A Topeka Capital Markets analyst is projecting Apple will be worth more than $1 Trillion after the company launches the iPhone 5. Analyst Brian White has a $1,111 target on Apple shares, stating that the iPhone 5 will be one of the biggest, if not the biggest technology upgrade cycles ever.
Apple shares are currently trading in the $610 range, putting Apple’s market capitalization at $570 billion. A $1,111 per-share price and $1.04 trillion valuation may sound extraordinary, but White makes some strong arguments to justify the target. By some measures, Apple’s $610 stock price is actually cheap by some measures. Apple is currently trading at just nine times earnings excluding the $110 billion of cash it has in the bank.
The analyst is basing the target stock price based on Apple’s current product lines and says it’s very reasonable for the company’s stock to hit $1,111, even if it fails to launch a television set.
White expects the iPhone 5 to launch in September to be a significant improvement over the iPhone 4S. He expects the iPhone 5 to feature 4G, a new unibody design, 4G capabilities and a 4-inch display. The improved functionality and distinct look and feel will spur current iPhone users to upgrade to the iPhone 5.
In the above interview with Bloomberg, White calls Apple the greatest company in the world and says Apple fever is sweeping the globe, especially in China. Apple tripled sales in China compared to a year ago, accounting for 20% of its total revenue. White says that Apple has an opportunity to increase its footprint in China by opening more retail stores.
Apple released its fiscal Q2 2012 numbers Tuesday, creating quite a stir in the technology and business industries. Apple earned $11.6 billion on sales of $39.2 billion thanks to strong iPhone and iPad sales. The company sold 35.1 million iPhones and 11.8 million iPads in the first three months of the year.
The iPhone 4S, Apple’s current flagship phone, launched late in 2011 as a relatively minor upgrade to the iPhone 4, which launched on June 24, 2010. While the iPhone 4S is faster, sports a better camera and Siri, it is nearly indistinguishable from the iPhone 4 in terms of appearance. Many iPhone 4 owners didn’t see enough reason to upgrade to the iPhone 4S.
The iPhone 5 will almost certainly sport 4G LTE, which is about 10 times faster than the 3G wireless technology baked into the iPhone 4S. This feature alone is reason enough for many iPhone users to upgrade. Above is a video demo of AT&T and Verizon 4G LTE running on Apple’s new iPad. Below is a video demonstration of how AT&T’s 3G network performs on the iPhone 4S compared to Verizon’s 4G LTE network on an Android smartphone.
A 4G LTE iPhone can’t come soon enough for some Apple users, but the analyst from Topeka Capital Markets isn’t alone in thinking we’ll have to wait until fall for the iPhone 5. A new version of iOS will likely launch alongside the iPhone 5, however there’s no sign of iOS 6 yet. Developers typically get previews of Apple’s next-generation mobile operating systems well ahead of launch so they can build apps to take advantage of new features and update existing apps. The shortest time between an iOS beta and release of the mobile operating system to consumers was 80 days.
Will there even be an iPhone 5?
Just about everyone, except for Apple, is referring to the next-generation iPhone as the iPhone 5. However, Apple doesn’t have a predictable pattern when it comes to naming its mobile devices. Its first phone was simply called in iPhone, with the second version gaining the ’3G’ designation. The third iPhone was dubbed the iPhone 3GS. The iPhone 4 was the only iPhone that was actually named for its place in iPhone history. The fifth-generation iPhone is already on the market in the form of the iPhone 4S. If Apple names the next iPhone for its generation it should actually be dubbed the iPhone 6.
Apple surprised many by calling the latest iPad the ‘New iPad’ rather than the iPad 3. It’s completely possible that Apple will shift away from its current scheme of tacking on numbers and letters to the end of the iPhone brand. The iPhone is the only current Apple product with such a naming convention. Its iMac, MacBook Pro, MacBook Air, Mac Pro and iPad brands all stand on their own without any alphabet soup muddling things up.
What do you think the next iPhone will be called? Will it be called the iPhone 5 or something else that’s more descriptive? Are you planning to upgrade to the iPhone 5?