Why Apple’s iPad Upside Isn’t Priced in Yet
Jason Schwarz submits:
What are the two most surprising things about Apple (AAPL)? According to Apple management it’s the success of the App Store and the iPod Touch. At a time when the iPod was supposed to fade away into the sunset, the iPod Touch catches fire? Huh? Why would anyone buy a Touch when they can buy an iPhone? People actually pay up to $399 for the Touch. Nobody saw this coming. So what does the surprises success of the Touch and the 3 billion downloads from the App Store tell us about the iPad? A lot.
The iPad finds itself right in the middle of Apple’s sweet spot. Let’s analyze the converging highways of potential buyers. On one highway you’ve got 75 million current iPhone and iPod Touch users who are familiar with the App Store and can’t wait to utilize the bigger screen. On another highway you’ve got 33 million units of 2009 netbook sales showcasing the demand for such a product. Then we’ve got the gamers: According to the Entertainment and Merchants Association 2009 Annual Report once a consumer decides to play video games, they continue to play for life, 68% of all American households are now playing video games and total industry sales jumped to $23 billion in 2008. It is estimated that there are 217 million online gamers worldwide.
Investing, Long Term Investment, stock market | admin February 25, 2010
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