmer-DeWitt reports for Fortune, “The ultimate size of the tablet computer market, and the iPad’s share of that market, are key to Wolf’s revised valuation because it is based of several new assumptions.”
• That going forward the iPad, not the iPod, will be the the main source (along with the iPhone) of the halo effect that drives the Mac’s market share. The theory is that Microsoft Windows users who buy iPhones or iPads are even more likely to switch to Macs than iPod owners were.
• That iPad sales to new users will grow steadily for the next five years, peaking in 2016 at nearly 54 million units.
• That the iPad’s growth curve will end up being less like the Mac and the iPhone — which have small shares of very large markets — and more like the iPod, which continues to command a better than 70% share of the MP3 player market.
• That by 2020, the iPad will still be shipping nearly 140 million units a year [to new and repeat buyers] and commanding a 60% share of the tablet computer market — considerably higher than conventional wisdom. Gartner, for example, has the iPad’s market share slipping to 47% by 2015 under the onslaught of copycats running Google Android and other tablet operating systems. ‘We disagree with pundits who have predicted that the iPad will rapidly lose share to Android tablets,’ Wolf writes.
Much more, including Wolf’s revised Apple model and his forecast for iPad sales, in the full article here.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
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