I get ask all the time if Apple I should invest in apple in 2013. Our Outlook for Apple (AAPL) remains bullish – as long term believers in the story.
Apple as a business has made changes – last year it paid a dividend for the first time in its history – albeit barely making a dent in the company’s $100 billion cash pile. Add to that, the Company’s first ever sale! Sounds incredible given these are regarded as “normal” business decisions in the traditional corporate space. However, these are new grounds for Apple – something which really is an extraordinary business.
The recent and phenomenal success of the iPhone 5 and the new mini iPad are likely to propel the share price further, as consumers cannot get enough of the Company’s products.
Where is the growth to come from? Apple’s track record suggests the organisation has a tendency to create its future and subsequent demand for its products, rather than responding to where the market is at. Even those who have been long term hold outs of not buying into the iDistribution model (think of the Beatles and their long running dispute with Apple’s iTunes) are finally moving over to the White Side.
Even Aussie rock legends AC/DC finally have made their music available for iTunes.
Where next for apple? Our outrageous prediction for 2013 is up higher – north of $650 a share (currently $560) Why? Because it’s model works and post Jobs, the product launches and pipeline continue to deliver. Recently we added Apple TV at home. It brings the convenience of iTunes to movies, TV shows as well as other features. It is cheap to buy the technology, you get to choose what you want to watch, rather than what your Cable TV provider wants to bundle for you. Add to this the portability of content via iTunes (I am sat on a flight to Perth right now, writing this and having just watched the movie that I wanted to see) and is pretty simple to use for those without technology savvy kids!
Not really that outrageous a prediction but a business which delivers what people want, or even what they didn’t know that they wanted until they bought the product, has a mountain of cash, which simply keeps growing, and remains committed to its “build it from top to bottom, in house”, has its own bricks and clicks distribution channel and looks cool – who wouldn’t be buying something sleek?
Funnily enough a couple of days ago, a mate of mine (who is in the IT game, and is one of the more cynical and humorous people I know) badgered me on my Apple usage, questioning why I would want to pay over the odds for average technology.
My response, probably like most of the hundreds of millions of users around the world was: “It works, it is simple to use, and everything meshes together without hassle – I guess I am paying for convenience (not to mention the products themselves look great)”