Tuesday, January 31, 2017

Does Apple Have What It Takes?

Apple  [AAPL]

     There comes a point in time when the greats fall. The Ottoman Empire, The Roman Empire, Yahoo, and Apple? They have a market cap of $639.51 billion dollars which makes them the largest publicly traded company. They have had mounds of success thanks to Steve Jobs development and new ideas. Since Jobs died of cancer Apple hasn't come out with any great, new ideas. Items that would blow your sock off like the iPod, or the iPhone, or even the iPad. But things seems to changing.

     They have consistently lost market share to the android market in their smartphone department for the last 2 years. The iPhone holds on to about 43% of the market share and it is getting smaller year over year.  The iPod sales have dropped dramatically since the beginning to 2010 and the iPad is seemingly worse than most other tablets. Apple IS good about releasing new versions of their phone and tablets, but since Jobs, there hasn't been very many advancements. Name the one thing you think of when someone mentions the iPhone 7. No headphone jack for me. Wires aren't that annoying where I wouldn't want to plug headphones or earbuds in. Besides that not much else changed from the bendy 6. 

     Mentioned earlier was the loss in market share to android. The company making the huge push against Apple is Samsung. They have continued to steal away Apple customers quarter over quarter. The Galaxy S7 accounted for about 16% of all phone sales while the iPhone accounted for 14.6%. In Q4 of 2015, Samsung release their numbers that they sold 81.3 million cellphones while Apple sold 74.8 million. The gap between the two continue to widen. Samsung is able to sell there phones at a cheaper price, around $150-200 dollars cheaper, because of they manufacture them all in house. Meaning Samsung doesn't outsource any of the phone manufacturing process thus there cost per phone is cheaper than Apple.  

     Tim Cook was appointed CEO by Steve Jobs before he passed away, and by no means has he done a bad job. He has grown the company to the be worlds largest, there just may be less room to grow from here. It is argued that Apple has a competitive advantage over other tech companies. However, with the decreasing sales from iPads, iPods, and losing market share to android could pull them from the top. They report earnings today at market close. It's completely within reason to see the stock tumble in after hours trading. 

Edit: 6:49pm Jan. 31. Yes, looks like they do. This time...
Edit: 9:03pm June 10. They're good.

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