Apple's Long-Lasting Shine

Get Jim Cramer's picks for 2006.

Rest easy, ye merry investors in Apple Computer (AAPL Quote).

Even after a three-year run that has sent Apple shares heavenward, some bulls believe the company -- and its stock -- can only climb higher in 2006.

"This is a magical time to be at Apple Computer," says Stephen Coleman, who manages the Chicken Little Growth Fund, which has 25% of its holdings invested in Apple. "It's an exciting story."

Apple's resurgence, of course, was sparked by the iPod digital music player, and revenue surged this year when the company expanded the iPod line, introducing less-expensive models, flash memory-based products and video-playing versions. Meanwhile, sales of Apple's Macintosh outpaced the broader market this year -- a sign that the iPod may be breathing new life into that venerable lineup.

The company's revival has been reflected in its stock price, which now sits above $73. Apple shares have more than doubled in price this year and have risen more than 10 times since their nadir back in 2002.

So, what's the next product splash to spark the stock's run to $100? Depending on whom you ask, the answer is anything from an Apple-branded cell phone to an Apple-flavored take on Microsoft's (MSFT Quote) Media Center PC concept to simply more iterations on the iPod line.

A step into consumers' living rooms would seem to be a natural one for Apple, given its dominance of the digital music market, its introduction of downloadable video content and the multimedia features of its computers. The company already made a move in that direction earlier this year, introducing a program called Front Row that allows new iMac users to remotely control the songs or videos playing on their computers.

The bet among analysts is that Apple will expand on that plan in 2006, coming out with a device that better links consumers' existing entertainment systems with their digital content. That's been the ambition of the Media Center PCs, but those have seen tepid sales to date. But it's a market also being targeted by Microsoft's much-hyped Xbox 360 game console and Sony's (SNE Quote) upcoming PlayStation 3, both of which promise to allow users to play digital-video and music files in their living rooms.

Juicy Returns Apple's growth in 2005
	Amount	Year-Over-Year Change
Stock price	$71.38	122%
Sales	13.93 billion	68
EPS	1.56	333
Computer unit sales	4.5 million	38
iPod unit sales	22.5 million	409
Retail Stores	124	44
Notes: Stock price data uses Dec. 19 closing price. Other data based on Apple's Sept. 24 fiscal year-end numbers. Sources: Apple's annual report, Yahoo! Finance

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