Katy Huberty weighs in on the question "Why is AAPL so cheap?"
"Market Significantly Underestimates Apple's C2012 Earnings Growth" reads the headline of Katy Huberty's contribution to a 45-page Morgan Stanley report to clients Wednesday summarizing what the bank expects to be the big "investor debates" of 2012.
Her headline is an understatement, judging from the text of her note on Apple (AAPL). "Several data points," she writes, "give us confidence that our Bull Case of 55% revenue and 62% EPS growth is likely in C2012."
The market, by contrast, believes Apple's growth rate is unsustainable; the Street's consensus is that earnings growth will slow to from more than 70% in 2010 to 16% in 2012. "Indeed," Huberty writes, "Morgan Stanley's What's in the Price analyzer suggests Apple's stock price is pricing in –2% long term earnings growth."
Huberty believes the key to Apple's future growth -- the elephant in the room that the market is missing -- is China, where Apple is already the leading smartphone and PC brand and where intention-to-purchase, as measured by the bank's AlphaWise survey, is 4.5 times the iPhone's current market share. (See chart at right.)
Huberty, as usual, has offered three scenarios for Apple: A bear case (with a price target of $350), a base case ($450) and the aforementioned bull case ($600).
The search giant's $12.5 billion acquisition bid is a bold move that could reshape the mobile business. It's also fraught with potential pitfalls.
By Alex Konrad, contributor
FORTUNE -- Sometimes, plan B is pretty good. When Google missed out on buying Nortel Networks' patent hoard earlier this summer, few could have predicted it would make a stunning $12.5 billion cash bid for Motorola Mobility.
The move is sure to change Google's (GOOG) business, MOREAug 18, 2011 10:33 AM ET
Visualize four years of mobile phone warfare through Asymco's snake-like bubble charts
Horace Dediu, who has been pushing the envelope of data visualization for more than two years, has outdone himself with the interactive chart he posted on his Asymco.com blog Sunday afternoon.
Most conventional graphs display data over just two axes, X and Y. If you want to see how the data in those dimensions change over time, you end up having to draw a MOREPhilip Elmer-DeWitt - Aug 15, 2011 7:10 AM ET
The iPhone last quarter took in 5.6% of unit sales and 66.3% of the profit
Some readers complained when we ran a similar headline almost a year ago, accompanied by the bottom chart at right.
At the time, Apple (AAPL) had a 3% share of the global mobile phone market but was taking 39% of the profit -- a situation that didn't seem to bode well for its competitors.
Since then, the imbalance MOREPhilip Elmer-DeWitt - Jul 30, 2011 7:26 AM ET
It could, in theory, acquire every cellphone vendor except Samsung with cash alone
Asymco's Horace Dediu has been tracking Apple's (AAPL) growing liquid assets and the shrinking valuations of its mobile competitors, and he estimates that they soon will cross.
Apple's third fiscal quarter closes next week, and when it does, Dediu is pretty sure that Apple will have amassed more than $70 billion in cash, cash equivalents, short-term marketable securities and MOREPhilip Elmer-DeWitt - Jun 17, 2011 10:26 AM ET
Despite higher prices, sales to end users worldwide more than doubled
Gartner issued its "mobile devices" report for the first quarter of 2011, two weeks after rival IDC's.
Here's what Gartner had to say about Apple (AAPL):
Apple sold 16.9 million units to end users worldwide, more than doubling its sales of iPhones year-on-year. This market-beating growth came from all regions: the iPhone is now available in 90 countries from 186 CSPs [communications MOREPhilip Elmer-DeWitt - May 19, 2011 11:21 AM ET
Visualizing Apple's share of the worldwide mobile phone market in the first quarter of 2011
On Monday, we reproduced a pair of charts from Asymco's Horace Dediu showing how Apple (AAPL) overtook Nokia (NOK) in less than four years to become the world's No. 1 maker of mobile phones -- smart or otherwise -- in terms of revenue. See here.
In the charts at right, which Dediu posted Tuesday, he takes two MOREPhilip Elmer-DeWitt - May 17, 2011 7:20 AM ET
A tale of two charts
Apple (AAPL) overtook Nokia (NOK) last quarter to become the world's No. 1 vender of mobile phones -- smart or otherwise -- in terms of revenue. In terms of sales, it still has a lot of room for growth.
These charts are from a series Asymco's Horace Dediu began publishing last week as part of an analysis of the global mobile phone market for the first calendar MOREPhilip Elmer-DeWitt - May 16, 2011 7:17 AM ET
A second look at the claim that Apple's four-year conquest of the mobile market is adrift
Business Insider's Henry Blodget may come to regret -- if he doesn't already -- using the phrase "dead in the water" to describe the performance of Apple's (AAPL) iPhone in a comScore market share survey that seemed to show, as Blodget's headline put it, that "Android is destroying everyone."
The comScore survey to which Blodget was MOREPhilip Elmer-DeWitt - May 12, 2011 5:26 AM ET
Poor Andy Android gets some back alley surgery. For the hardcore only.
The Xperia Play, also more affectionately known as the Playstation phone is going to get some airtime at Europe's biggest mobile gathering, Mobile World Congress later this month. Until then, all you have to tide you over is this somewhat gruesome little reminder that the Playstation platform is moving into a virtual machine on Android.
Watch out, Android now has opposable thumbs.
via DroidNYTTno MORESeth Weintraub - Feb 3, 2011 1:55 PM ET
|GM's recalled Cobalt was a failure from the start|
|Pope Francis challenges the free market - The Buzz|
|How young tech millionaires invest|
|Americans have fallen in love with real estate once again|
|Your Internet security relies on a few volunteers|