10 Reasons Why Apple Will Hit $1000: Piper Jaffray

With the advent of technology, mobile gadgets are growing in increasing number and technological modification. In line with this, Piper Jaffray analyst Gene Munster predicts that Apple stocks will hit $1,000 within two years and backs his claim with 10 reasons: Check them out.

1. Innovative and inventive product roadmap

Over the next 12 months, Apple is expected to release new products and product modifications in their iPhone, Macs, iPad and television. Apple's new Mac will be arriving in six weeks at most with an enhanced Retina displays as well as Intel's Ivy Bridge Chips. Such changes in core products will demonstrate the company's ability to undergo constant innovation and invention in their products.

2. The next generation iPhone: iPhone 5

Being one of the core products of Apple, the launch of the new iPhone 5, which is predicted to happen in October, will be the biggest consumer electronics product launch of 2012 as well as the biggest device upgrade cycle in smartphone history, according to Munster. The newest iPhone will have a completely redesigned body style with a probability of a 4-inch screen at 60 percent.

3. A possible Apple TV in 2013

Gene Munster also expects that Apple will launch a connected television for screen sizes from 42" to 55" in December 2012. Estimated to cost between $1,500 and $2,000, the prospective television might include interface control via an iPhone and iPad applications as well as a voice-control mechanism through SIRI.

If the launch pushes through, analyst Michael Olsen estimates Apple would sell as much as 110 million television units. Munster analyzes that every one million units of Apple TVs being purchased would result in an assured 1 percent rise in revenue for the company in 2013.

4. Carrier subsidies to continue

With market shares of AT&T and Verizon being heavily dependent on Apple, investment banks have expressed confidence that iPhone subsidies would remain relatively unchanged for the next two to three years. As pointed by in-house research, consumers' interest in the iPhone should enable carriers to achieve lower customer acquisition costs. Moreover, even if the leading carrier were to drop its subsidies on iPhone, Munster strongly believes that second-or third-place carriers would remain willing to subsidize the product.

5. 40% gross margins

With its profit margins projections at a rising trend, Apple will be able to maintain gross margins above 40 percent over the next three years, according to Munster. He believes the iPhone has a 60 percent gross margin, significantly higher than the estimated 40 percent margin of the iPad and the presumed 25 percent margin for Macs.

6. Apple's "Heart transplant" strategy

Munster called Apple's strategy of phasing out old products as quickly as possible as a "heart transplant" strategy. This move is seen by analysts as one of the key factors that could enable the company to secure the best component prices possible which translate to higher margins.

7. China's promise

Although iPhone 4S sales in the United States showed a 34% decline in the second quarter of this year, analysts believed that China shows promise in the iPhone and iPad sales. According to Munster's estimates, Apple sold 8-9 million iPhones in China during the March quarter, compared to 9.5 million Stateside activations and 1 million in the channel.

The unprecedented middle class growth and the current penetration of smartphones in the Asian country shows China is undergoing a "healthy smartphone growth".

8. Tablets to outgrow PCs in 2020

As Apple is dominating the tablet market, the company is expected to sell 66 million iPads this year owing to 67% of the total sales in the tablet market. Munster, agreeing to what Apple CEO Tim Cook earlier said, expects the tablet market to eventually outgrow the PC market by 2020.

9. Enterprise sales

Munster believes that Apple's "long road" enterprise strategy will be another key point for its growth. He believes the company considers the consumer and enterprise markets as "significantly different verticals" and counts on consumer adoption to lead to enterprise adoption.

The analyst expects the high "consumer desire" for the iPhone and the iPad to transfer over to the corporate level but this might not hold true to the Mac as most companies prefer to use older versions of Windows "for reliability purposes."

10. iTunes and Apps

With over 225 million registered iTunes accounts and more than 125 million iCloud accounts, Apple boasts of one of the largest registered user-base in the tech world. Munster see these services will be of benefit to the company as this could enhance the Apple ecosystem without needing to produce substantial profits on their own.

Nobody knows if all these factors would be realized in the near future, but one thing's for sure - Apple will continue to create and innovate products that would dominate the world of smartphones and tablets.

© 2025 iTech Post All rights reserved. Do not reproduce without permission.

More from iTechPost

Real Time Analytics