JUST when analysts and investors thought it couldn’t be done — Apple Inc (NASDAQ: AAPL) has defied the odds once again. The tech giant with the Midas touch crushed Wall Street views, reporting its best non-holiday quarter ever as customers continued to snatch up its iPhones, Macintosh computers and iPods. Apple earned US$3.33 per share in the quarter, easily topping analysts’ average forecast of US$2.45 per share. Its latest innovation, the iPad tablet has already begun to see robust sales, and with buzz surrounding a major iPhone upgrade — Apple may just be unstoppable. Though its shares have risen 16 per cent since the start of the year and are more than double their level at this time last year, it’s still not too late for investors to consider getting a piece of the pie.

Over the past three years, Apple has gone from strength to strength, boosting Earnings per Share (EPS) by an average annual rate of 40 per cent. Just last week, the company overtook Google Inc (NASDAQ: GOOG) as the second-largest tech firm, with a market capitalisation of approximately US$234 billion, closing in on Microsoft Corp’s (NASDAQ: MSFT) US$275 billion pinnacle position. The secret behind Apple’s success is its proven business model. That is, being innovative is one thing, but attracting customers to aggressively priced products amid a slowing economy is another. This is evidence that Apple has a clear competitive advantage over its peers. Apart from the sleek design of its products, customers are willing to shell out big bucks for Apple’s cleaner interface and less “buggy” technology.

For Apple, the proof is in the numbers. Since the Company launched its biggest seller, the iPhone, just three years ago, it has sold over 50 million units globally. And the momentum is still robust, with iPhone sales driving the latest quarterly results as customers can’t seem to get enough of “app world” heaven. With 185,000 apps available at its App Store, Apple trumps rival GOOG which offers a mere 38k apps on its online store for its Android mobile software platform. iPhone sales more than doubled in the second quarter to 8.75 million units, no easy feat at a time when competition in the smartphone market is heating up. For that, Apple can thank its growing international markets like China, Japan and South Korea, where the iPhone is quickly becoming a hit. The company’s recent additions of new carriers in key overseas markets such as Europe, has significantly assisted in beating sales targets.

Turning the focus to Apple’s other revenue earners, sales of Macintosh computers continue to be strong, as 2.9 million units flew off the shelves in the quarter, an increase of 33 per cent compared with the prior year. Though volume-wise iPod sales slipped one per cent to 10.89 million units, revenue from iPods rose 12 per cent to US$1.86 billion, as customers upgraded to more expensive iPod Touches. Added to this, Apple’s latest gadget, the iPad is living up to the hype — selling 500,000 units in the week after its April 3, 2010 release. Apple’s chief operating officer, Tim Cook said that the Company is “shocked” by the initial demand for the iPad, whose sales will be reflected in the upcoming fiscal third quarter. In fact, sales have been so strong that Apple has pushed back the international launch of the tablet to ensure that there is enough supply to meet US demand.

Apple has consistently outdone itself by innovating revolutionary products and revamping its existing line-up. By keeping ahead of the game, Apple also keeps customers, investors and analysts satisfied and wanting more. Thankfully, they may not have to wait too long as chief executive officer Steve Jobs said that there are “several more extraordinary products” on the way for 2010. While the company hasn’t officially announced plans for a new iPhone, word on the street is that it is set to announce a new version of the popular smartphone this summer. A new iPod is said to be in the works for September, and possibly an iPhone on Verizon’s network, just in time for the holiday season.

Furthermore, in a direct attack on rival GOOG, Apple unveiled its new mobile advertising system as it looks to deliver a new generation of interactive ads to its iPhone, iPad and iPod Touch line-up. By integrating an advertising system into its products, Apple is hoping to tap into a potentially lucrative market as mobile advertising becomes the “next big thing” for the Internet world.

Few analysts doubt Apple’s ability to make good on its promise this year. In fact, out of 43 analysts surveyed by Thomson Reuters StarMine, 37 have either a “buy” or a “strong buy” rating on the stock, four rate the stock a “hold”, and only two maintain ratings of either “sell” or “strong sell”. Following the Company’s blowout quarterly results, it came as little surprise that more than a dozen analysts raised their price targets on the stock beyond US$300 per share. For example, Barclays Capital lifted its price target on the stock to US$315 from US$300, as it continues to think that Apple’s valuation is “very attractive”.

The numbers support this projection – analysts anticipate 45 per cent EPS growth for 2010 or over US$ 13 per share, which means that at current levels (US$269.50 close price on April 26, 2010), the stock is trading at 20 times forward earnings. For investors who took SSL’s advice in October 2008, they would have seen a return of more than 200 per cent over the period. However, for those who have been less quick to move, don’t let this buying opportunity pass you by again.

Kimberly Thelwell is a research analyst at Stocks & Securities Ltd. You can contact her at kthelwell@sslinvest.com.