360 Degrees of Apple

Editor's Note: In this edition of "360 Degrees," RealMoney commentators take a closer look at highflying Apple as well as its new iPhone that's reportedly in the making.

TheStreet.com has always believed that offering a wide variety of opinions and viewpoints -- rather than a monolithic "house view" -- helps readers make better-informed investment decisions. In that spirit, we bring you "360 Degrees."

"360 Degrees" is a feature that takes advantage of our varied stable of contributors to RealMoney, who offer analysis of stocks and the markets from all angles -- fundamental vs. technical, short-term trader vs. long-term investor.

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The Apple Advantage

By Michael Comeau

This was originally published on RealMoney on Nov. 15 at 12:45 p.m. ET.

Could the long-awaited Apple (AAPL Quote) phone finally be on its way?

It is being reported that Apple has placed orders for 12 million cell phones from contract electronics manufacturer Hon Hai Precision to be delivered in the first quarter of 2007.

Apple's biggest strength is that it is able to sell products with fewer features than competing models but for more money. It is very likely to do the same with a phone, which could potentially be hugely damaging to the phone makers like Motorola (MOT Quote) and Nokia (NOK Quote).

Another Apple advantage would be the likelihood of mobile-phone carriers lining up to stock the phone, which would pull valuable shelf space away from competitors. Even more deadly would be the fact that the Apple display would likely be bright white, becoming the focus in any store.

The possibility of a phone is just another in a long list of reasons to like Apple. The company has a tiny market share within the huge PC market and is the only major operator in the business with a highly differentiated product.

In addition, I believe Microsoft (MSFT Quote) is making some strategic errors with its Vista launch, particularly its decision to offer so many different versions of the operating system. Apple, on the other hand, can just say that the Mac can do everything you want without having to worry if you have the right version.

I would also watch for Apple to make a more serious entry into the living room. I predict that the iMac's screen size, which currently maxes out at 24 inches, will eventually get to 37 inches or greater. In other words, it will be big enough to hang on the wall and fit in with a home theater system. Just add a wireless keyboard and mouse, and the television industry will shake in its boots.

In keeping with TSC's editorial policy, Michael Comeau doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships.