iJog for iPod

How do you value a company that just seems to "get it"? That's my dilemma with Apple (Nasdaq: AAPL  ) . On Tuesday, the Mac maker teamed up with Nike (NYSE: NKE  ) to introduce the Nike+iPod Sport Kit. It's got a tiny electronic sensor, designed to slip into a Nike running shoe, that wirelessly transmits fitness information to a receiver plugged into an iPod nano.

My wife says it best: "That's so ... cool!"

Indeed, it is. The system even comes with an endorsement from seven-time Tour de France champ (and Nike endorser) Lance Armstrong, who happens to be boning up for a run at the New York City Marathon -- presumably with Nike shoes and an iPod nano.

I find the technology involved the most impressive part of this deal. Small wireless gear isn't easy to work with. (Seriously, how many times have you wanted to throw your cell phone out the window of your moving car?) It's got to be even more difficult to make it work when it's buried in a shoe, and a lightweight running shoe at that. Yet the kit, which is expected to be available in the next two months, bears a dirt cheap target price of $29.

That doesn't sound like much -- and it isn't, when you consider that Apple has booked more than $17 billion in revenue over the most recent trailing 12 months. Still, Nike has four million iPod-ready shoes available now, and according to BusinessWeek, that total could soon grow to 10 million. That's an immediately addressable market of up to $290 million on kits alone for Apple.

But of course, that's not where the real opportunity lies. Jobs & Co. need to give consumers excuses to buy more and different versions of the iPod, especially now that there are roughly 50 million of the devices already in consumers' hands. Creating specialized uses for the iconic music player is one way to do so. In that sense, I believe the "Nike+" program will likely be the first of many similar partnerships.

That has me wondering: Is Apple's stock really expensive? The company excels at marketing. It earns the highest customer-service marks in the computer industry. Its products are almost always technically astute. And its business model is so good that competitors are copying it. Just how successful does Apple have to be before we agree that it's cheap?

Take a bite of related Foolishness:

High tech. Biotech.Nanotech. Any tech. David Gardner and his Foolish band of analysts cover it all forMotley Fool Rule Breakers, and they've uncovered four multibaggers in less than two years. To find out which stocks are powering the portfolio, just ask us for a30-day all-access passto Rule Breakers.

Fool contributorTim Beyersnow laments that he bought his wife a video iPod for Christmas. Whoops. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out which stocks he owns by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 513827, ~/Articles/ArticleHandler.aspx, 10/28/2016 1:06:24 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 hours ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
AAPL $114.48 Down -1.11 -0.96%
Apple CAPS Rating: ****
NKE $51.89 Down -0.08 -0.15%
Nike CAPS Rating: *****