Apple’s (NASDAQ:AAPL) iAd mobile advertising platform helps developers of apps for iPhones, iPods and iPads to monetize their apps through advertising. Apple competes with Google (NASDAQ:GOOG), Yahoo (NASDAQ:YHOO) and Microsoft (NASDAQ:MSFT) in the mobile advertising space. We currently have a Trefis price estimate of $337 for Apple’s stock, about 29% above the current market price of $261.
Trefis members have created forecasts for two key drivers of Apple’s stock over the last week: (1) Revenue per Ad Impression and (2) Number of iPhone, iPod Touch & iPad Devices in Use. The members forecast suggest that Revenue per Ad Impression will trend higher than the Trefis forecast, while Number of iPhone, iPod Touch & iPad Devices in Use will mostly be in-line. These projections indicate a very small upside to Apple’s stock.
We estimate that Apps for iPhone, iPod and iPad constitute around 7% of the $337 Trefis price estimate for Apple’s stock. Hence the stock is not much impacted by (1) Revenue per Ad Impression and (2) Number of iPhone, iPod Touch & iPad Devices in Use. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
The average of forecasts for Revenue per Ad Impression created by Trefis members indicated a projected decrease from $10.20 per 1,000 in 2010 to $8.60 per 1,000 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from $10 per 1,000 in 2010 to $7.40 per 1,000 by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Apple’s stock.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Apple’s stock to Revenue per Ad Impression.
Our complete analysis for Revenue per Ad Impression is here.
2. Number of iPhone, iPod Touch & iPad Devices in Use
The average of forecasts for Number of iPhone, iPod Touch & iPad Devices in Use created by Trefis members indicated a projected increase from around 108 million in 2010 to 350 million by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 100 million in 2010 to 337 million by the end of the Trefis forecast period. The member estimates imply very little upside to the Trefis price estimate for Apple’s stock. In the past, Number of iPhone, iPod Touch & iPad Devices in Use has increased from around 8 million in 2007 to 75 million in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Apple’s stock to Number of iPhone, iPod Touch & iPad Devices in Use.
