In August 2011 I wrote an article for the Meander Chronicle entitled: “For Apple, the party is just getting started”.
I have decided for the benefit of readers to reprint this article in full and then to add some comments.
The iPhone 5 will be launched in October 2011. Details of the iPhone 5 are so secret (if you find out they will have to kill you) that no one really knows what the new drop-dead features will be. This has not, however, stopped intense internet speculation. Market commentators think the new iPhone will use the faster A5 processor that is found in the new iPad 2. There may also be an eight-mega-pixel rear camera. So what do you think? Do you think the new iPhone 5 will be a success? I am sure it will – you can bet your last dollar on it!
According to investment banking firm Piper Jaffray there is significant pent up demand for the next iPhone – particularly among Verizon customers (Verizon is one of the largest cell phone suppliers). Among Verizon subscribers who do not already have an iPhone, 55 percent expect their next phone to be an iPhone.
The investment bank also believes Apple will more than double its market share with the next iPhone release, even gaining users from the competing Android platform. And, can you believe it, 94 percent of iPhone owners expect to buy another iPhone in the future. Only 47 percent of Android users feel the same loyalty to Android and 42 percent of these said they were going to switch to the iPhone.
Allow me to wax lyrical. I can’t help it. This company is unbelievable. In the last quarter Apple sold 20.3 million iPhones (a most incredible feat) and has shot way past Samsung and Nokia to become the world’s biggest smart phone maker. Apple also sold 9.2 million iPads – double the sales in the previous quarter.
The Apple share price recently hit US$400 per share to become the world’s most valuable technology company. The innovation continues a new US$999 MacBook Air and US$599 “Max Mini” is about to be released.
Apple will soon become the most valuable company in the world exceeding the market capitalisation of Exxon Mobil. Sales in China grew by a factor of six times. There is a huge opportunity to monetize the technology in this country. Few companies ever succeed in China but Apple is shooting the lights out – and management says they are just scratching the surface. J.P. Morgan says: “For Apple, the party is just getting started”.
A most interesting statistic emerges on a perusal of Apple’s financials. Apple is sitting on a cash pile of US$76 billion. Recently before America raised its borrowing facilities the Treasury warned that they could only spend another US$73 billion before funds run out. Obviously we are not comparing Apples with Apples (excuse the pun) and I don’t know if it is just me but I find this absolutely fascinating.
On a more serious note, the current market turmoil has most investors transfixed in the headlights. Don’t forget that volatility and panic does create opportunities. Don’t just sit there! Get out and do something!
Okay. So there you have it… fast forward to 2019.
The Apple share price has increased from $50 to $265 an increase of 430%! And the company now has over 200 billion dollars in cash.
On top of all this Apple today has considerable political influence. On Thursday President Trump said he has asked Apple’s CEO Tim Cook to help build 5G infrastructure in the United States. Trump tweeted in praise of Apple: “they have it all – Money, Technology, Vision and Cook!” Trump and Cook have just met at Apple’s upcoming campus incentive. It is not bad to have President Trump as a friend.
Apple shares are still compelling value today and they have much further to run.
If you are not happy with your portfolio performance or would like a second opinion,
please do not hesitate to contact Fenestra for a free review of your portfolio.