'Pokemon Go' to Boost Apple (AAPL) Revenue, Needham's Martin Explains on CNBC

Needham Managing Director Laura Martin discussed her firm's estimate that Pokemon Go will bring in $3 billion to Apple (AAPL) revenue over the next two years on CNBC today.
By Lindsay Rittenhouse ,

NEW YORK (TheStreet) -- Needham Managing Director Laura Martin explained her firm's estimate that 'Pokemon Go' will bring $3 billion to Apple (AAPL) - Get Report revenue, on CNBC's "Fast Money: Halftime Report" Wednesday.

This morning Needham analysts predicted that Nintendo's (NTDOY) hit augmented reality game could bring as much as $3 billion to the tech giant's revenue over the next two years. Apple's market cap has already been boosted to $2 billion since "Pokemon Go" launched earlier this month.

Needham analysts came to this estimate by examining "Pokemon Go's" daily users and daily active spending on Apple iOS devices, according to Martin.

"And the answer is the daily active user is spending about 16 cents a day and we think Apple keeps 30% of that through the Apps store," Martin explained.

"Pokemon Go" will add about 40 cents per share, or $4 a share in value, to Apple, "excluding the upside from the next hit content that some other genius in California makes," she noted.

Even if "Pokemon Go" fades out, another augmented, location-based game craze will pop up and the tech giant will share in the success of that too, Martin predicted.

"The important number for Apple is the billion installed base of users with an average hold of eight years. That's how long people stay in the Apple ecosystem. Apple participates at the 30% level no matter what genius creates the next hit game," she continued.

Shares of Apple are down by 0.04% to $99.84 this afternoon.

(Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL? Learn more now.)

Separately, TheStreet Ratings rated Apple as a "buy" with a score of B.

This is driven by a number of strengths, which can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. TheStreet Ratings feels its strengths outweigh the fact that the company shows weak operating cash flow.

You can view the full analysis from the report here: AAPL

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

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