Apple Inc (AAPL)

[pdq]

Re: deferred revs and profits

I missed the analysts deconstruction of the reported earnings (I thought earnings were to be reported today), but if I understand what Apple is saying, they've already got ~$3.8 B of revenue and $1.3 B of future profit assured- baked in, if you will- in the form of deferred revs and earnings just from this quarter's results.

That's on the basis of ~7 million iPhones sold this quarter. Sales were particularly hot, I'm sure, because of the intro of iPhone 2.0, but is it unreasonable to assume, say, annual sales of 14 million iPhones the coming year? Even if that was the plateau of annual iPhone sales, that would eventually add ~$7.6 B in sales and $2.6 B in profits on average, every year, on top of whatever other revenue and sales Apple got from non-iPhone sales.

That (eventually) makes a base of around $3/share in annual profit. Assuming a conservative P/E of ~20 for a company like Apple, that supports a base of $60 in share price. Current cash is $28/share which brings it up to $88 a share, before you even start adding in, y'know, Macs, iPods, music and other online sales, and any new "insanely great things" in the future.

I know I'm counting an awful lot of chickens here, but I have a hard time seeing current price for AAPL as anything less than a fire-sale bargain.