Apple fans cannot wait to get their hands on iPhone 5 in September. This is remarkable in view of the fact that it is not known with any certainty what the name of the new device will be and when it will be available. It is widely believed that the phone will be launched on September 12, 2012 and be available the last week of September.
Some claim that iPhone 5 will be the biggest product launch ever. According to the Web research firm Hitwise, search variations around iPhone 5 have been steadily increasing and peaked the week of August 18 when searches grew 128% from the previous week.
From an investment perspective, the iPhone 5 related frenzy has turned into a mania in Apple stock. The mania in part is the result of some analysts projecting that more than 250 million iPhone 5 units will be sold. iPhones are the most profitable products for Apple. It is easy to take the 250 million iPhones and come up with projections of spectacular profits.
I’ve done some work to square those numbers, region by region, by demographics and disposable incomes. Taking the top-down approach, as opposed to the bottom-up approach that some analysts are taking, my conclusion is that 250 million phones is a ceiling.
Will iPhone 5 break the ceiling? Anything is possible, but counting on breaking the ceiling for aggressive targets does not fit our approach to generate high risk adjusted returns.
The less informed will scoff at the 250 million ceiling for iPhone 5 sales. The argument goes that there are over one billion Chinese, they are rich, they love Apple, and they can afford $199 for the phone…Read more at Forbes
