OK, Apple’s (AAPL) iPhone is big. It’s big like a summer blockbuster, or like Lindsay Lohan’s party habits, or like Paris Hilton getting out of jail early. Everyone knows about it. The iPhone is big to the point where my father-in-law, who has never carried a cell phone, knows that it’s coming out June 29 and is thinking about getting one – for the bragging rights as much as anything.
In case you haven’t noticed, Apple stock is also big, thanks to the iPhone. Apple is trading at around $125 per share, with a P/E ratio near 40. (Lest you think 40 is extremely high, consider that Adobe Systems’ (ADBE) P/E is near 48, and Research in Motion’s (RIMM) is near 50.)
But how can investors capitalize on the iPhone hype, besides the obvious bet on Apple stock? Here are three ideas:
INTEL. Intel (INTC) is a risky, but interesting choice. Apple’s OS X operating system runs on Intel chips, so it seems likely that there’s Intel somewhere inside the OS X-based iPhone. Of course, Intel is too big for a successful iPhone to have a significant bottom-line impact, but considering the fact that the stock has been stuck in the mud for years, association with a hot product might capture Wall Street’s imagination. (Looks like there’s no Intel inside yet.)
RESEARCH IN MOTION. Granted, RIM is already a hot stock, and it’s trading near all-time highs. But there’s a chance that the Canadian company could benefit from the inevitable shortage of iPhones. Phone shoppers who want a sexy iPhone look-alike that has a keyboard might take to the BlackBerry Curve, which also happens to be available through AT&T (T).
AT&T. Speaking of AT&T, this telco has several amazing opportunities on its hands thanks to the iPhone. Crowds of affluent folks will probably drop by its stores to get a peek at Apple’s gadget, giving AT&T a chance to hook them into the marketing machine. Also, because the iPhone works only on AT&T’s network, loyal iPhone users will automatically become low-churn AT&T customers – and high ARPU (average revenue per user) customers at that. Low churn and high ARPU are the sorts of stats that could move a telco’s stock.
