iPhone 4SApple's iPhone is huge. Really huge. But not everyone is all sunshine and roses about the device's current road of success. In fact, some investors are beginning to worry that Apple's iPhone business – which is responsible for almost 2/3 of the company's profits – will eventually turn out a flop of Motorola Razr-like proportions.

Many people saw the iPhone 4S as being a stagnate iteration with only Siri, the 8 megapixel camera and upgraded A5 chip over its predecessor. But the device has since skyrocketed Apple to once again being the most valuable company in the world. So how as the company maintained its momentum? Besides offering beautiful designs and user-friendly experiences, it's the old walled garden.

"Apple is a platform company with stable, almost annuity-like revenue streams, driven by strong user lock-in," said Sanford Bernstein's Toni Sacconaghi.

Because of Apple's closed approach, the company currently holds a 90 percent or greater customer repurchase rate, Sacconaghi said. This equates to customer loyalty, which Sacconaghi has calculated into "lifetime value" terms: iPhone customers are at $700 – $900; Mac are at $600 – $650; and iPad customer are at $275 – $300.

In addition, Sacconaghi offers up an easily digestible "net present value" of customer valuations: $204 billion – and that's just right now. Apple products are only gaining in popularity. That figure is likely to rise to almost $300 billion in fiscal 2013, and near the $400 billion mark at the end of fiscal 2014. That's a lot. But not as much as what Sanford Bernstein's analysts have come up with for customer plus cash value. That number is expected to hit $550 billion at the end of F14 – under conservative assumptions, Sacconaghi said. "That's a 28 percent premium to Apple's current market capitalization."

On the path Apple is currently on, eventually falling into the clamshell Razr trap has about the same probability of me winning the lottery. You never know, though. Some people believe iOS (and Android) will soon be on the decline.

[via Barrons]