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Apple could see $1,000 per share on significant iPhone and Mac updates, analyst

Expect success based on significant updates to the iPhone and Mac, the move to the enterprise, the Apple Television, and China’s growing middle class

Piper Jaffray analyst Gene Munster has reiterated his belief that Apple could hit $1,000 a share this year due to significant updates to the iPhone and Mac, the iPad and iPhone clearing a path to the enterprise, the Apple Television, and China's growing middle class.

Back in April Munster was predicting $910 a share while Topeka Capital Market's Brian White pushed the limit to $1,001 a share. At the time Munster agreed with the potential of $1,001 a share, but didn't change his prediction. Munster still isn't changing his projection of $910 a share, but he is suggesting that the $1,000 estimates are not completely crazy.

Munster gave a number of reasons for his positive outlook. He believes that there are 'meaningful' updates on the way for the Mac and iPhone 5, with Retina displays and Ivy Bridge processors coming to the new Macs; and a major update to the iPhone described by Munster as "the biggest device upgrade cycle in smartphone history".

Munster also expects that the Apple TV will be announced this year, and shipped in 2013.

Munster thinks that smartphones will continue to be subsidised for the next 2-3 years. He also believes that Apple will continue to maintain its 40% gross margin, "assisted by iPhone becoming a larger part of total sales", reports Forbes.

He believes that Apple will continue to demand good component prices due to it's "heart transplant strategy where the company tries to eliminate old products from its offering as quickly as possible."

Also credited is Apple's expansion in China, in particular Apple's growth will be down to China's "growing middle class".

Munster also notes that tablet sales are expected to grow, and iPad will remain market leader. He sees the potential for 66 million iPads, two-thirds of a projected market of 99 million in total tablet units for 2012. Eventually the tablet market will be bigger than PCs, Munster predicts.

Munster mentions growth in the enterprise market led by consumer adoption of the iPad and iPhone. "We believe the company is focused on delivering the best consumer electronic products possible and therefore will rely on consumer adoption to drive enterprise adoption," he wrote.

He also notes that although Apple "runs the iTunes store at just above break-even" and applies the same strategy to the App Store and, ultimately, the Apple Television. He notes that the company has 225+ million registered iTunes accounts and 125+ million iCloud accounts, "Apple has one of the largest registered user bases in the tech world."

Apple's share price closed at $565.32 on Friday.


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