“Sanford Bernstein’s Toni Sacconaghi this afternoon weighed in with his latest think piece on Apple (AAPL), musing about the question of whether Apple stock should be treated like that of a cable company,” Tiernan Ray reports for Barron’s.
“‘We believe that rather than being a transactional company with volatile revenues, Apple is a platform company with stable, almost annuity-like revenue streams, driven by strong user lock-in,’ writes Sacconaghi,” Ray reports. “The apps and other content that go into Apple’s i-devices give it 90% or greater customer repurchase rates, he notes, with an implied ‘annual churn’ for the iPhone customer base of less than 5%, which is “far better than the 15%+ reported for most cable/telco companies,’ he observes.”
Ray reports, “Sacconaghi computes the ‘lifetime value’ of an Apple iPhone customer at $700 to $900, $600 to $650 for the Mac, and $275 to $300 for the persona who buys an iPad. The ‘net present value’ of those customer valuations is $204 billion right now, likely going to $293 billion in fiscal 2013 (ending September of that year) he estimates, and to $373 billion at the end of fiscal 2014, he projects.”
Read more in the full article here.