Nike (NYSE: NKE) and Apple (NASDAQ: AAPL) working out at a Gym near you

In iPod - Apple's Best Innovation, I had talked about the growing and successful partnership between Nike and Apple:
One innovation that Apple created with another Top 20 Innovator of The Innovation Index, Nike, is Nike Plus or Nike + iPod. Apple calls it the "ultimate synthesis of sport and music: a pair of Nike+ shoes, an iPod nano, and the Nike + iPod Sport Kit." Apple Inc. (NASDAQ: AAPL) and Nike, Inc. (NYSE: NKE) are two of the Top 20 Innovators of The Innovation Index.

Nike and Apple announced another key innovation today in their quest to get more customers to use Nike + iPod as they work out in the Gym. The partnership that began with customers using Nike shoes and iPods for running and running clubs is culminating in the Gym. After all, according to Nike, runners have logged in close to 50 million miles on Nike shoes with iPod, making it the world's largest running club.

Nike and Apple are working with major gym equipment manufacturers such as Life Fitness, Precor, Star Trac and Technogym to make their cardio equipment Nike + iPod compatible so health club members can easily track workouts on cardio equipment like treadmills, ellipticals, stationary bikes and stair climbers. Nike + iPod users will simply plug in their iPod nano into the equipment at the start of their workout to automatically record their progress. Users can then connect their iPod with their computer to upload the workout to www.nikeplus.com.

At participating gyms, including 24 Hour Fitness nationwide and Virgin Active Health Clubs internationally, members will soon be able to use Nike + iPod to track their workout and log their data on www.nikeplus.com.

-- Nike + iPod will allow gym members to track progress, set goals and make challenges on www.nikeplus.com.

-- By using the www.nikeplus.com coaching tools, personal trainers now have the ability to help clients chart their progress.

-- When gym users connect their iPod nano to their computer, their workout data is sent to www.nikeplus.com through iTunes. This workout data is converted to "CardioMiles" so that users of cardio equipment can easily set goals and participate in challenges with runners and with users of other cardio equipment.

Nike + Sport Music has also been extremely popular on the iTunes Store (www.itunes.com) offering a wide range of playlists perfectly suited for your favorite sport.

Bottomline:

1. This expansion of the partnership between Nike and Apple will create 5% to 10% more iPod nano sales in 2009 when most gyms would have deployed the new equipment.
2. It remains to be seen on whether Apple will also make this compatible with the latest iPod touch, although this makes strategic sense. Most new iPod buyers will buy iPod touch. If Apple makes the gym equipments compatible with the iPod touch, expect 1% to 5% more sales of iPod touch in 2009.
3. Apple will see modest incremental sale of sport music on the iTunes Store - in the range of 1% to 5%.
4. Nike will see a solid upside in the Nike + iPod shoes in 2009, large enough to impact the topline revenue.

Innovation Index Group, Inc. maintains a Buy rating on both Apple and Nike, with price targets of $250 for Apple, and $80 for Nike in 2008.

Related Articles:
Why Apple will hit $250 by December 2008?
Apple Creativity and Innovation in Business Case Studies

The Innovation Index Reports:

Invest in The Innovation Index - Innovation Index Fund tracks The Innovation Index
Introducing The Innovation Index - Detailed information on The Innovation Index
The Innovation Index closes 2007 at 66% - 2007 Annual Report on the Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Innovative Companies
Annual Report - Chapter One - Total Innovation Activity - 2006 Annual Report One
Annual Report - Chapter Two - The Top Innovator - 2006 Annual Report Two
Annual Report - Chapter Three - The Innovation Insights - 2006 Annual Report Insights
Innovation and Stock Performance Correlation - The Innovation Index and Stock Performance

Disclaimer: Innovation Index Group, Inc. invests in Apple, Nike and Top Innovators of The Innovation Index.

References:
Nike and Apple Press Release

Why Apple will hit $250 by December 2008?

Apple Inc. (NASDAQ: AAPL) is one of the Top 20 Innovators of The Innovation Index, and the number one innovator.

Here are five reasons on why we believe Apple stock will be worth $250 by December 2008:

1. Apple is grossly undervalued. Apple stock has declined much faster relative to the overall market. Once the market rebounds, Apple stock will also appreciate, albeit exponentially. We believe such a rise in Apple stock will begin in Summer 2008.

2. Apple is on track to sell at least 10 million iPhones in 2008. This we believe is on the low end of the estimate. Once Apple reduces iPhone pricing further (we believe this will happen in Summer 2008), Apple will sell closer to 12 million iPhones in 2008. Apple will also innovate the tap keyboard tool on the iPhone and provide an automatic landscape view to type in emails and text messages. This would create a bigger following for iPhone. Finally, Apple iPhone software will get better for corporate emails.

3. Apple iPod sales will build momentum in Summer 2008 and second half of 2008. With the base iPod shuffle now available for only $49, Apple iPod sales will catapult. The bold drop of $30 in price of the base iPod will create a jump of at least 15% to 20% in iPod sales in 2008 - higher than what the analysts are expecting.

4. Apple MacBook Air will be a runaway winner in laptops in 2008. Apple is poised to increase its growing marketshare in the PC business with the new MacBook Air, and the new MacBook and MacBook Pro models will also help. Before Summer 2008, Apple will reduce the entry prices on all their laptops to create hyper growth in laptop sales. On the other hand, the Mac business will come onto its own in 2008.

5. Apple iTunes Movie Rental business combined with the American Idol music are your dark horses for 2008. Apple will show sustained growth in the movie rental business, and we believe this will begin to show top line difference towards late 2008. Next generation Apple TV and iPod Touch should also help drive more sales iTunes Movie Rental.

Apple stock will be worth at least $150 by Summer 2008, will pick up steam and rise to $200 by Fall 2008, and close out the year over $250. The only caveat is the overall health of the retail economy worldwide.

Disclaimer: Innovation Index Group, Inc. invests in Apple and Top Innovators of The Innovation Index.