Piper Jaffray analyst Gene Munster reports that NPD’s data, which counts only U.S. sales, implies that Mac sales for the March quarter ended down 5 percent year over year. And if that proves to be the case, Apple could potentially miss its Mac number when it posts financials next Tuesday. Caveat: Last quarter, Apple beat NPD data by 14 percentage points — something to keep in mind while mulling Munster’s assertion.

Anyway … the Street is looking for worldwide Mac sales of 4.5 million; Munster figures Apple likely sold less than that — somewhere between 4.1 million to 4.4 million, with sales slowed by a core MacBook Pro and iMac lineup that hasn’t been refreshed in more than a year. Those two product lines alone likely account for about 50 percent of Mac sales, so it’s certainly conceivable that diminishing consumer interest in them might affect Apple’s sales numbers.

But is this really anything to worry about?

Munster himself acknowledges that strong iPhone and iPad sales will more than offset any Mac softness. He still expects the company to beat consensus EPS and revenue estimates and, like many Apple watchers, he sees new Macs headed into the pipeline soon, following on the heels of Intel’s new Ivy Bridge processors. Said Munster, “We believe that MacBook, iMac, and potentially MacBook Air, lines could all be refreshed during the June quarter, which we believe would result in a reacceleration of Mac sales.”

One early customer is Rob Legato, the visual effects supervisor who won an Academy Award for his work on the Martin Scorsese-directed hit motion picture “Hugo.” Legato will be talking about ioFX with Fusion-io chief scientist and Apple co-founder Steve Wozniak at a conference in Las Vegas next week.

Fusion does some cool stuff with flash memory. Here’s the part where I roll out the old metaphor that has served me so well: In pretty much any computer, you can think of the processor as a fast-moving, highly efficient, type-A personality, constantly in a hurry, and always waiting impatiently for the rest of the system to give it more work to do. The slowpoke in the deal is the hard drive, which, though it’s already spinning at a super fast rate, just can’t get data to the processor fast enough. So the processor sits around, tapping its foot and looking at its watch, waiting for the other parts of the system that feed it data to work to keep up.

In high-performance computing, where there’s more data to be crunched than in most average computing situations, this is sort of a big deal. You want the processor to be as busy as possible — mainly because the systems are so expensive, and you want to get your money’s worth out of them — but also because jobs get done faster.

So Fusion-io’s stock in trade is a series of insert cards that bring flash memory right up next to the processor. The flash chips grab great big armloads of data and hold on to it, handing it off to the processor in a way that keeps it happy and busy and not impatiently waiting — at least not so much.

We’ve seen the technology brought to bear at places like Credit Suisse, which added Fusion’s flash cards to its trading systems. And its technology is also used in data centers belonging to Facebook and Apple.

On top of that, Fusion has relationships with all the big server vendors: Hewlett-Packard, IBM, Dell and SuperMicro all sell systems with Fusion-io on board.

Workstations are essentially heavily tricked-out PCs that are used primarily in two professions: Animation and special-effects work for movies and TV and computer-assisted design and modeling, used by folks who design buildings and cars and planes and pretty much anything else you can think of. They have the same problem that servers have — agitated processors constantly waiting for the rest of the system to catch up with them.

At this point, none of the workstation vendors are offering the card as an option, but if you’ve got a professional workstation — like, say, an Apple Mac Pro, which has three PCI Express slots — you might add one of these cards and speed up your work. In the meantime, the company is working with workstation vendors to get the ioFX insert cards certified. My guess is there will be more than a few visual artists who won’t bother to wait.

Fusion-io shares are up almost 11 percent — or $2.64 — to $27.30, as of 11 am ET; not so much on this news — workstations are kind of a low-volume market — but on an analyst report from Piper Jaffray suggesting that Cisco Systems may be close to a deal to add Fusion-io’s flash technology to its Unified Computing System platform.

The report goes on to suggest that Cisco could, over the next three or four quarters, become one of Fusion’s bigger customers, along with Facebook and Apple, and could account for more than 10 percent of Fusion’s business — which could, in turn, lead to a doubling of revenue this year. For the record, sales were $197.2 million in Fusion’s fiscal 2011. Do the math.

An interesting question, and while it’s far too early for a definitive answer, there are some early indications of which way things are headed.

Research outfit Piper Jaffray recently surveyed a small group of public-school IT managers (18) about their mobile device deployments and found 78 percent to be testing iPads and/or Chromebooks (6 percent said they were testing Android tablets).

That bodes well for Google and Apple both, though perhaps more so for Apple. For while the IT managers surveyed seemed evenly divided over whether the iPad or the Chromebook is the better educational tool (see tables below), their preference may not be the deciding factor in which device is ultimately deployed in their schools.

As in the enterprise world, many schools are considering implementing a “bring your own device” policy as a means of fostering a one-to-one student/device ratio. And if they do, the teen demographic’s fondness for iOS devices may skew things in the iPad’s favor.

“The majority of IT managers believed that ‘bring your own device’ policies would be the major driver in achieving a one-to-one ratio,” says Piper Jaffray analyst Gene Munster. “Given iPad’s current majority market share among teens (70 percent of teen tablet owners owned iPads), we expect iPad would be the device most likely desired by students in choosing their own devices. … Ultimately we expect school ‘bring your own device’ policies paired with the popularity of iPads among teens will lead to the iPad owning the educational tablet market.”

This according to Piper Jaffray’s 23rd semiannual survey of 5,600 American teenagers, which finds continued, rising interest for the device in the high-school demographic. The percentage of teens who own an iPhone rose to 34 percent from 23 percent in fall 2011, and 17 percent in spring 2011. Meanwhile, the percentage of those who hope to own one rose from 38 percent and 37 percent during the same time periods. The likely driver of those increases: The cheaper iPhone 4 and 3GS.

Good news for Apple, since the teen demographic is a critical component of long-term growth and, as Piper Jaffray’s Gene Munster notes, “historically interest in buying an iPhone has correlated to future market share gains among teens.”

Not surprisingly, tablet interest in the teen market is also on the rise, with much of it focused on the iPad. Thirty-four percent of the teens Piper surveyed said they already own a tablet, up from 29 percent from fall 2011. Of those, 70 percent had iPads, 19 percent some model of Android tablet and 11 percent a Kindle Fire.

Among teens who don’t yet own tablets, 19 percent said they planned to buy one in the next six months, with 80 percent of that group saying they planned to buy an iPad. And though there was a 3 percent decline in respondents interested in purchasing tablets between fall 2011 and spring 2012, the fact that most of them are leaning toward the iPad reveals a clear trend here. So again, good news for Apple, as Munster notes.

“We expect Apple to remain popular with younger users, which we believe could help establish a continually growing base of loyal users,” said Munster. “We believe that as Apple continues to discount prior model iPads (i.e. iPad 2 to $399) and eventually releases a smaller screen, lower priced iPad, iPad ownership will continue to rise.”

The comments follow a less than stellar fourth-quarter performance in which the gigantic e-commerce provider spent nearly as much money as it brought in the door — even during its busiest quarter of the year.

Profits for the quarter fell 58 percent, while annual earnings were cut nearly in half.

Some analysts were hoping that the end of the year would be a low point for margins and that Amazon would start growing in 2012 as it benefited from the steep investments made the prior year.

But that’s not part of the plan.

“We’re incredibly optimistic about the opportunity that we have, and that’s why we have invested the way we have and why we’re continuing to invest in the business,” said Amazon’s CFO Tom Szkutak in a conference call with analysts.

For clarity, Piper Jaffray analyst Charles Munster asked again: “So, your outlook in terms of investment philosophy hasn’t changed versus last quarter going forward?”

“No, no,” Szkutak said. “We are continuing to look as we always do. We learn every week, month and quarter about customer adoption. We are looking at a lot of positive things across the business in terms of adoption, specifically Kindle growth from a device standpoint and content that’s following that.”

Other categories seeing growth, he said, include clothing, consumables, consumer electronics and Amazon Web Services.

“There’s a lot of interesting opportunities that we continue to invest in. So we are pleased with the performance in Q4 and what it means going forward for us.”

Over the past year, Amazon has invested heavily in infrastructure, including 17 fulfillment centers around the globe. At the end of the year, it had 56,200 employees, up 67 percent year over year, with most of the hiring coming in operations and customer service.

It has also invested heavily in the digital content business, including the Kindle.

It’s widely assumed that Amazon is breaking even or taking a slight loss on the sale of each Kindle Fire. It’s also securing expensive partnerships with content companies across music, video and books, and giving some of that content away as part of the $80 Prime membership, which also includes free two-day shipping.

All of those are bets that Amazon is hoping will reap profits over the long term, as customers continue to consume after they purchase an e-reader or tablet or sign up for Prime.

So far, it’s too early to see how the investment is faring, especially when it comes to new categories.

“It’s very, very early,” Szkutak said, “but so far, we like what we see, so that’s why we are continuing down the path of adding more content and making Prime better. … Because we are investing a lot, we are making sure we understand it very well.”

A lot of details, like Kindle sales numbers, are still being kept under wraps, but he promised Amazon will someday share more about how it is doing.

Unfortunately, the market isn’t as patient. In after-hours trading, the stock was down almost 10 percent at one point. During the session, it ended up down, 8.7 percent, or nearly $17 , to close at $177.50 a share.

The machine is on a real growth tear. New metrics from research outfit NPD show Mac sales up 19 percent year over year in October.

That upward trend bodes well for the company as it heads into the holiday shopping season. Indeed, extrapolating from those numbers, Piper Jaffray analyst Gene Munster figures Apple will sell between 5.1 million and 5.3 million Macs during the December quarter, accounting for about 18 percent of overall revenue for the period.

That’s year-over-year growth of between 23 percent and 28 percent. Impressive. More so, considering the state of the PC market, which these days is suffering from slowing sales growth.

A new survey of educational technology directors found virtually all of them testing or deploying Pads in their schools.

Notably, none of them were testing or deploying Android tablets.

Now to be clear, this was a small survey. The sample size was only 25 — though, as noted by Gene Munster, the Piper Jaffray analyst who conducted it, the population of IT decision makers in the education field isn’t exactly vast. So that 100 percent metric is more a directional indicator than anything else.

Still, it does anecdotally confirm a larger trend, one Apple noted during the numbers portion of its last big media event. Nearly 1,000 K-12 schools have an iPad one-to-one program. In other words, at minimum, they are providing an entire classroom of students with their own iPads to use throughout their school day.

Other metrics reinforce that trend. Apple says that currently every state in the U.S. has a K-12 iPad education pilot program or deployment in place. And more than 2,300 K-12 school districts in the United States are running iPad programs for students or faculty, among them New York City and Chicago.

So Apple is beginning to deliver on the promise of handheld education. And as more educational content is customized for the iPad, it’s not hard to imagine the device gaining even more traction in the school market. At $499 before typical educator and student discounts, the iPad is price competitive with most PCs that schools currently purchase, which suggests Apple may be poised to capture a significant percentage of the developing tablet market in education.

As Munster observes, the schools and school districts in his sample currently have about 10 students per computer. But within the next five years, their educational technology directors expect them to have six students per tablet. And by “tablet,” says Munster, he means iPad, because the two were effectively synonymous in his survey.

Looks like Ron Johnson — the merchandising guru who created Apple’s retail stores and recently left the company for the CEO gig at J.C. Penney — may have been right when he predicted that the current generation of students may prove to be the last one with backpacks.

It will, of course, be Tim Cook’s first earnings call as CEO since taking over the job on a permanent basis this summer. There will naturally be questions from analysts about any changes in direction, however slight, that may result following the death of founder and Chairman Steve Jobs. Don’t expect much in the way of changes, nor in meaningful answers to questions about them. As much as Jobs is missed, Apple is in the strongest business shape it has ever been in, and shows no sign of slowing down.

Today’s earnings report, which will also be the final report of Apple’s 2011 fiscal year, will only make that fact more plain. Unless something went terribly wrong — and there is no sign that anything did — it will be Apple’s first year with sales north of $100 billion.

The consensus of Wall Street analysts says that Apple will report sales of $29.45 billion, which would be an improvement of more than $9 billion and 45 percent over the same quarter last year, and profits of $7.28 per share, which would be a 57 percent jump.

But as is always the case with Apple, the consensus has a way of being conservative. Sales of the iPhone 4, despite the buzz leading up to the release of the iPhone 4S, remained strong, said Gene Munster, analyst with Piper Jaffray, in a note to clients yesterday.

Munster expects Apple to report sales of 22 million iPhones in the quarter, slightly more aggressive than some estimates, by buyside analysts, of 20 million. “We believe sales of earlier iPhone models, like the iPhone 3GS, held up through the September quarter, which suggests global customers also remained interested in the iPhone 4 head of the anticipated update,” Munster wrote. The iPhone accounts for 46 percent of Apple’s sales.

That means good things for Apple’s gross profit margin, as components used in the older models became cheaper. Munster expects a gross margin of 39 percent, beating Apple’s previous guidance of 38 percent. However, if Apple maintains the gross margin it reported last quarter — 41.7 percent — it implies a much higher overall profit of $7.68 a share, Munster said.

On the iPad front, which accounts for 20 percent of Apple’s business, Munster expects Apple to report sales of 10 million units, which he admits may not seem like meaningful growth versus the year-ago quarter. But remember that last year’s September quarter came right on the heels of the launch of the iPad 1 2. The comparisons will be tough.

And don’t forget the Mac, another 20 percent of revenue. Market research firm NPD reported Mac sales up 20 percent in each of the three months of the quarter. Munster says the street consensus implies Mac unit sales growth of 16 percent, but the NPD numbers imply growth closer to 20 percent.

Finally, all eyes will be on Apple’s guidance for the holiday quarter just ahead. Apple will likely give its usual conservative guidance, which has averaged about 2 percent below the Street on revenue and 10 percent below the street on per-share earnings. But it typically beats the Street’s estimates by an average of 9 percent and 28 percent, respectively. Right now, the consensus view on the December quarter calls for sales of $36.6 billion and profits of $8.98. Plan accordingly.

Munster rates Apple shares “overweight” — the equivalent of “buy” — with a price target of $607. Yesterday, Apple shares hit another lifetime high of $426.70, and closed at $419.99. The shares are up about 27 percent this year.

Update: I corrected my reference above to the timing of the iPad 2 release.

Short answer: Lots.

Piper Jaffray analyst Gene Munster estimates that 18.8 million iPhone 3GS users will likely upgrade to the iPhone 4S, accounting for about 18 percent of Apple’s fiscal 2012 iPhone sales.

“We believe the number of iPhone 3GS units sold before the launch of the iPhone 4 serves as a conservative proxy for iPhone users that will likely upgrade to the iPhone 4S,” says Munster. “Note that our Aug-11 survey shows that among existing iPhone users, 94 percent expect to buy another iPhone as their next phone; Apple has built an annuity of smartphone buyers.”

Indeed. And Munster’s estimate includes only 3GS upgraders. It doesn’t account for existing users of the original iPhone, iPhone 3G, or even the iPhone 4. In other words, it’s likely that upgrade sales will be even greater than Munster predicts.

We’ll see. Currently, Munster is calling for 25 million iPhone units to be shipped in calendar Q4 of this year, a number he has already conceded may be too low.

“The company did not announce a redesigned iPhone, which many were calling an iPhone 5 and which may disappoint some investors,” Piper Jaffray analyst Gene Munster wrote in a research note to clients. “That said, we believe the iPhone 4S will meet or exceed unit expectations, as it represents the first iPhone launch at two major US carriers (Verizon and Sprint) along with KDDI in Japan.”

J.P. Morgan analyst Mark Moskowitz also bemoaned the lack of the so-called iPhone 5.

“We had expected the company to announce two new devices, an iPhone 5 and a 4-plus,” he said in a note to clients. “We are disappointed that Apple did not introduce a thinner form factor, but we see the feature set improvements in the iPhone 4S and the broader pricing strategy as positives.”

Moskowitz was particularly impressed with Siri, Apple’s new virtual assistant, and views it as an advantage that will raise the 4S above the pack of rivals that perpetually pursue it. “Once investors dig into Siri, we think its addition will overshadow the lack of full iPhone form factor change,” he said.

Goldman Sachs analyst Bill Shope took a similar view, arguing that the big news of the day was really the software that was on display. “Siri represents a more significant platform enhancement than we anticipated,” he said in a research note. “We believe this, coupled with iCloud and iOS 5, suggests today’s event represented a critical positive inflection point for the iOS platform overall.”

UBS analyst Maynard Um echoed Shope and went him one better, suggesting that the addition of Siri to the iPhone is one of those watershed innovations that will again change the way we interact with our mobile devices. “While some may be disappointed by largely unchanged design, Apple used its owned ecosystem to embed the Siri personal assistant throughout its OS to change the way we interact with phones. We believe Siri, iCloud & other iOS 5 features will continue to drive the next wave of demand.”

And in all likelihood they will. Sure, Apple did not meet some of the market’s hardware expectations. But what the market sometimes forgets is that it is software that truly differentiates Apple from its rivals.

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Again.

According to the latest metrics from NPD, Mac sales were up 22 percent in July and August, putting Apple on track to sell between 4.4 million and 4.6 million Macs in the September quarter.

That’s a new record.

Clearly, the July introduction of the company’s OS X Lion operating system and refreshes of the MacBook Air and Mac Mini have done much to juice demand for new Mac hardware, as Piper Jaffray analyst Gene Munster observed in a note to clients.

“We believe that Mac sales in the month of August benefited from new Mac products,” Munster wrote in a research note to clients. “On July 20th Apple released OS X Lion, a $29 download also included in all Mac sales on or after 7/20. Since the Lion release timing was known, Apple likely benefited from pent-up demand for Macs, which also explains soft NPD data in the month of June (+7% y/y). The company also released updated versions of the MacBook Air and the Mac mini on 7/20, which provided a tailwind for Mac sales in the month of Aug.”

If the company exceeds Wall Street estimates by an average margin, we’ll likely see earnings per share of $6.69 on revenue of $25.7 billion, a healthy beat over the $5.71 on $24.7 billion, says Piper Jaffray analyst Gene Munster. This during a quarter in which iPad 2 supplies were constrained and reports of a fall iPhone 5 launch tempered sales of the device.

Which is something to keep in mind as we look ahead to the September quarter.

If Apple can pull off the kind of financials Munster predicts for the June quarter under less than optimal conditions, what sort of numbers will it turn in for September, which will reflect healthy iPad supplies, the back-to-school season and, in all likelihood, new iPhone hardware?

Big ones.

“Looking ahead to the Sept. quarter, we expect a spike in iPhone sales to 21 million units with new hardware near the end of the quarter,” says Munster, in a note to clients. “The next-gen iPhone will be the first new iPhone launched at Verizon, and possibly Sprint, T-Mobile and international carriers as well, which could conservatively add 6 million units to our calendar 2012 iPhone estimate, taking growth from 35 percent to 43 percent.”

Add to that Mac and iPad sales tracking in line with expectations and you get a hell of a September quarter. Munster’s prediction: Apple will guide for $5.73 per share on revenue of $27.08 billion and then report earnings of $6.37 on $27.64 billion.

According to estimates by Piper Jaffray analyst Gene Munster, iOS app downloads will spike 61 percent in calendar 2011, while the average selling price of paid apps will rise 14 percent year over year.

“Smartphone users are showing an increasing appetite to use apps to add features to their phones and iOS has the leading app ecosystem,” Munster wrote in a note to clients. “Our App Store model shows that paid app ASPs appear to be rebounding in CY11. … After the initial race to the bottom in App Store pricing, we are seeing users pay up to add features and games to their iOS devices.”

Great news for Apple, which stands to collect an estimated $538 million in revenue from the App Store in calendar 2011. iPhone, iPad, and iPod touch users are now downloading over 32.3 million apps per day, says Munster — nearly triple the 11.9 million daily rate of iTunes tracks downloaded.

Below, Munster’s App Store model.

In January, U.S. Mac sales were up 20 percent year-over-year. In February they were up 12 percent.

And in March?

Up 47 percent, year-over-year.

That’s an average increase of 27 percent for the quarter. An impressive surge–more so considering that growth slowed in February ahead of the debut of the new Thunderbolt-equipped MacBook Pro line. March was the first full month in which those new machines were available and, according to Piper Jaffray analyst Gene Munster, sales are tracking ahead of the Street’s expectations for 3.6 million Macs sold in the quarter.

As I said yesterday, expect Apple’s second-quarter earnings report Wednesday to be another barn burner.

Sony Ericsson

Wireless handset maker Sony-Ericsson just issued a statement on the extent of disruptions it expects.

“Although the full impact of the current situation on our business will take additional time to assess, Sony Ericsson anticipates disruption to its supply chain operations,” the company said in a statement. “As part of our business continuity plan, we are in contact with all our key suppliers in the region and we are identifying the possible relocation of certain component manufacturing, and looking at secondary sources of supply.”

Intel and Qualcomm

Some analysts had speculated that plant shutdowns by Mitsubishi Gas would slow chip production by cutting supplies of certain chemicals used in the chip making process. Both Intel and Qualcomm told Bloomberg News that they’re careful to avoid situations where important supplies come from only one source.

Texas Instruments

Wireless chipmaker Texas Instruments said on Monday that a plant in Miho, about 40 miles northeast of Tokyo, had suffered “substantial damage” and that it may be July before the plant is back up to full production. The plant is responsible for about 10 percent of TI’s overall production, and about a third of its capacity is devoted to its Digital Light Processor, and the rest to analog components. Shares of Diodes, Inc., a TI rival, jumped when analyst John Vinh of Collins Stewart said the company stood to benefit from TI’s troubles.

Oracle

Analyst Derrick Wood of Susquehanna Financial said in a note to clients that fears about Oracle’s exposure to the Japanese market, which has driven the shares down in recent days, are probably overblown. Even though Japan accounts for about five percent of Oracle’s revenue, he said, fears are “likely overdone.” Most of Oracle’s revenue from Japan comes from recurring maintenance fees, so the risk of a serious hit to sales is minimal.

Raw Materials

The Wall Street Journal notes that Japan supplies about 90 percent of the world’s bismaleimide triazine, an important material used in making printed circuit boards for wireless phones. Japan also supplies much of the world’s silicon wafers that are used to make chips.

(Map via Wikimedia Commons)

By weekend’s end, Piper Jaffray analyst Gene Munster and his team were unable to find a single iPad 2 available for walk-in purchase at any of the retail outlets they called (Apple Stores, Best Buy, etc.), leading Munster to conclude that Apple likely sold as many iPad 2s in its first day at market as its predecessor sold in its first week.

“Given extended lead times at the online store and sold out retail stores, we believe iPad 2 sales exceeded Apple’s initial expectations,” Munster said in a research note Sunday. “We continue to believe that Apple sold between 400,000 and 500,000 iPad 2s over the weekend (vs. 300,000 original iPads over launch weekend). And we note that the weekend number for iPad 2 is essentially a launch day total because stock was so quickly depleted and not replenished over the weekend. iPads are sold out across virtually all channels.”

Munster figures Apple will sell 5.5 million iPads this quarter, easily topping the 3.27 million the company sold during the original iPad’s debut quarter last year. And he describes that estimate as “conservative.” More bullish predictions–the one offered up by Ticonderoga Securities analyst Brian White last Friday, for example–put first weekend iPad 2 sales at one million. “Last year, Apple sold over 300,000 iPads during the first day of availability on April 3 and 1 million iPads were sold in the first 28 days,” White explained. “This year, we would not be surprised if Apple sells up to 1 million units of the iPad 2 over the weekend, while the iPad 2 launch begins in 26 other countries on March 25. This takes into account a broader distribution network versus the iPad 1 launch, upgrades to iPad 2 and new tablet buyers coming into the market.”

Apple hasn’t yet released early sales figures for the iPad 2, though I imagine we’ll see some soon–particularly if they’re as impressive as they clearly seem to be. In the meantime, the company is saying only that “demand for the next generation iPad 2 has been amazing.”

[Image credit: Boston Tweet]

The rise of mobile technology, especially mobile phones, is threatening to displace the personal computer and to create new technology leaders, they write, with Qualcomm, for example, surpassing Intel in importance.

“Intel is in peril as it is trapped in the old paradigm that will be cannibalized as the new paradigm accelerates,” the authors write.

“In the 4th wave, connectivity is king and QCOM and the carriers such as AT&T and Verizon Communications are positioned to benefit as are tower companies like American Tower.”

Read the rest of this post on the original site

Piper Jaffray analyst Gene Munster figures that if the iPhone continues to grow apace with the broader smartphone market at a rate of roughly 35 percent in calendar 2011, Apple could conceivably sell over 200 million iPhones in 2015.

Today, Apple’s addressable market is about 1.7 billion subscribers thanks to distribution deals with a multitude of carriers worldwide. And according to Munster, there’s further upside still. “We believe Apple still has meaningful opportunity remaining to add to its addressable subscriber base,” he wrote in a note to clients. “The recently added Verizon has over 90 million subs, and with the launch of the CDMA iPhone, Apple could add China Telecom (also 90 million subs) and Indian carrier Reliance (110 million subs). We believe Apple could add China Telecom and/or Reliance to its list of carrier partners in CY11.”

In other words, though Apple’s current carrier agreements give it access to 1.7 billion subscribers, it’s still just beginning to tap into a number of critical markets. For evidence of this, one need only look back to Apple’s last earnings report. iPhone sales in Asia more than doubled in Q1. Revenue from China was a staggering $2.6 billion, and according to COO Tim Cook, Apple stores in the country were among the company’s highest traffic and revenue stores in the world.

As Oppenheimer analyst Yair Reiner said in a note raising his target price on the company’s shares to $425, “It’s no surprise when Apple tops expectations, but it’s fairly rare to see it trounce Street’s targets on almost every line. Bottom line: big as Apple is, it shows no sign of slowing, not with the Verizon iPhone launching in 2Q11 and China growth accelerating to 400% year-over-year.”

Piper Jaffray analyst Gene Munster raised his price target to $483 from $438, observing in a research note that this quarter was the first in three years in which Apple issued EPS guidance above Street consensus (10 percent ahead of the Street). “Apple’s vision for itself as a mobile device company has come to fruition,” he said. “[The company] guided the March quarter more aggressively than it typically guides the out quarter relative to the Street. We see this as sign that it is bullish on the prospect of the iPhone at Verizon.”

At Deutsche Bank, Chris Whitmore slapped a price target of $440 on AAPL. “Apple continues to show impressive growth despite its size and is well positioned to benefit from the confluence of three major product cycles, namely: iPad, Macs and iPhone,” he told clients. “These product cycles coupled with greater geographic expansion (Verizon iPhone, iPad 2, iPhone 5, China expansion, Carrier deals) increases our confidence in AAPL’s ability to continue to outperform.”

At Barclays, Ben Reitzes raised his target to $450 from $420 to account for higher unit sales across Apple’s product portfolio. His take on Q1: “This very strong quarterly report left no holes to punch in the fundamental story. We believe the above-consensus revenue and EPS guidance and new products to come bring potential for further upside. We continue to believe the company is in very capable hands with COO Tim Cook and the rest of the team.”

Raising his price target to $450 from $430, Goldman Sachs analyst Bill Shope said essentially the same thing. “While the news of Steve Jobs’ medical leave may continue to add some headwinds to the share price momentum in the near-term, we continue to believe improving underlying fundamentals and the strength of Apple’s overall management team will counter this uncertainty. In addition to the strength of the December quarter and the recent Verizon iPhone release, we believe the next-gen iPad launch and the June iPhone refresh will serve as critical catalysts in the first half of 2011.”

UBS analyst Maynard Um ratcheted his price target up to $465 from $415, predicting what “could be the largest pre-order & sales ever experienced by Verizon Wireless for the iPhone” and continued success for the iPad. Said Um, “Though there has been increasing concern with regard to ramping competition, we see Apple’s ecosystem and ease of use as offering a more compelling value proposition than its competitors today and expect its tablet market share to more closely match its iPod market share in the mp3 player market rather than its share in the more fragmented smartphone market.”

And, finally, there was Ticonderoga’s Brian White, who took a “F@&k Everything, We’re Doing Five Blades” approach and raised his target price to a staggering $550. That’s about 60 percent higher than the price Apple shares have been trading at recently, a target that if the company were to hit, would value it at $506.6 billion. Said White, “Despite Monday’s news regarding Steve Jobs’s medical leave of absence, we believe it will be difficult to keep Apple’s stock from reaching new highs given the much stronger than expected quarter and outlook reported by the company.”

Bullish, or another word with a lot of the same letters? Hard to say. But as you weigh that question, remember this: This is the 33rd consecutive quarter in which Apple has beaten estimates. And this time it beat them by $2 billion.

However, Piper Jaffray’s Gene Munster did say it would be helpful to know just how far out Apple plans its products.

Chief Operating Officer Tim Cook wouldn’t say whether Apple plans its products one year out or five years out.

“That’s a part of the magic of Apple,” Cook said. “I don’t want to let anyone know our magic because I don’t want anyone copying it.”

He did say the company is happy both with how it is doing now and with what is to come.

“In my opinion, Apple is doing its best work ever,” he said. “We are all very happy with the product pipeline.”

Cook noted several times how Apple is struggling to keep up with demand for the iPhone. He also said that the company has “unparalelled breadth and depth” among its employees.

“Excellence has become a habit,” Cook said. “We feel very very confident about the future of the company.”

Cook said that despite recent blowout sales, Apple still has just a tiny portion of all computer sales or all phone sales.

“It would seem like there is enormous opportunity still there,” he said.

Update, 3:02 pm PT: Apparently no one wanted to be “that guy” and ask a question related to Jobs’s health. The conference call just ended and Munster’s question was as close to the subject as any analyst was willing to veer. All the rest of the questions were directly product related.

• A lot of iSales: Apple sold 7.3 Million iPads, 16.2 Million iPhones in December Quarter
• Apple’s Earnings Insanely Great

After all, the CDMA iPhone Apple’s built for Verizon promises to expand the company’s addressable market domestically and abroad. The device isn’t exclusive to Verizon, which means Apple’s almost certainly going to pursue additional partnerships with CDMA carries in other parts of the world– China Telecom and SK Telecom, for example.

“We see this as the single biggest lever Apple has to pull in calendar 2011,” said Piper Jaffray analyst Gene Munster, who raised his iPhone unit estimates by 2.5 million because of the Verizon deal.

JP Morgan analyst Mark Moskowitz took a similar view, suggesting that the Verizon iPhone could boost Apple’s EPS by at least $1.25 per annum. “For Apple, we believe that this new carrier relationship will be a major catalyst for U.S.-related iPhone sales over the next 18-24 months,” he wrote. “In our view, Verizon’s wireless network offers a higher quality user experience compared to AT&T’s. We expect that this dynamic will drive a significant numbers of subscribers to switch to Verizon, in addition to the adoption rate of the iPhone by existing Verizon subscribers.”

At Standard & Poor’s, Clyde Montevirgen wrote that the deal more than doubles Apple’s U.S. market opportunity and said he expects incremental unit sales of 7 million via Verizon in calendar 2011.

UBS analyst Maynard Um issued this bullish call: “Apple has set itself up for a solid year of iPhone sales. Today’s agreement with Verizon Wireless should provide additional momentum to already strong iPhone unit growth. We also expect the company to launch the iPhone 5 this summer which would serve as another catalyst for this product segment. We currently expect AAPL to ship 67.3mn iPhone units in CY11.”

And finally, over at William Blair, analyst Brian Nugent offered a few observations about the Verizon iPhone’s effects on other industry players (beyond AT&T), specifically Research in Motion and Qualcomm. For RIM, he views it as a clear negative. “While dependence on Verizon has declined significantly in the last year, Verizon still accounts for roughly 10% of RIM’s sales (by our estimate),” he said. “An iPhone at Verizon will further pressure RIM’s market share and net subscriber additions in the United States, and could hurt its average selling prices and gross margin.”

But for Qualcomm, it’s a boon. “Although we view the introduction of the iPhone at Verizon as positive for Qualcomm (which we believe is the baseband provider in the iPhone), given that Qualcomm has over 95% of Verizon baseband share, today’s announcement may not be material to the company in the near term,” he said. “On a longer-term basis, we view today’s announcement as the beginning of a closer working relationship between Apple and Qualcomm that may potentially extend beyond the Verizon handset deal.”

PREVIOUSLY:

• AT&T: Verizon iPhone? Whatever.
• Verizon iPhone: What, AT&T Worry?
• Why Verizon’s iPhone Won’t Be So Bad for RIM
• How Might the Verizon iPhone Differ From the iPhone 4 (Besides Being Able to Make Calls)?
• Tired: Speculating About Verizon iPhone. Wired: Speculating About Verizon iPhone Sales.
• Verizon iPhone to Debut With Unlimited Data Plan
• Apple CEO Likely to Appear at Verizon iPhone Event
• Verizon Event Set for Tuesday–iPhone Time

Or, rather, how has it been responding? Because it’s clear the company has been preparing for this moment for some time. Last year, it accelerated upgrade eligibility for iPhone customers, making it easier for them to get the iPhone 4 when Apple released it. And it locked them all into two-year contracts in the process. And then, last week, it drastically reduced the price of the iPhone 3GS, halving it to $49 from $99.

Presumably, AT&T could follow this with additional pricing promotions that could further limit iPhone subscriber defections to Verizon, though at this point one could argue that it’s as well prepared for its loss of iPhone exclusivity as it will ever be.

Why? Two big reasons:

1. According to Piper Jaffray analyst Christopher Larsen, nearly 80 percent of AT&T iPhone users are currently on family or corporate plans, which makes switching to a new carrier a difficult proposition.
2. Approximately 75 percent of them still have at least a year left on their contracts.

And there’s a third wild-card reason as well: How Verizon’s network fares after a big influx of data-heavy iPhone subscribers. That’s tough to predict, but two analysts I’ve spoken with said they expect Verizon to suffer some network growing pains, though not as bad as the ones suffered by AT&T. Ultimately, Verizon is starting off with a better network, and CDMA is said to be a more spectrally efficient standard than UMTS.

So will there be some AT&T subscribers who switch to Verizon when it begins selling the iPhone? Certainly. But they may not be nearly as large in number as you might think.

“AT&T has done everything it can,” Needham and Co. analyst Charlie Wolf told me this morning. “The company locked in a lot of iPhone owners by waiving early termination fees last summer. It’s moved aggressively to add a bunch of BlackBerrys and Android phones. And it should be remembered that AT&T will continue to sell the iPhone. So I doubt that the loss of subscribers to Verizon will be that large. But it could be material as it pertains to the bragging rights between AT&T and Verizon. “

PREVIOUSLY:

• Why Verizon’s iPhone Won’t Be So Bad for RIM
• How Might the Verizon iPhone Differ From the iPhone 4 (Besides Being Able to Make Calls)?
• Tired: Speculating About Verizon iPhone. Wired: Speculating About Verizon iPhone Sales.
• Verizon iPhone to Debut With Unlimited Data Plan
• Apple CEO Likely to Appear at Verizon iPhone Event
• Verizon Event Set for Tuesday–iPhone Time

Near the close of regular trading on Monday, Apple’s shares were trading at $329.43, up $6.87 or more than 2 percent, giving the company a market value of roughly $302 billion.

Meanwhile, Piper Jaffray analyst Gene Munster issued his forecast of what’s coming for the new year, including popular predictions of a Verizon iPhone and new iPad, followed later in the year by an update to the iPhone as well as new Mac lines. As for the Verizon iPhone, it’s not a new prediction, with Munster having already guesstimated that Verizon will ship 9 million iPhones next year.

Munster also sees improved cloud services from Apple as likely, as well as the possibility that we will see iPads offered with a subsidy from carriers, presumably in exchange for customers agreeing to a long-term contract. Currently, iPad owners don’t get a discount (in fact the 3G version costs $130 more), but they also don’t agree to pay each month for the wireless service.

The “What will Apple do” question is likely to preoccupy more than just Wall Street. Expect many of the product introductions at this week’s Consumer Electronics Show to be examined through the lens of how they will compete with both current and expected products from Apple, which is skipping the show as usual.

Longer term, Munster said he still expects Apple may expand its television “hobby” and start making its own line of TVs.

“We are modeling for Apple to sell an incremental 2.5 million iPhones with the addition of Verizon, which may be conservative,” Munster explains. “We are modeling for iPhone units at AT&T to be down 30 percent year-over-year in 2011 as the US mix shifts towards Verizon, and as AT&T subs wait to upgrade their iPhones until they are off-contract and can purchase an iPhone on Verizon.”

Interesting, yeah? There is a caveat, though. If iPhone sales at AT&T remain flat year-over-year in 2011, Verizon may see as many iPhones next year as its rival did in calendar 2010. And that would add another 10 million units to Munster’s 2011 iPhone estimate. So: Nine million or 19 million.

The latest domestic sales data from NPD shows Apple on pace to sell between 4.1 million and 4.3 million Macs in the December quarter. Which would make for another record breaker in an ever-lengthening string of them. After all, Apple’s U.S. Mac sales are up 20 percent year-over-year for the first two months of the current quarter. And with international sales growing faster than domestic, the company will likely see between 22 percent and 28 percent year-over-year growth.

If that trend continues–and with the recent refresh of the iMac and MacBook Air lines, there’s no reason to think it won’t–2011 could end up being the “Year of the Mac” as well.