To OTC Journal Members:
 

The Apple (NASDAQ: AAPL) Shines

After yesterday's irrational melt down it looked like it might be tough sledding for a bit on AAPL, but today is another day. There were some early reports that computers have been selling a bit better than expected pre school. I thought that was interesting, but here's another far more interesting fact: As I write today's edition, one hour before the close, HP is up 3.26%, DELL is up 2.38%, and AAPL is up 5%. Now, why would that be?

True, there are also rumors that the next generation of iPods will be released soon, but I believe there are greater underlying forces at work here. I'm going back to the same point I brought up in previous writings about AAPL- The iPhone is creating a "halo" effect for Apple. The iPhone is moderately disruptive technology, and it will drive MAC sales this Fall. MAC sales will come in better than the market expects at the cost of DELL and HP, and AAPL will make new highs.

Here's some data put together by Toby Smith's Changewave Alliance. Go to www.changewave.com if you want to read the whole article. This guy has come up with some really good ideas in the past, and he's really onto something with MAC sales. 

Here's are the results of a survey, taken by Smith's Changewave Alliance, that brings out an alarming trend for Michael Dell. Here's what the table tells us. Earlier this year and in past years, consumers buying new computers chose Apple between 15% and 20% of the time.

Now, check out the trend for consumers who plan to buy a new computer in the next 90 days. There is a 3% to 4% jump for AAPL in desktops, and a 9% jump in laptops. This means Apple is stealing market share from the other big box makers. The trend is great for MAC sales, and that's what Wall Street looks for.

Now, let's look at another table I find very interesting. Look at the customer satisfaction numbers for consumers who have purchased a computer in the last 90 days. Apple comes in at a whopping 86% customer satisfaction number (very satisfied), with Toshiba coming in a distant second at 59%, and DELL dead last at 44%. 86% is an unheard of number in consumer satisfaction. 

This survey also bodes very well for the future of Apple computer sales.

Here's how AAPL is setting up for its drive to $200. You will note my first recommended entry point was about $93 at the end of March. I was looking for the post iPhone introduction sell off to be the second entry level. It didn't sell off in June as I expected.

However, the August subprime/Yen Carry trade melt down did provide another entry level at about $124.

So, where to from here? Right now, the stock is up $7.25 (about 5%) today. That's too big of a move to take a position. Here's how you do it with AAPL. Wait for a day when the market is tanking and the talking heads on CNBC have their panties in a bunch over some failed hedge fund or news of a money market holding back on redemptions because there's no bid for their corporate paper. The market will tank, and that will be the time to accumulate this one.

I'm sticking with my original thesis- the iPhone's halo effect will drive MAC sales in the Fall, and they will be better than any analyst is expecting. In 2008 the stock price will be driven by iTV as it catches and transforms the way we watch movies much in the same manner Apple changed the way we listen to music.

$200 sometime in 2008, with a great Fall ahead and a new all time high somewhere between now and mid October. Jump in on the dips.
 

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