Originally Posted by
doctorex
doctorex speaks:
siri's eventual market cap depends on its establishment as an unassailable monopoly, which is currently happening. siri's service, i.e., unlimited content into a moving car with no ads, cannot be duplicated by any device or service. teen agers will pack their ipods, and listen to the same menu over and over, but the really prosperous grownup people will migrate to siri.
this means that over the medium term the market will come to realize, correctly, that siri falls into the exclusive club of big monopoly names such as goog, msft, and ebay. these companies, in their growth phases, had extreme p.e. applied by the market. siri will be next.
the monopoly provides the subscription growth, the monopoly provides the pricing flexibility (i.e., if the vendor is a monopoly, where else are you going to go?) and the monopoly releases siri from a lot of costs also, like duplicate admin. and marketing.
let's make a few assumtions and a few calculations:
presently 20,000,000 subs, arpu $10,
therefore monthly rev. $200m, annual rev. $2.4b.
expenses and financing annual $1b (unknowable at this time).
therefore profit annual $1.4b.
estimate p.e. 30 (low for a monopoly).
therefore enterprise value: $42b.
estimate common shares 6b after liberty converts.
therefore estimate sp = $42b / $7b = $7.00.
higher if subs are higher, higher after the price hike in two years, higher if expenses are lower, higher if p.e. is higher.
look for possible $30 sp (optimistic but possible).
doctorex has spoken.