Apple On Track To Overtake Microsoft With $20 Billion Quarter

Heather Leonard via The Apple Investor

The market is up in anticipation of Fed action. Shares of AAPL are on the rise, currently up over $2 in early trading. Upcoming catalysts include third quarter earnings announcement on Monday, October 18th at 5:00pm ET; monthly NPD data (Mac / iPod business); iPhone sales updates and carrier diversification; iPad sales updates and expansion; new content revenue streams such as video, books and social (Ping); and the uptake of the newly refreshed Apple TV. AAPL trades at 16x Enterprise Value / Trailing Twelve Months Free Cash Flow (incl. long-term marketable securities).

Pointing to the $20B outfield.

Apple To Retain 50% Of The Tablet Market (All Things Digital)
J.P. Morgan analyst Mark Moskowitz believes that while a number of new tablets will hit the market over the next year, it’s unlikely that they’ll whittle the iPad’s down to 20% or even 30%. They may get it down to 50%, though, says Moskowitz. Which is good news for Apple, which stands to sell a boatload of iPads next year. For fiscal 2011, Moskowitz estimates iPad unit sales could hit 22.2 million (or 50% of approximately 45 to 50 million units).

Expect The Mac To Have Sold ~4 Million Units This Quarter (Fortune)
How’s the Mac doing? Unit sales, which stalled in the first quarter as customers waited for the new MacBooks that arrived in April and May, took off in the second quarter, coming in just shy of 3.5 million. Although Apple’s competitors saw PC sales weaken this summer, all signs suggest that the Mac was the exception, driven by back-to-school sales and the new desktop models released in late July. The average third quarter unit sales estimate of the 31 analysts we’ve polled is 3.86 million Macs. Five of them, however, expect Apple to report that it sold 4 million or more. We will watch for any potential iPad cannibalization.

Looking At A $20 Billion Quarter (Fortune)
If Apple beats guidance by 19% like it has the past 3 quarters, we could be looking at a $21.5 billion quarter. The blogger / analyst community seems to be leaning that way with Wall Street not far behind. Current Street consensus is at $18.3 billion, or a measly 1.6% beat. Earlier in the quarter Antennaegate weighed on the stock, but millions of iPhones and iPads later, this could be the quarter when Apple surpasses Microsoft in total revenues.

The 7-Inch iPad Always Existed (The Loop)
A 7-inch iPad has actually existed for some time at Apple, says The Loop’s Jim Dalrymple. The writer, known to have inside contacts at the company, says that a 7-inch model was developed at the same time as the 9.7-inch one currently on sale. It’s uncertain why Apple ultimately picked the larger display option (avoiding comparison with the iPod, catering to newspapers, competing with notebooks). If reports are accurate, a 7-inch iPad should launch in early 2011.

iPad To Hit Glass Cases At Walmart (Wired)
The iPad continues its march towards world domination with an impending invasion of Walmart, America’s favorite supplier-bullying, content-censoring retail giant. Leaked emails and photos from eagle-eyed customers reveal that Apple’s overachieving tablet is just about to colonize shelf space nationwide. Charlie Sorrel at Wired believes the iPad will be this year’s Tickle-Me-Elmo. The iPad could be in 1,000 Walmart stores before the end of October.

iPhone CDMA Would Bring Concurrent Voice And Data Submissions To Verizon (Apple Insider)
Forthcoming enhancements to the CDMA wireless standard could allow Apple to be among the first handset makers to deploy phones on Verizon (and eventually Sprint) that would be capable of simultaneous voice and data transmissions like those operating on AT&T’s GSM network. Those same multitasking capabilities aren’t currently available to Verizon customers due to a decision made several years ago by engineers developing the CDMA standard, in which they chose to split voice and data transmissions into separate signals that cannot run concurrently.