211 Million iOS Devices Means Another 50% Upside

Apple

just keeps giving you more reason to like the company. Today's reason? 211 million. In a note this morning, Piper Jaffray's Gene Munster said that he expects Apple to have $164 billion in revenues. That's nearly 64% higher than 2011 revenues. He also expects $40.50 per share in earnings for 2013, which justifies his $607 price target. Another nugget jumped out at me: 211 million iOS devices. Munster expects the Cupertino-based company to sell 143 million iPhones, and 68 million iPads in 2013. Those are incredible numbers, considering Apple just had its best ever quarter for iPhones and iPads, and sold 9.3 million iPads and more than 22 million iPhones during the quarter. If you extrapolate that growth into a full year, that's 37.2 million iPads and 88 million iPhones. That assumes no growth quarter-over-quarter, which there clearly is at Apple. These numbers suggest that Munster expects iPad sales to nearly double from current levels, and iPhone sales to rise 62.5% by 2013. "One key topic on which we are different than consensus thinking is our belief that the iPhone unit growth can continue in the 30% range while ASP's will be more than double the smartphone industry average," Munster wrote in a note captured by

"In other words, we do not believe Apple needs an ultra low end offering to grow iPhone units at 30%. If Apple was to announce an unsubsidized, sub-$200 iPhone, our unit estimates would be too low and ASPs would be too high." Munster expects Apple's revenue to grow 19% in 2012, and 17% in 2013, and the company will eventually have $140 per share in cash in 2013. As of the end of last quarter, it had $81 per share in cash. If Munster is correct, the iPhone would account for 49% of Apple's revenues in 2013, up from 30% in 2012. Generally, Munster comes in a little too optimistic then the highest on the Street, but the past couple of quarters, Apple has beaten even his estimates. The company is on the verge of launching iPhone 5 sometime in the next few weeks, and the iPad 3 in

A $607 price target does not even reflect the much rumored about Apple

which Munster, along with many others, have suggested is next for Apple. With Apple potentially moving into televisions, and the eventual

via China Mobile

, Apple is operating like no other company in the world. It has multiple products everyone wants, and are willing to pay for. For over a decade, Apple has been a company that can do no wrong. Even the Apple TV, which some see as a flop, never gets mentioned as a failure. It is thought as a cool product with tons of potential, but Apple is so focused on Macs, iPhones, and iPads that no one really cares. 211 million iOS devices in 2013 is mind blowing to think about, considering where we are today. At $164 billion in revenues, Apple is trading at 2 times 2013 estimated revenues. Obviously something is way off here. Either Apple comes back down to Earth, which could happen after

Or, the shares are seriously undervalued at these levels. Having made shareholders billions upon billions since 2001, and growing like a weed, Apple seems more likely to hit Munsters' numbers then not. Tim Cook, Apple's new CEO, has done a terrific job of securing parts and supplies like no other COO. It is why Jobs had the utmost confidence in him being the company's new CEO. Apple has potentially given you 600 million reasons to buy it. Now, Munster outlayed the case for another 200 or so million. The reasons just keep on coming.

Traders who believe that Munster is right might want to consider the following trades:

Traders who believe that Munster is wrong may consider alternate positions: