The iPhone is the platform. Which gives Apple ($AAPL) a customer + cash value of $548 billion.

This is not coincidental.

A couple days ago I wrote that Apple continues to be undervalued because analysts continue to view it as a hardware company and do not understand that just as Amazon is a "platform" and Google is a "platform" and Facebook is a "platform" -- which is extremely difficult to unseat -- so too the iPhone is a platform.

And this notion of a platform is what confuses so many -- including institutional investors and Big Money that ought to know better. This confused notion of the platform is also why $AAPL trades at such a relatively low P/E, particularly compared to Google and to Amazon (and to Facebook in time).

Money believes that if you control the platform, then you effectively own the market. Google believes this. They build out their server farms and pour billions into Android and offer more and more free services, like email, hotel listings, video, videochat and more not just to profit off your personal data. Just as important, possibly more so, is that they ensure that everything collapses inside their platform, which they own, they control and which they -- almost exclusively -- profit from.

Same with eBay.

Same with Amazon. Amazon is yet another closed walled garden web "platform" that opens itself up only enough to make sure that anything that is sold goes through their platform.

Investors have believed fervently in the notion of the digital web platform for two decades now. The platform is the network, in their view, and owning the network generates greater value and more revenues with each and every new participant. The platform, then, becomes its own de facto market -- and monopoly.

This is why Amazon has a P/E of an astonishing $135. It's why Google has a P/E of $20. 

And it's why $AAPL has a lowly P/E of $13.

Because Apple has no platform. Apple is a hardware company. 

But what if this is no longer the case?

What if the iPhone is the network? What if the iPhone is the platform?

What if the iPhone is able to deliver the uber-high though temporal profit margins found in leading hardware but sustains them -- even grows them -- because it is also the platform?

If so, iPhone alone could become a trillion dollar business in just a few years, as more and more of the world joins this "network". 

The idea is not crazy. 

Would Path exist without iPhone? Would Instagram exist without iPhone? How few would ever use Evernote? Of all the hundreds of millions of Android devices in use around the world, *most* Google mobile searches come via the iPhone. More and more shopping is taking place via the iPhone and iPad.

It is not necessarily because iPhone is so much better than any other piece of hardware on the market. The iPhone is becoming the platform -- for everything mobile and social.

Now what do we have here, just days later?

Well known Sanford Bernstein analyst Toni Sacconaghi magically declares iPhone "a platform". And states that to determine Apple's true value, we must view iPhone as..."a platform".

Investors worry that Apple’s business is so heavily predicated on sales of the iPhone — the source of almost 2/3 of profits — that the company is at risk of being pushed aside at some point if it ever turns out a Razr-like flop.

“However, we believe that rather than being a transactional company with volatile revenues, Apple is a platform company with stable, almost annuity-like revenue streams, driven by strong user lock-in,” writes Sacconaghi.

The apps and other content that go into Apple’s i-devices give it 90% or greater customer repurchase rates, he notes, with an implied “annual churn” for the iPhone customer base of less than 5%, which is “far better than the 15%+ reported for most cable/telco companies,” he observes.

The upshot, he says, is customer loyalty, as proven by anecdotal carrier remarks that iPhone subs stay customers of telco plans longer than most cell phone users.

Sacconaghi computes the “lifetime value” of an Apple iPhone customer at $700 to $900, $600 to $650 for the Mac, and $275 to $300 for the persona who buys an iPad.  

You are welcome, Ms Sacconaghi.