Will the iPhone be huge?

Now, with the launch of the hugely hyped iPhone in a few weeks, momentum investors are driving Apple (AAPL) shares to unexplored territory. Hard as it is to believe, all the excitement surrounding Jobs and his new toy may actually understate the impact of this device on Apple’s fortunes.

Beyond the hysteria surrounding its June 29 launch, the iPhone has the potential for adding a totally new, $10 billion-a-year business within just a few years. That’s the kind of thinking that has some analysts pegging Apple’s stock price at 160 and up.

They contend that the blazing success of Apple’s Mac and iPod lines on their own justify much of Apple’s current value. JMP Securities’ Ingrid Ebeling used conservative price-earnings ratio projections for 2008 to calculate that the Mac business, with revenues of $11.7 billion and net margins of 11%, would be worth $42.70 on its own.

[Via Businessweek]