Here’s why Wu says he thinks the iPad will continue to be a hot-seller in 2012:

We believe this significant refresh will likely help drive higher iPad sales and help further differentiate from arguably the only real competitor in the market, Amazon’s Kindle Fire, and not to mention the myriad of Android offerings out there. We are currently modeling 48 million iPad shipments for calendar 2012.

DisplaySearch has already said it estimates 48 million iPad display panels were shipped in 2011. Now, display shipments doesn’t necessarily equal iPad shipments (owing to repairs, replacements, defective stock, etc.) but Apple’s own reported numbers put its iPad sales for its financial year in 2011 at around 32.4 million. An increase of 16 million would certainly be in line with the iPad’s sales growth between 2010, when it sold 14.8 million worldwide, and 2011, but if Apple’s quarterly sales continue to gain steam the way they did in 2011, we could indeed see much bigger increases, especially if the iPad 2 remains available as a low-cost option.

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The new iPad-ordering process takes users through a step-by-step selection process, starting with the choice of color for their device and followed by the selection of storage and connectivity options. Finally, if you’ve chosen a 3G-capable model, you’ll be presented with a choice of carriers, between either AT&T or Verizon in the U.S. It’s a much more logically laid out approach to iPad shopping, when compared to the long list of every available model that it replaces, and it should lead to less consumer confusion. Plus, it just looks a lot better.

Also new is the use of “In stock” in place of “Within 24 hours” for products that Apple has on hand and ready to ship. This is a much more direct statement of the product’s availability, and it should also discourage calls from frantic customers if an order delivery happens to fall outside that 24-hour shipping window for whatever reason. Other items that are not in stock continue to use the shipping window time frame to display stock availability (e.g., “Ships: 2–4 business days”).

Nothing revolutionary, but this is another sign that Apple is keen on improving its customer-facing experiences wherever possible, even when it comes to the smallest details.

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Exxon, an oil company, has seen its market cap steadily drop from a high of around $500 billion in 2009, while Apple’s has grown exponentially in that same time frame, thanks to successes like the iPhone and the iPad, along with a computer arm that has seen steady increases in sales. Market cap tends to reflect performance, and there’s little denying that Apple has been putting on quite a show in recent years, including a very successful last quarter.

Apple managed to handle the U.S.’s recent credit rating downgrade by the S&P with a bit more resilience than most, which probably helped it achieve this milestone today. But despite a bit of a resurgence yesterday for Apple, performance wasn’t so hot today for either company. Apple closed down 2.76 percent compared to yesterday, while Exxon fell further with a 4.41 percent drop.

Now that Apple’s on top, it just has to stay there. Continuing to do what it has been doing should be a pretty good way to accomplish that, but the company also appears to be hedging its bets with expert legal maneuvering. Considering that most analysts still have very ambitious target prices, it should stand a good chance of staying ahead for the near future.

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The stock price of the iPhone and iPad maker hit $400 a few times Monday, but closed at $398.50. Today shares opened at $400 and peaked earlier this morning at $404.48.

There’s no mystery where the boost is coming from. Apple’s stock value has been swinging steadily upward since the introduction of the original iPad in late January 2010. Since then, Apple shares have grown 96 percent. Most recently, Apple reported blow-out third-quarter 2011 earnings last week, on the back of sales of more than 20 million iPhones and 9 million iPads in just three months.

Apple’s market capitalization is the number that Wall Street has been eyeing perhaps even more closely. As of Tuesday, Apple is worth $374.18 billion, making it the second-most valuable company in the world after ExxonMobil. While Apple is close, Exxon still has a pretty sizable lead, closing today with a valuation of $415.52.

But there’s at least one good reason to believe Apple’s value for shareholders isn’t going to lose steam anytime soon: Still expected sometime later this year is the next iteration of the iPhone.

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Asymco's chart of Apple's cash hoard following the company's Q3 2011 earnings

Here’s what some of the most vocal are saying about what Apple should do with its mound of cash.

• Bernstein Research analyst Toni Sacconaghi in the Wall Street Journal called it ”a level of cash that’s preposterous by any metric.” He says Apple should either buy back shares of its stock or issue a dividend.
• Over at Fortune, Philip Elmer-DeWitt argues against such a movie and warns “don’t be fooled” by those Wall Street analysts howling about Apple paying a dividend. “What these men want done is for Apple to give the money to ‘the stockholders,’” he writes. “What they don’t say is that they are the stockholders. Institutions own more than 70% of Apple’s shares and would be the primary beneficiaries of any buyback or dividend.”
• Daily Finance suggested Apple could buy a company with its hoard of cash. DF didn’t suggest any company in particular should be targeted. But it did point out that “[w]ith a market cap in excess of $360 billion, it could easily use its stock as currency” to make an even larger acquisition.
• Other eyebrow-raising suggestions thrown out there include Apple getting into the TV or gaming business, or snapping up Facebook, Hulu, or Netflix.

If the past is a predictor of the future, Apple is likely to do nothing drastic. This is not the first time the company has come under fire for its conservative spending ways. At a shareholder meeting last year, Jobs was peppered with questions regarding his plans for the money (he joked he was going to “throw a toga party” with it) but he answered very directly about how Apple think about its cash on hand: namely that it provides “security and flexibility.”

“When you take risks, it’s like jumping up in the air, and it’s nice to know the ground will be there when you land,” he said at the time. “We run our company conservatively from a financial point of view because you never know what opportunity is around the corner … We’re very fortunate that if we needed to acquire something we could write a check for it and not have to borrow money.”

With the ongoing war in the mobile industry over intellectual property taking place right now, that attitude is proving awfully prescient. Earlier this month Apple was able to put down $2.6 billion as part of a consortium that bought Nortel’s mobile patent portfolio, an amount that’s relatively tiny compared with the rest of the cash Apple’s got stashed away.

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Analysts point to several causes. JMP Securities’ Alex Gauna downgraded Apple on Wednesday because of concerns over slowing growth at Apple’s main supplier, Hon Hai Precision Industry (also known as Foxconn), as Android’s huge success starts chipping away at iPhone sales.

Gauna is among the few naysayers who doubt Apple can continue to outperform the market. But Asian firm CSLA counters that the JMP analysis ignores the fact that Apple doesn’t represent a significant portion of Hon Hai’s sales (Apple accounted for about 24 percent of Hon Hai’s total 2010 revenue, according to CSLA). If so, that’s definitely not enough to infer a direct one-to-one relationship between the fortunes of the two companies.

CSLA offers a second, more convincing reason behind Apple’s recent slump. CSLA firm analysts Chitra Gopal and Steve Fox argue (and, to be fair, Gauna also mentions this) that Apple’s heavy reliance on Japanese components is causing investor jitters in light of last week’s earthquake and tsunami. Here’s an excerpt from their full note on the subject (via SAI):

A4 /A5 CPUs are made by Ibiden, and ACF films for displays are 100% sourced from Japan (Sony Chemical and Hitachi). This will affect practically all manufacturing, not just Apple plays. Apple related stocks are getting hit today — I guess one reason could be Apple historically has operated a lean supply chain (carries much lower inventory vs. other consumer electronics/PC makers) — so concerns are the Apple’s shipments could be worse hit.

The Japanese market represents about a 6 percent share of Apple’s overall sales. Obviously, Apple’s sales in the country will be affected following the disaster, and the iPad 2′s launch in that country has been delayed indefinitely. But here’s the rub: The disaster’s fallout is hardly limited to Apple, and it’s hard to see how Apple could possibly be more affected than the majority of its competitors in the consumer electronics and computing market.

So what else could be behind the stock slide? Michael Shulman of InvestorPlace offers four other reasons. Maybe his most salient point is that many simply believe that Apple’s growth will inevitably slow, so why not now? Shulman, for one, isn’t buying it. He points out that Apple owns a fraction of the worldwide cell phone and personal computer market share, giving it plenty of room to expand its business, something it could easily accomplish if it continues its trend of bringing lower-priced offerings to market.

Apple’s stock is up about 2 or 3 percent today as of Thursday morning. Overall, tech stocks are trading low (down half a percent today) as a result of concerns of market instability following the earthquake in Japan. If anything, the clear evidence of Apple’s success with iPad 2, combined with what I think is an undervaluation based on JMP’s downgrading make this a perfect time to buy Apple stock if you’ve been looking for the opportunity.

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During the course of the past year, Apple’s stock price has experienced 40 percent growth, based mostly on the strength of the iPad’s success in bolstering its already strong sales of iOS devices. Compared to the overall NASDAQ average growth of only 1.2 percent, Apple’s success is meteoric.

Andy Perkins, a Societe Generale analyst based in London, told CNNMoney.com that part of the reason behind Apple’s ballooning stock price is its ability to beat expectations consistently. “The anticipation was as they shipped more the price would lower,” said Perkins, talking about the iPad .”But the margins have kept much higher than people had anticipated.”

Apple does not pay dividends on its stock, despite some analysts urging them to do so, arguing that a payout could encourage growth. Cupertino stopped dividend payouts in 1995, when it decided to focus all of its revenue back into growth at a time when it was locked in heated competition with Microsoft.

Some argue it no longer needs to do that, and could spend some of its roughly $50 billion cash on-hand in dividends for investors, or in repurchasing shares. Others aren’t so sure, arguing instead that Apple should continue to hold on to its cash so it has plenty of room to innovate. A smaller cash pile would mean it could absorb less risk, meaning more ambitious projects might fall by the wayside.

So can Apple continue this level of success? Analysts, predicting strong fourth-quarter results, say yes. Bank of America (BofA), Merrill Lynch and Oppenheimer have all raised their price targets for Apple recently. BofA is now setting $400 as its target price, up from $360, while Oppenheimer’s has gone up to $345 from $330. One of the primary reasons for the new targets was that Apple itself has projected fourth-quarter revenue exceeding analyst expectations, despite being a company that normally embraces much more cautious estimates.

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AppleInsider regularly checks stock levels of Macs with Apple’s officially authorized resellers in order to maintain its Mac Price Guide. In its most recent check, it found that Amazon.com, MacConnection, MacMall and J&R had all run out of the 1.83GHz MacBook Air, and at least two were also completely without the 2.13 GHz stock configuration, too.

Apple will generally allow stock of products approaching an update dwindle, so that retailers aren’t left with obsolete product in their inventory. Stock of the MacBook Air has been slowly dwindling for weeks, and this is the first time in over two years that the Air has shown depleted stock levels, so it’s unlikely that it’s just poor supply chain management on Apple’s part. Unprecedented demand also isn’t likely, since the price remains the same and the Air hasn’t seen an update since 2009.

In addition to low stock levels, there are also reports that Apple has told retailers that it won’t be replenishing stock levels of the MacBook Air until Oct. 12 or 16. It’s the kind of delay that almost always precedes a product update, according to people working on the buying side of major retail chains.

The MacBook Air is long due for an update, and rumors about what that might include say that a new, smaller form factor based around an 11.6-inch display is in the pipeline. That news came via DigiTimes, citing parts suppliers in Asia. As someone who still uses his 12-inch PowerBook G4 frequently and with great satisfaction, I’m very much looking forward to what a smaller screen might do for the ultra-portable.

Will a MacBook Air redesign start a fire in the hearts and wallets of consumers the way the new Apple TV has? Sound off in the comments.

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It’s the latest chapter of a story that started with the introduction of the iPod, but really started heating up when the iPhone was announced in January 2007. Since then, Apple’s stock has more than tripled in value, and the company overtook Microsoft in May as the most valuable tech stock. Based on the success of its latest star, the iPad, which is already selling better than the iPod, that trajectory isn’t going to change, either.

Gene Munster at Piper Jaffray expects iPad sales to climb even higher next year, too. He issued a prediction of 21 million iPads sold next year, thanks to the company’s efforts to enter more international markets and increase distribution channels for the device. Based on the strength of that prediction, among other factors, Apple’s stock is expected to store higher still, with Munster even suggesting it could hit $390 a share at its highest.

Apple isn’t without challenges, however. Android’s rising popularity is a threat. Google’s smartphone OS recently accounted for as much as 17 percent of the U.S. market, up from 12 percent. Apple had slipped from 25 to 24 percent in the same time period. Much will depend on how the iPad fares as more competition enters the market, and on whether or not Apple can shake up its Mac division with some exciting new offerings to offset any ground lost to Android in the smartphone game.

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Investors should be seriously looking at putting more money into Apple stock, says one industry analyst. Robert Cihra of Caris & Company is predicting that Mac market share will grow by 26 percent in 2010, compared to only a 16 percent expansion in the general computing industry.

Cihra predicts in a new research report (PDF download, requires registration) that Apple will have a 4 percent overall market share in the year 2010, which is actually around what it has now, according to numbers released in September. Apple’s pricing and profit model, however, give it a 10 percent share of worldwide revenue. Despite not seeing growth in terms of overall market share, Cihra still thinks Apple is the best stock available in the personal computing market.

The report, as described by AppleInsider, sees Mac unit sales growing because of things like pricing and product line control:

Cihra goes into great detail on his analysis in a note issued to investors Thursday morning. Due to Apple controlling its own product cycles, as well as pricing, he believes Mac units will grow at a rate of 1.6 times faster than the entire PC market. On average, the Mac has outpaced the PC market as a whole by 1.8 times over the last 12 quarters.

In the report, Cihra also explains why Apple remains the best stock choice for investors interested in the computing sector:

As the most (in fact only) innovative, highest-value (hardware+software) and profitable PC vendor, we estimate Apple having earned a Mac [average selling price] of $1,289 in CY09, down 10% [year over year] but still representing a premium of 1.8x vs. its Wintel peers. Even more meaningful, we estimate Apple Macs generating a gross profit-per-unit of nearly $340, which is 2-3x our estimate for its peers, keeping us focused on AAPL as the single best PC market investment.

Apple’s success is due to a number of factors, but one in particular is the way in which it predicted the dominance of the notebook well before it had achieved that position with consumers. The price of Apple’s notebooks fell below those of its desktop offerings in around 2005, a full two years before the same thing happened at HP, one of the largest PC manufacturers. Many consumers these days, if they have only one computer, choose a notebook because while performance has caught up to desktop machines, portability and battery life in laptop computers have made significant gains.

While Cihra doesn’t seem to mention it, if Apple does indeed release a tablet in 2010, and if it can price it reasonably, as recent evidence seems to suggest it will, there’s no telling what kind of gains we could see. If done well, Apple would essentially be creating a new market, which could provoke an uptick in its fortunes the likes of which we haven’t seen since the introduction of the iPod.

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Currently, the Bookspan household runs on many Apple products including a Penryn iMac 24″ 3.06Ghz (mine), an original MacBook Core Duo (wife’s) an AppleTV (shared) and two iPhones — original (wife’s) and 3G (mine). We also have a Time Capsule for WiFi and Time Machine backups.

I have been writing on and off for a few years and enjoy authoring commentaries or reviews. I look forward to a fun engagement here on The Apple Blog. Please don’t hesitate to write comments and/or send feedback my way!

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The picture above shows AAPL stock since just before the Stevenote Monday. It has only dropped 13 dollars since then, but rumors of Steve’s poor health, and the impossibility of living up to the hype has caused it to drop all the same.

Historically, Apple takes a bit of a dive after each Keynote by Jobs, but they still rise all the same higher than they were before. Although everyone seems to be making a big fuss about Jobs’ health, the fact of the matter is that Apple continually performs.

That does raise the concern about Steve Jobs: at some point, he is going to leave Apple, and what is that going to do to the company? Has Apple created a culture that is sufficient for Jobs’ will to be carried out long after he retires, or will Apple go the way it did the last time Jobs left?

That is a worrisome question. I sure would hate to have Apple lose all the ground it has gained. What do you think?

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And in case you think I’m reacting to isolated incidents, let me assure you I’m not.

For example:

Fox News: October 4
“…the Commonwealth Bank, has used the latest version of Apple’s (APPL) music player…”

CNN/Dow Jones: October 4
“…Paid downloads of Fox series also are available on Apple Inc.’s (APPL) iTunes…

CNBC: October 2
“I’ve made some serious fast money on some trades but haven’t pulled the trigger on some others. For example: Research In Motion (RIMM), NVIDIA (NVDA), EMC Corp (EMC), Blue Nile (NILE), & Apple (APPL)…”

Barrons: October 1
“That’s less lofty an earnings multiple than a pop star like Apple (APPL) boasts…”

Investors Business Daily: September 28
“Apple (APPL) issued a software update for its iPhones…”

It’s practically an epidemic. Google reports the error as having occurred hundreds of times, even if you include the word NASDAQ. For a company worth nearly $150 billion at the end of market close today, it’s surprising to me that this kind of mistake continues to be made on a daily basis in otherwise outstanding business publications. Can you imagine if they started stating Microsoft’s ticker symbol as MFST or Google as GOG? Give Apple the respect it deserves, and get it right. It’s AAPL.

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