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Technology Stocks : Apple Inc.

AAPL 260.29

+0.1%

10:39 AM EST

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Ryan Bartholomew

To: Ryan Bartholomew who wrote (190174)	5/1/2016 9:23:16 PM
From: pyslent	1 Recommendation Read Replies (1) of 213182

If profits contract less than 5% annually for the next 5 years with zero growth indefinitely after that, $112 would be a fair price based on DCF. I get quite a different DCF fair value when I use those inputs ($9 eps, 5 yrs at -5% growth, 10 yrs at 0% growth is worth about $50 in npv before adding $20-30 in book value). gurufocus.com But it's a pointless exercise. We have no idea what products Apple will be selling in 15 years. In the shorter term, 5 years of 5% contraction in iPhone unit sales would be about 150m units in 2021, which would imply an average 5 year upgrade cycle for an iPhone userbase that will probably be nearing 800m by then. That seems unlikely for lots of reasons. Apple would need to start losing lots of users to Android for sales to drop to those level (Apple had 350m or so iPhone users when Apple was selling that many iPhones annually).

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