UBS believes Apple (NASDAQ:AAPL) is set to launch several new products in '07 - many not in their model - including phones, iTV, & even some sort of ultra-portable device. Firm continues to believe Mac sales are strong, driving margin expansion. They also remain confident in AAPL's ability to generate solid growth from iPods, music accessories & future innovations.
Firm believes that existing product lines can help drive revenue acceleration in calendar 2007 for Apple. They think phones, iTV & other innovations could add up to $0.50 in annualized earnings power long-term, according to their analysis (assuming at least 5mm phones sold annually).
Given Mac momentum, firm believes their 1Q07 estimate of $0.78 with revenue of $6.3B could prove conservative (includes Mac unit growth of 44% to 1.81mm). For FY07, their estimate of $2.75 with revenue of $23.2B (+20% y/y) does not include several potential products. For FY08 firm's estimate of $3.15 includes revenue of $26.7B (+15% y/y).
Firm reiterates Buy rating with $95 target ahead of Steve Jobs' Macworld keynote on January 8.
Notablecalls: Not actionable but good to know category.