Apple's next stop: $825?

Don't look now, but Apple (Nasdaq: AAPL) is starting to regain momentum.

A new optimist
We've seen analysts chime in with price targets as high as US$1,111 in recent months, though most of the marks are in the triple digits. Stifel Nicolaus analyst Aaron Rakers initiated coverage on the world's most valuable tech company last month with a "buy" rating. His target is US$825, and he's not even one of the more bullish Wall Street watchers.

The US$155.07 billion in revenue and US$43.48 a share profit that he's modeling for this fiscal year is just short of the market average calling for US$44.13 a share in earnings on US$155.9 billion in revenue in fiscal 2012. His fiscal 2013 targets, though — eyeing net income of US$53.01 a share on US$195.8 billion in revenue — is just ahead of where his peers are perched.

What's making him so ho-hum about this fiscal year's final quarter yet so upbeat about the year that lies ahead?

Rakers delved into Apple's SEC filing for its fiscal third quarter, exploring the iEverything company's off-balance sheet moves. Between the third-party manufacturing and component purchase committments — not to mention the company's substantial inventory prepayments outstanding — he reasons that Apple is loading up on product like never before.

Whether this means Apple has big plans for the iPhone 5 or that the ballyhooed Apple smart television is about to become a reality in the next quarter or two, it's clear the tech bellwether is ramping up production to satisfy what it sees as booming consumer demand in the near future.

Supply is just half of the supply-and-demand equation
Even Apple can't assume that whatever it touches will turn to gold. Mac sales have slowed to a crawl, and the company's iPod business is in decline.

It also can't rule out the competition. Google's (Nasdaq: GOOG) Android continues to gain market share as the smartphone platform leader, and that won't change even if Samsung comes up short in its patent fisticuffs with Apple.

Google is also making another run at the smart-television market with a fortified Google TV push. Yes, the world's largest search engine fell embarrassingly flat on its face the first time out, but Google's credibility in consumer tech has been restored with the runaway success of Android.

Apple's iPhone 5 will also face a hungrier Microsoft (Nasdaq: MSFT). Sure, the software behemoth has been shooting blanks over the years. Still, it would be a mistake to underestimate a company that routinely spends billions to push into arenas that matter. With updated operating systems on the way later this year, Microsoft shouldn't be ignored.

Research In Motion (Nasdaq: RIMM) probably can be dismissed. Despite toiling away on BlackBerry 10 — a necessary and critically praised update — consumers won't be seeing BB10 in the wild until next year at the earliest. With both Android and iOS having activated hundreds of millions of devices apiece in only a couple of years, every setback makes RIM less and less relevant.

There are other players, but no real serious contenders. Apple's path to pushing all of its ordered gadgetry out to consumers really only needs to overcome the fast-moving Google and Mr. Softy's grumbling stomach.

That's not as easy as it sounds, but it's the first step toward breaking through the US$700 ceiling, the US$800 ceiling, and then ultimately Rakers' US$825 mark before moving on to new structures.

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