Apple Deserves a Breakout

This column was originally published on RealMoney on Feb. 7 at 1:44 p.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

Could this be the long-awaited breakout of Apple(AAPL Quote)? This stock has been, with the possible exception of Google(GOOG Quote), the most profound disappointment of 2007.

The froth of the iPhone coupled with a belief that the new device must be a failure because of its price point -- even as my teenage daughters tell me otherwise -- has kept a huge lid on the story.

I think that lid could be sliding off.

Here's why: We are able, now, to see the power of Steve Jobs. He owns a whole industry with this iTunes, a whole industry. Who can imagine what will happen when we get to iTV?!?

Jobs is the most important man in media; therefore, Apple is the most important company in media -- again, with the possible exception of Google.

To me that's worth more of a premium than Apple currently sells for.

Indeed, the great mystery of Apple is how darned cheap it is vs. its growth rate. Apple sells at 26 times next year's earnings estimate, with a 20%-plus growth rate. That makes no sense and reflects a belief that iPhone's a joke like Microsoft's(MSFT Quote) Zune. It isn't.

What people are missing is what was in that great article in The New York Times over the weekend about Motorola(MOT Quote) and how the Razr wasn't fashionable.

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