The key takeaway from this
earnings report is that seasonality no longer exists for the company. By selling 8.75 million iPhones at the beginning of the year (131% growth), Apple has entered new territory.
The fact that this company's hottest product is an iPhone that needs to be replaced every 18 to 24 months is a fact that not many analysts have noticed.
I realized it when Steve Jobs spent a few minutes at the iPad event explaining that Apple was now the world's No. 1 mobile device company. What does this really mean? It means that the life cycle of products is no longer seven years like it was for the Mac.
All these analysts who are saying that the Apple story is all about the Mac are dead wrong. The Apple story is all about this shorter cycle of mobile device replacement combined with consumer loyalty. Never before have we had a mobile device company command loyalty like Apple.
The old norm used to be that you would break or lose your cell phone, head down to the
store and buy whatever new phone was hot that month. Now, if you're an iPhone user you head down to AT&T and buy another iPhone without even considering the competition. The Apple ecosystem of iTunes and App Store is too convenient.
Over the next 18 months Apple will trade like
did in its early years and it will trade like
trades now: $300 a share will arrive much sooner than anticipated as will $400.
The halo effect of iPod, Mac, iPhone, and iPad are all working in tandem to create a critical mass like this world has never seen. The world's No. 1 mobile electronics device company will grow to command an all-time record breaking market cap, as it should.
We're living in the middle of a technological revolution and Apple certainly will end up crushing the market cap of
At the time of publication, Schwarz was long Apple.
Jason Schwarz is an option strategist for Lone Peak Asset Management in Westlake Village, Calif. He is also the founder of the popular investment newsletter available at www.economictiming.com. Over the past few years, Schwarz has gained acclaim for his market calls on the price of oil, Bank of America, Apple, E*Trade, and his precision investing in S&P 500 option LEAPS. His book, The Alpha Hunter, is set to be released by McGraw Hill in December 2009.