Second Leg of GrowthBy Reuters | Posted 2010-10-15 Email Print
Apple is expected to announce strong earnings on sales of iPhone and iPad, even as the consumer spending environment remains weak.
Investors are looking at the iPad as the second leg in the growth story along with the iPhone, which has keyed Apple's surge over the past few years but is facing stiff competition from smartphones based on Google's Android software.
"It's going to be a combination this time of their two most important products, iPhone and iPad, and both are going to do very well," said Gleacher & Co analyst Brian Marshall, who expects Apple to pass Exxon Mobil as the largest company in the S&P 500 in short order.
Fidacaro said that despite Apple's size, there is still room to grow because its key markets -- smartphones and tablets -- are young and expanding.
"You've got two huge product cycles going on right now," he said. "And the iPad has no competition."
IPhone sales should continue to be strong following the June launch of the iPhone 4, with estimates in the 11 million to 12 million-unit range.
Fidacaro said Apple is building a CDMA iPhone for expected launch early next year, potentially with Verizon, which would add more than 10 million units to his 2011 sales estimate.
But the threat from Google looms, and new rivals are emerging. Android was the most popular platform among U.S. smartphone customers in the past six months, according to Nielsen.
"There's going to be no shortage of competition next year," said Pacific Crest Securities analyst Andy Hargreaves.