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The case for AAPL

Apple has released the 3G iPhone.  The plan is for the iPhone to be available in 70 Countries within a year.  This represents a large increase in available markets for what has been the hottest phone (it’s really much more) to ever hit the market.

An important (and overlooked) part of the release of the new iPhone was the availabilty of new firmware for ALL iPhones.  This new firmware upgrades existing iPhones enabling the purchase of applications to be loaded on the iPhone.  This represents a new revenue stream for AAPL.  I have not seen any speculation on what this revenue could mean, but I do know that the currenet small sample of iPhone users in my social circle are quickly adding free and PAID applications to their phones.

The barrier to the iPhone taking a foothold in large organizations was the inability to be managed securely and connect to corporate email.  These barriers have been removed and new capabilities have been unlocked, notably SalesForce and other custom applications.  Given the elegant and extremely user-friendly interface, corporate adoption of the iPhone should be brisk.

The iPhone was a phone and an iPod.  Now it is also a portable game console, medical imaging device and serious business tool.

Yesterday Jim Cramer of CNBC called AAPL a “don’t buy”.  Instead he recommended purchasing ATT.  This advice misses the mark badly.  ATT is not the carrier of the iPhone in 70 new markets.  AAPL will also be the prime beneficiary of the new “App Store”, not ATT.  Plus, every iPhone sold (did I mention 70 new markets?) is more revenue to AAPL’s bottom line

Personally I am staying out of the market for the forseeable future, but options on AAPL six months out at $200 is definitely a viable, and likely more profitable, investment than ATT.


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