Apple could soar to $500

Apple's rapid upgrade cycle and loyal customers will help it surpass Exxon Mobil's market cap.

By TheStreet Staff Apr 21, 2010 3:09PM

TheStreetBy Jason Schwarz, TheStreet

 

The key takeaway from Apple’s (AAPL) earnings report is that seasonality no longer affects the company. The company entered new territory when it sold 8.75 million iPhones in the first quarter, doubling the year-earlier quarter. 

 

This company's hottest product is an iPhone that needs to be replaced every 18 to 24 months. Many analysts have overlooked that fact.  

 

I realized it when Steve Jobs spent a few minutes at an iPad event explaining that Apple was now the world's No. 1 mobile device company. What does this really mean? It means that the lifecycle of its products is no longer seven years like it was for the Mac.

Analysts who say the Apple story is about the Mac are dead wrong. Apple’s story is about the short cycle of mobile device replacement and customer loyalty. Never before have we had a mobile device company command loyalty like Apple.

 

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The old norm used to be that you would break or lose your cell phone, head to the Verizon (VZ) store and buy the hot phone of the month. Now, if you're an iPhone user, you head to AT&T (T) and buy another iPhone without even considering the competition. The App Store and iTunes complete its ecosystem of convenience.

 

During the next 18 months, Apple shares will trade like Google’s (GOOG) in its early years and Baidu’s (BIDU) now: $300 a share will arrive sooner than anticipated, followed by $400.

 

The iPod, Mac, iPhone and iPad are working together to build a critical mass this world has never seen. The world's No. 1 mobile electronics device company will grow to command an all-time record breaking market cap, as it should.

 

We're living in the middle of a technological revolution and Apple certainly will end up crushing the market cap of Exxon Mobil (XOM).

 

TheStreet contributor Jason Schwarz is an options strategist for Lone Peak Asset Management. He had a long position in Apple.

 

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Apple may boost AT&T with $99 iPhone

 

Why Apple gets a 'sell' rating

 

They just don't get Apple

 

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