Apple Inc makes personal computers and software. Our stock pick prediction and analysis is based on several factors that will effect the company long-term. Apple products compete directly with Microsoft’s products as well as the IBM compatible type computers.
Apple has turned itself from a company on the verge of being obsolete to a consumer products powerhouse. Apple currently has 135 retail stores which help introduce customers to Apple’s products which includes the popular iPhone , Mac, iPod and iPad. Apple is expected to grow earnings at the rate of around 20% per year over the next several years.
One of the questions one faces when investing in Apple is how long will its ipods, iphone & ipad remain dominate? The other question is can Apple gain market share on Microsoft. Most of Apple’s business now consumer electronic products. Though many competitors now offer similar products of that of the iphone and ipods. So what will keep Apple ahead of the pack? Some analysts have a theory that Steve Jobs is the visionary of Apple and there is also a cult like following of Apple products that will keep Apple growing long into the future. While there is a lot of truth in that statement, people fail to realize that it’s the Apple software that is the reason why consumers stay loyal to the Apple brand. So even if a competitor makes superior hardware to an Apple product, its the software that will keep consumers buying Apple products.
For the PC world, Apple isn’t trying to gain any significant share on Microsoft. It’s just trying to offer a compelling range of PC’s and notebooks that customers will want to buy. Since it doesn’t have to pay for Microsoft OS licensing fees, this gives it a competitive price advantage over competitors which Apple uses to increase its profit margins.
With a healthy balance sheet and a steady launch of new products, Apple inc is a stock pick that should perform very well verses the average of the S&P 500.