"The more I look at Apple (NASDAQ: AAPL) and its new iPhone, the more I consider it to be, perhaps, the most innovative and transformative company in mobile computing today," notes wireless sector expert Nikhil Hutheesing.

The editor of The Forbes Wireless Stock Watch explains, "Put simply, iPhone is a game-changing product, and we are now making the case for investors to buy the stock."

"When Apple first announced its move into the wireless PDA business - in January 2007 when it introduced its iPhone - there was skepticism over whether it would be able to grab market share from incumbents like Research In Motion, which makes the BlackBerry smartphone and Palm which makes Treo handhelds.

"Nobody is doubting Apple today. Steve Jobs' iPhone is in the hands of over four million people and it is now the number two smartphone in the business with a 28% market share. It has surpassed Palm and is nipping at the heels of RIMM's BlackBerry.

"Until recently, iPhone, like Apple's Mac has been a fairly 'closed' universe. It was a great consumer device but it had little presence among large corporate users, the so-called enterprise market. That all changed in March.

"Jobs also announced that he would be opening up the iPhone/iPod touch platform to all software developers with a new SDK, or 'software development kit.' Apple sweetened this proposition by promising developers 70% of any gross revenues their applications generated from the iPhone.

"This was no small news. Essentially, Steve Jobs was unveiling iPhone 2.0 next generation software that could greatly expand iPhone usage. RIMM's BlackBerry, and more importantly corporate America, are now firmly in Apple's crosshairs.

"This approach will mean thousands of new apps for iPhone/iPod touch. The whole point is to make iPhone the 'must-have' device for consumers and business people. Apple is hoping that new iPhone converts will help it break RIMM's hold on the corporate market.

"Another big push for iPhone sales that is not being focused on is video gaming, a business that is booming and I predict will continue to grow.

"Since the iPhone was introduced nine months ago in the U.S., it has also become available in several European countries. Apple says that it sold four million iPhones globally through mid-January. And those iPhone users are fast becoming users of mobile TV, video and other applications.

"I believe that Apple's success with its iPhone and iPod will continue to help the company gain market share in personal computers. In a sign that the company is winning over more users from Windows, Apple said more than 50% of the customers buying new Macs didn't previously own an Apple computer.

"What all this shows is that Apple has a winning strategy and now its wireless devices is leading the charge. I think Apple iPhone/iPod touch sales will skyrocket around the holiday season. This will be great news for Apple shareholders.

"Shares of Apple's stock soared to over $200 on iPhone hype at the end of 2007, only to fall about 40% this year with the falling stock market and slowing economy. Why buy now? Apple has about $18 billion in cash, and no debt.

"Its shares currently trade at 22 times 12 month free cash flow estimates has PE of 29. Both of these metrics are at the low end of its five year range. At the same time, this company will likely grow its top line revenue by 34% in fiscal 2008 as sales of its Macs, iPods and the iPhone/iPod touch pick up.

"I think its reasonable to expect that the company's stock price could trade at, or even exceed, its historical levels of cash flow as the iPhone drives sales. At 25 times free cash flow of $8.05 per share in 2009, my target price for shares of AAPL is $201 per share."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.