Apple Price Projection in 2010
June 4th, 2008. Posted by AppleOption
As a child, we are always told to “shoot for the stars” to “dream big.” This old adage is dangerous when playing the stock market, but with certain companies… it is worth while to examine past patterns as a predictor of future direction.
Below is a logarithmic scale. It’s a graph where every move on the vertical axis is equally proportionate (for example a 100% gain from $10 to $20, appears the same as a 100% gain from $150 to $300).
The 7-year chart is from 2003 thru 2010. There are three lines on this chart, one represents the support level channel ($380), the resistance level channel ($1,200) and the median channel ($700). The beginning of 2003 marked the start of this impressive bullish channel of Apple stock. It will not continue indefinitely, but we extrapolated the channel to the January 2010 options expiration. The goal is to help clarify price targets and goals with LEAPS.
The chart also includes a 200-day Moving Average trend line. The 200-MA was last at $154. Notice over the last 5 years Apple has only provided investors buying opportunities under the 200-MA level. These entry points or even those suggested by the 40-MA may turn into excellent risk/reward points of entry on LEAPS. Technical analysis trading my help reduce the ‘fear’ of trading and buying at all time highs.
AppleOption has no idea how long this channel will last, but take a moment to dream big as we take a look at fundamental factors that may justify these prices in the future.
iPod
A critical player in developing the bullish channel is the iPod. Released in 2001, the iPod has revolutionized the music market. Nearly everyone has an iPod and every other company is trying to copy this device. Apple has enjoyed strong sales in this market share. At this point, if sales start to fall… it’s only from “self” competition and not other company rip-off mp3 players. The iPhone evolved from a successful iPod platform and is integrating more aspects of the digital life.
iPhone
June 2007 was the beginning for the iPhone. It will eventually out sell the iPod. It took 2-3 years for the iPod to become mainstream. However, the crossover to the iPhone is expedited thanks to familiarity and perceived need by consumers. In a about a year Apple will have sold 10 million iPhones and this is just the beginning! With recent announcement of the Software Developer’s Kit (SDK), the iPhone is positioning itself to cannibalize the BlackBerry market (RIMM) of enterprise business. One third of all Fortune 500 companies have inquired about the SDK with intent of optimizing the phone for their company’s communication network. Enterprise utilization of the iPhone will only prompt additional conversions to the Mac platform and computer sales. Next week Apple will likely release the second generation iPhone. With nearly all developed countries now supporting the iPhone, the sales and market share will catapult. The addition of a video camera on the iPhone will bring true meaning to Visual Voicemail.
iTunes
How many people do you know have purchased a song from iTunes? Apple has credit card information of millions and millions of people. The iTunes interface is the integrating software between the iPod, iPhone, Mac and AppleTV. Not only will it allow users to download the newest song, it allows Apple a ‘free’ direct marketing stream to inform everyone about new products. This foundation will make future product launches easier and widely received to member’s who’s credit card is queued to purchase the newest Apple gadget.
Mac Computers
The silent night to Apple’s success. The Mac computer is simply amazing. It often represents the computing experience many could only hope. No blue screens of death, easy set-up with intuitive program integration and functionality. It is of no surprise when a PC user actually takes a moment to trial the Mac computer, they typically decide to buy one. The Mac has obvious momentum as it is growing by 51% in a down economy. As college graduates enter the business world and companies adopt the iPhone, the Mac market share will explode. This will roll over to additional revenue of Mac software.
Mac Software
The Mac operating system OSX is only a fraction of the software driving the Mac experience. iLife, iWork and a handful of additional developer applications complement the system. All of this software is continually updated, creating a constant reoccuring revenue that will grow with additional computer sales. That’s without mentioning the endless possibilities if Apple purchases Adobe (ADBE).
AppleTV
Currently, this product is seen as a failure. Though we feel Apple hasn’t become fully invested in this product yet. Sure the AppleTV allows you to view all of your home movies, family photos, listen to all your music, and even rent movies. This is only the beginning! Envision a Google-Apple partnership. After the FCC and Congress deregulate the set-top-box, which is currently controlled by cable or satellite providers, then the Google-Apple teamwork can deliver a set-to-box that enables a host of internet tv and HD tv in an a-la-carte fashion. Viewers pay for the channels they want. Apple is not just adding another product to the mix, they are planning to offer the television system of the future. The implications of this are enormous!
All of these current product lines can easily justify higher valuation of Apple share price with continued growth and success!
Will this projected bullish channel into January 2010 continue? If so… then Apple stock could easily be trading at $700. Traders should consider the outlook of this stock while the market is still beaten down and position their portfolio for future success.