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.

“Apple’s stock could face headwinds for several weeks as the media feeds on a yet-to-be-determined mix of speculation and disclosures about Jobs’ future role at Apple,” Oppenheimer analyst Yair Reiner said in a note to clients today. “At the same time, Apple’s investors will theorize and worry about what Jobs’ status will mean for future innovation at Apple. But this worry stage will likely run out of fuel relatively quickly, because convincing evidence of how Jobs’ presence or absence is impacting Apple’s fundamentals won’t present itself for years. Lacking evidence, investors will shortly go back to trading AAPL’s stock based on measurable fundamental performance.”

J.P. Morgan’s Mark Moskowitz was similarly optimistic. “While not knowing the details behind the current medical leave, we point out that Mr. Jobs has demonstrated a great resolve to improve his health previously, emboldened by the attitude and philosophy that helped him lead Apple’s remarkable rise over the past decade,” he writes. “In our view, Mr. Jobs and his team have made Apple become the primal force in shaping consumers’ technology-driven ‘way of life.’ While the competition is increasing in the areas of smartphones and tablets, we do not expect Apple’s technology and user experience leadership to fade.”

PREVIOUSLY

• Steve Jobs’s Finest Product–Apple–Won’t Break Down
• Steve Jobs Asked for Privacy–and He Deserves It This Time
• Apple Shares Down Nearly 8 Percent in Frankfurt on News of Jobs’s Medical Leave
• Citing Health, Steve Jobs Steps Away From Apple, Again
• Deutsche Bank Joins the Running of the Apple Bulls
• Jobs: “I’m Vertical, Back at Apple and Loving Every Day of It”
• Apple Investors Are Wusses
• When Steve Jobs Said “Stay Hungry. Stay Foolish,” He Did Not Mean This Foolish
• AAPL Sauce
• Apple’s Steve Jobs: “I Have Decided to Take a Medical Leave of Absence”
• The Entire Letter: Steve Jobs Explains His Health Problem: “Hormone Imbalance”–Predicts Recovery by Spring and Will Stay On as CEO
• Ain’t Nobody’s Business If Jobs Is or Isn’t

Gene Munster, Piper Jaffray
While Apple had yet another stellar quarter, investors will wonder if the pace of growth is sustainable. We believe it is, given Apple has small market share in large, growing markets. We estimate that if Apple meets our Mac, iPhone, and iPad targets in 2011, the company will have only about 5 percent market share in the phone and computer markets, a number that will likely grow over time.

Mike Abramsky, RBC
Apple is now benefiting from what we are dubbing a “Cascade of Cool”–three strong, synergistic product cycles–iPhone, iPad and Mac, combining together synergistically to drive the strongest outperformance in 4 years–with more to come, as Apple remains well positioned against large, addressable markets. Additional drivers/catalysts expected include international rollouts, voice to Smartphone adoption, PC to Mac migration, enterprise adoption.

Chris Whitmore, Deutsche Bank
While current quarter results were very impressive, we see open runway for the 3 major product cycles ramping in C2H10 and beyond which should drive continued momentum. The iPad is off to a very strong start with demand characterized by Apple as “amazing” with widespread appeal to the mass market (i.e. already moved beyond “early adopters”). iPhone 4 demand is outstripping supply despite widely publicized antenna concerns (which we expect to dissipate). Both products continue to ramp internationally (iPhone with 154 carriers in 88 countries) while iPad will be available in 9 additional countries by July 23rd. Finally, we expect the recently refreshed MacBook lineup (and future updates) to perform well in the back-to-school and holiday seasons.

Yair Reiner, Oppenheimer
We were expecting Apple to deliver a strong F3Q10. But we hadn’t girded ourselves for a mammoth revenue forecast, and neither, we believe, had the Street. To those (like us) who fretted that Antennagate might hamper iPhone sales, Apple’s guidance seems to say “antennagate schmantennagate.” Apple is seeing a swell of demand across its product lines and increasingly compelling evidence that the iPhone has unleashed a halo effect in the international markets. These are facts on the ground that even Apple’s stubbornly bearish guidance can’t resist.

Charlie Wolf, Needham and Co.
This is the Apple story in a nutshell. The company remains a small fish in some very large ponds. Despite a quadrupling of shipments over the past several years, the Mac, the major surprise in the third quarter with record shipments of 3.5 million, still commands a small share of the PC market. The iPhone’s share of the fast growing smartphone market is likewise comparatively small. And while the iPad is in a class of its own, it’s beginning to cannibalize the much larger netbook PC market. Indeed, the iPad has jumped to the mainstream market, passing through the early adopter market in an instant.

Maynard Um, UBS
Guidance was much stronger than expected as the rev outlook of ~$18b was uncharacteristically higher (by $1bn) than Street ests. We believe AAPL typically guides to a conservatively achievable target, making guidance all the more impressive. With AAPL selling nearly every iPad/iPhone 4 produced, key variable to magnitude of pot’l upside will likely be the pace of capacity increases.

Katy Huberty, Morgan Stanley
The market underestimates the earnings power of Apple’s mobile Internet devices. We view the combination of new product launches, broader distribution (carrier, international, enterprise), more attractive pricing and strong upgrade rates as the key demand drivers over the next two years. Additionally, we believe iPhone, iPod Touch and iPad margins will remain above the corporate average, driving EPS upside as mix improves.

As you can see, Apple’s financial performance has sent the analyst community into paroxysms of praise. Not a week after its Antennagate press conference, the company already seems to have extricated itself from the public relations quagmire surrounding the iPhone 4’s reception woes.

As RBC analyst Abramsky quipped, there’s no deodorant like success.

So if, come January, Verizon (VZ) were to offer the iPhone, what might happen?

Well, for one thing, the addition of a second U.S. carrier would likely slow sales of smartphones running Google’s (GOOG) Android OS a bit. “Adding Verizon would significantly blunt the competitive threat from the Android platform, whose favored status at Verizon has been critical to its building momentum,” says Oppenheimer analyst Yair Reiner. “We suspect the momentum could turn in the face of direct competition from the iPhone.”

For another, Apple (AAPL) would sell a hell of a lot more iPhones. Verizon has a post-paid subscriber base of 83 million. And according to Reiner, it would likely generate 12 million new unit sales for Apple next year. That would translate to more than $7 billion in incremental revenue and more than $3.00 in incremental earnings-per-share.

That’s a fairly bullish scenario–perhaps a bit too bullish. RBC analyst Mike Abramsky sees a deal with Verizon spiking iPhone sales, but he believes that spike would be dulled a bit by AT&T’s (T) decision to make its subscribers eligible for an iPhone 4 a year before their contracts expired and a few other things as well. “Prior Canadian and UK iPhone transitions to multi-carrier distribution [stimulated] an upgrade cycle and [expanded] the local smartphone market,” Abramsky explains. “However, this is offset by: 1) majority of potential iPhone buyers had already switched to 1st network; 2) Android smartphones now offer reasonable competition; and 3) iPhone upgrade offers at 1st carrier locks in existing users.”

Still, as I’ve written here before, a move to nonexclusivity in the U.S. would certainly brutalize AT&T’s subscriber base, at least a bit. Analysts have long said that a material number of AT&T iPhone users would flock to Verizon’s superior network given the chance.

For most folks, the device is a discretionary purchase.

“When we asked people why they were buying the iPhone 4, the vast majority indicated that their decision was driven by desire rather than need. Folks didn’t line up because their old phone was failing them in some way; they lined up because the iPhone tugged at them. Only 26 percent of the people we spoke with said that they needed a new phone. The remaining 74 percent were enticed into a discretionary purchase,” Reiner reports.

“Of respondents, 50 percent said that the iPhone 4’s new features pulled them in,” the analyst added. Of those surveyed, 11 percent said they had wanted to buy an iPhone for some time and were just waiting for the moment when they could buy the last version. Thirteen percent reported that they always buy the latest iPhone when it comes out.”

Of the 76 percent of respondents who already owned an iPhone, most were upgrading it after just 14.7 months–quite a bit faster than typical smartphone replacement cycle of 21 months. (Click on charts below to enlarge.)

“Production of the cases will begin in February, so everything points to a second-quarter launch right now,” an unnamed source told Reuters. “It doesn’t take that long for the company to assemble the PC together, but a second-quarter shipment date is what we’re looking at now.”

This isn’t the first time we’ve heard such predictions. Last month, Oppenheimer & Co. analyst Yair Reiner said his checks into Apple’s supply chain indicated that “the manufacturing cogs for the [device] were creaking into action” with an eye toward a spring launch.

Additionally, sources this week told The Wall Street Journal that Apple would ship a tablet device to customers in March.

That’s the word from Oppenheimer & Co. analyst Yair Reiner, who says his checks into Apple’s supply chain indicate that “the manufacturing cogs for the [device] are creaking into action.” According to Reiner, the tablet will have a 10.1-inch multitouch LCD display and a price of $1,000.

Apple (AAPL) plans to produce as many as one million units per month. So assuming Apple needs to build five to six weeks of inventory before launch, we can expect the tablet to arrive at market some time in March or April 2010. In preparation, the company has evidently been evangelizing about the device to the publishing industry.

“Contacts in the US tell us Apple is approaching book publishers with a very attractive proposal for distributing their content,” Reiner wrote in a note to clients today. “Apple will split revenue 30/70 (Apple/publisher); give the same deal to all comers; and not request exclusivity. We believe the typical Kindle/publisher split is 50/50, rising to 30/70 if Kindle is given ebook exclusivity.”

Noting dissension in the ranks, Reiner adds, “As innovative as it is, we believe the Kindle has disgruntled the publishing industry (book, newspaper, and magazine) by demanding exclusivity, disallowing advertising, and demanding a wolfish cut of revenue. The tablet is set to change that. It should also make ebooks more relevant for education by simplifying functions such as scribbling marginalia.”

PREVIOUSLY:

• The Apple Tablet Is Delayed? So What?
• $1.9 Billion in Capex? What’s Apple Planning?
• Apple’s Tablet: Read Different?
• Imaginary Demand for Mythical Apple Tablet Exceeds All Estimates
• Apple Tablet Coming to AT&T?
• New From Piper Jaffray Analyst Gene Munster: The Apple iPad
• Rumored Apple Netbook Actually an E-book?
• iTablet: Apple’s Killer App for Higher Ed
• iFugly

In a note to investors today, Oppenheimer analyst Yair Reiner warned that supply-chain issues may have prevented Apple (AAPL) from selling the seven million iPhones consensus estimates have been predicting. “During the iPod event on Sept. 9…Apple implied that ~3.5M phones had been sold with only 21 days left in the quarter,” Reiner wrote. “Subsequent checks showed the iPhone 3GS sold out in many markets. Something was clearly preventing Apple from shipping to demand.”

Apple was able to resolve those issues, but they lasted long enough that Reiner fears consensus estimates implying that the company sold an additional 3.5 million iPhones in the final weeks of the quarter may be a bit too aggressive.

That said, it’s worth noting that Piper Jaffray analyst Gene Munster pointed out the same supply issues in a research note of his own earlier this week and came to a very different conclusion. Munster is calling for iPhone sales of about 7.5 million units in the Sept. quarter.

Who’s right? We’ll find out Monday, when Apple reports earnings.

In a note to investors today, Oppenheimer analyst Yair Reiner warned that supply-chain issues may have prevented Apple (AAPL) from selling the seven million iPhones consensus estimates have been predicting. “During the iPod event on Sept. 9…Apple implied that ~3.5M phones had been sold with only 21 days left in the quarter,” Reiner wrote. “Subsequent checks showed the iPhone 3GS sold out in many markets. Something was clearly preventing Apple from shipping to demand.”

Apple was able to resolve those issues, but they lasted long enough that Reiner fears consensus estimates implying that the company sold an additional 3.5 million iPhones in the final weeks of the quarter may be a bit too aggressive.

That said, it’s worth noting that Piper Jaffray analyst Gene Munster pointed out the same supply issues in a research note of his own earlier this week and came to a very different conclusion. Munster is calling for iPhone sales of about 7.5 million units in the Sept. quarter.

Who’s right? We’ll find out Monday, when Apple reports earnings.

Incidentally, Munster doesn’t put much stock in all this talk of a $99 iPhone and cheaper data plan, either. He speculates that a low-end iPhone might price out at about $149 and gives slim odds to the idea that AT&T will lower its data plan rates.

Incidentally, Munster doesn’t put much stock in all this talk of a $99 iPhone and cheaper data plan, either. He speculates that a low-end iPhone might price out at about $149 and gives slim odds to the idea that AT&T will lower its data plan rates.

Oppenheimer’s Yair Reiner trimmed his iPhone targets, but raised his MacBook forecasts, and increased his gross margin estimate. For iPhones, he now sees 4.8 million units in the December quarter, down from 7.5 million. His FY ’09 unit forecast drops to 21.3 million from 27 million. He also sees lower ASPs than previously, due to the impact of the strong dollar on international sales. On the other hand, he raised his Q1 MacBook estimate to 1.61 million from 1.54 million; for desktops, he trims to 960,000, from 1.02 million. His gross margin estimate for the quarter increases to 31.5 percent from 31 percent, to reflect lower component pricing.

Read the rest of this post

Certainly the decline in Apple’s share price, which has been halved since the beginning of the year, would seem to point to the latter. But other metrics suggest the company will still turn in a strong performance, even amid the current macroeconomic travesty. According to the latest PC vendor shipment numbers from Gartner (IT), Apple showed nearly 30 percent year-over-year growth in the third quarter, its market share rising to 9.5 percent from 7.7 percent. In the United States Apple’s share of the laptop market grew by 60 percent, year over year, rising from 6.6 percent to 10.6 percent in the second quarter of this year. Meanwhile, its share of the operating system market rose nearly four-tenths of a percentage point in September. Given those metrics and the fact that the quarter that ended Sept. 30 is the first in which the impact of the iPhone 3G will register on Apple’s income statement, it seems reasonable to expect a strong showing from the company come Tuesday. “The upshot is that even against a very bleak macroeconomic backdrop,” said Yair Reiner, an analyst at Oppenheimer & Company, “Apple should be able to continue growing.”

Last month, Reiner cut his rating on the maker of touchscreens used in mobile phones and other devices–on the theory that the aggressive $199 price tag on the new Apple (AAPL) iPhone 3G “will limit the market opportunity for Synaptics’ stable of potential customers.”

Today he changed his mind and flipped back to an Outperform rating, from Perform. “We downgraded a month ago on the thesis that the iPhone’s price reduction would curtail the market opportunity for the competing touchsceen handsets that Synaptics supplies,” he wrote today. “Our thesis was wrong.”

Read the rest of this post