Here’s some good news to close out your Friday. Charlie Wolf of Needham & Co. has increased Apple stock’s target price to $540 from its previous target of $450. Yes, that’s $540 with a FIVE. And he also expects the iPad to maintain its position in the market. In fact the iPad is the main reason for the upgrade.
Looking at the competition to the iPad, Wolf notes:
The reason for the increase stemmed from the failure of tablets introduced this year to gain any traction in the market place. In the period following our February report, the tablet market has been inundated with new models—the Xoom running on Android’s Honeycomb operating system, RIM’s Playbook running on the company’s QNX operating system, HP’s Touchpad running on Web OS and many others. All of them have been greeted with a yawn and lackluster sales. None have been able to undercut the aggressively priced iPad, because the iPad’s component costs are materially lower than those of competing tablets.
Wolf also breaks down how much he feels each Apple product contributes to the per share price. For instance, the iPad accounts for $65.62 per share, while the iPhone leads the pack and accounts for $265.86 per share. The Mac is worth $63.92 per share, iTunes and the App Store is worth $27.52 per share, while the lowly iPod is now only worth a measly $3.50 per share (poor iPod, I bet it feels sad).
Wolf also writes: “future tablets are more likely to steal share from one another than from the iPad. Unlike smartphones, the distribution of tablets will occur mostly in consumer electronics chains, not carrier stores.” Apple has the advantage here because of its chain of highly successful and highly visible Apple Retail stores.
All of this paints a rosy picture of the future of Apple, and hopefully it comes true. All I know is, I wish I had bought Apple stock when it was $13. Or bought stock instead of that Performa. Oh God, what did I do?
I’m alright. Sorry. I had a moment there.
Have a great weekend folks. I’ll be sitting by the window wistfully thinking about what might have been.