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Caris & Company today announced that due to unusual sequential growth in iPod sales this quarter the company plan to increase its price target on shares of Apple adding that they expect Apple to ship 25 million iPhones per year by fiscal 2009.
"We are increasing our price objective on Apple from $110 to $115 as our channel checks suggest that iPod shipments (usually down in the June quarter) will grow quarter-over-quarter," analyst Shebly Seyrafi wrote in a research report. "Our checks are on the HDD-side, which is a data point for the video iPod (about a third or a fourth of iPod shipments) and suggest better than seasonal growth in the 1.8-inch drive market (dominated by the iPod)."
"It is true that smart phones account for less than 10 percent of the 1 billion+ unit worldwide cell phone market, but we believe that Apple can catalyze smartphone penetration into the cell phone market while it gains share in the smartphone market," he explained. "Pessimists (such as Microsoft's Steve Ballmer) say that Apple's high price ($499/$599) will preclude widespread adoption, but we believe that after Apple 'skims' higher-priced customers it will drastically lower prices to around $300."
According to Seyrafi they expect Apple to sell around 17 million for fiscal 2008 (12-month period ending Sept. '08) and 25 million in fiscal 2009 (ending Sept. '09) -- well ahead of Apple's own stated estimate of 10 million units in fiscal 2008. Seyrafi even went as far as to predict that there is room for "ample upside" to his already aggressive iPhone targets.
"Risks to our price objective include slower than anticipated acceptance of the forthcoming iPhone product, increased competition from Dell in PCs, and cannibalization of the iPod by the iPhone," he wrote.
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