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One industry observer has run the iPhone numbers and thinks they point to a doubling of Apple’s market cap by 2008.

If the iPhone manages to find its way into the hands of 10 million purchasers, or 5 million who like to have two of everything, it would be part of a master plan that could double Apple’s capitalization to around $240 billion.

Kenneth Hartog cited a bunch of factors that have to take place to accomplish this. For one, iPhones will have to push people to iTunes:

I assume that 20% of the people who buy iPhones did not previously have iPods, which means iTunes will have an extra 2 million customers. At an average spend of $50 per year per customer and 50% margins, that is $1 billion in extra revenue and $500 million in profits. Put that in to Apple’s earnings and multiply by AAPL’s PE of 40, and you have additional market cap of $20 Billion.

Hartog also thinks the iPhone will help the Mac side of Apple’s business. Along with pulling in whatever cut of AT&T’s subscriber fees Steve Jobs managed to get, the potential exists to add $120 billion to Apple’s existing market cap.

Via Seeking Alpha

Posted in Hardware, Opinion |