Apple Changes Industries, Minds


Covering Apple can be fun, in a nauseating kind of way: Consider RBC Capital's Mike Abramsky earlier this year who did a whiplash-inducing about-face after essentially rating Palm a "buy," and Apple a "sell." He stepped up, admitted he was wrong, and upped Apple to a "buy," and dramatically increased his targets.

Enter Morgan Stanley's damned-if-you-do-damned-if-you-don't Katy Huberty who is routinely skewered by bloggers for her Apple estimates and fickle calls on the company stock. She was destroyed in the blogosphere several months back for virtual back-to-back downgrades that torpedoed shares and sent Apple investors into a tizzy.

So her call yesterdayisn't nearly as interesting as the reaction it got. She raised her targets and Apple shares soar. Why though? Why is it that Huberty is nailed when her targets on Apple decline; but hailed when she raises them? Makes you kinda wonder, doesn't it?

Meantime, Abramsky is out with a new note of his own. Reiterating his buy; reiterating his $165 target. He, like many others, expect new iPhones and lower prices at Apple's developer's conference on June 8.

He expects a healthy upgrade cycle, with 20 percent of the iPhone installed base trading up in the first year. "We estimate Apple sells 750k 1st mo., 1.5M F09, 6M F10."

He also expects the 8GB price cut to $99 Price should accelerate those unit sales by 30-40 percent.

"Proprietary RBC IQ / Changewave data (2,900 respondents) indicates this could accelerate iPhone momentum 30-40%. We est 5M $99 iPhones sold F09 and 22M F10. Strong Share Gains Expected. RBC iPhone sales estimate remains 18M F09, 28M F10, with Apple's global hand set share reaching 2.4% CY10. Total iPhone/Touch install base reaches 94M."

Bloomberg is reporting that Apple will also introduce new hand sets for the China market that same week.

Google Android
Google Android
Google Android

Combine all that news with the new Google/Android phonebeing released by Rogers in Canada (which I'm hoping to show you later today on Power Lunch), and the new Hybrid Blackberry touch screen/keypad smart phone from Research in Motion, and none of this is good news for Palm and its nascent Pre. Palm is still playing cat and mouse with the device. It'll play a small role today during the Google keynote address at an event in San Francisco, but the company is still in a virtual stealth mode, trying to beat Apple at its own game. Such a strange strategy, but more power to 'em if it sells hand sets (and Palm is able to meet demand.)

All this boils down to Apple's momentum, which I keep mentioning. And even at this stage, with Apple topping $130, it seems to be only just beginning. June 7 will be a very interesting day indeed.



Questions? Comments?