Novice Investing - iPod - Connecting Song with Voice

Date: Friday 29th 2008f August 2008 09:41:06 PM

iPod - Connecting Song with Voice - 04/11/2006

By: Novice Investing Staff

There is no doubt that iPod is Apple Computer's (AAPL) biggest moneymaker this decade. In less than five years, Apple has managed to sell 42 millions of iPods, or 230,000 iPods a day, around the world. That is no small feat. In 2005, Apple earned $ 1.34 Billion, mainly from iPod. While some suggests a halo effect to Apple's PC product line, it has yet to budge from its 3% market share for the PC market.

Now, some speculated that the best is yet to come. As audio and video converges, Apple is in the best position to capture it all. It is hip, it is stylish and consumers are enamored by Apple's product line. Cellular phone makers sold 795 million handsets last year. If Apple take advantage of its iPod popularity and start selling new hip phones, Apple stock price will have more room to grow. It will also compete with the like of Research in Motion (RIMM) and Palm (PALM) in the high-end PDA market.

Will consumers pay premium price for Apple's product? You bet. Today, Nokia announced a better than expected average selling price for its handsets. For the quarter, average selling price rose to $ 125. Apple has been selling a lot of iPod's product for more than $ 125, mind you. And this is the product that is the equivalent of a flash disk and a walk-man. Adding phone and email capabilities will give Apple much much more appeals.

So, the 795 million handsets are up for grab if Apple wants to. Of course, handset makers will not just watch Apple take their pie away. But at this point, Apple is in a good position to leverage its iPod product line with a voice capability. Can Apple compete against the like of Nokia, Motorola and Samsung? You bet. it has $ 8.6 Billion in the bank with no long term debt. Apple is roughly in the same league with Nokia, which has around that much cash.

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Disclaimer: The sole purpose of this article is educational. This article is merely the opinion of the writer and is not in any way a buy/sell recommendation regarding Apple Computer Inc. (AAPL) or any other securities.

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