Top Bulls Reasons To Buy — Vote below!

82%
agree
IPhone's Success
92%
agree
APPLE STORES
90%
agree
good product

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82%
agree
1490 votes

  IPhone's Success

Nitin says Apple Inc. (AAPL) reported second-quarter profit (2009) and sales that exceeded analysts’ estimates. Apple’s iPhones and new iPod models helped spur sales of $8.16 billion that yielded net income that amounted to $1.21 billion, or $1.33 a share, in the period which ended March 28 Apple said today in a statement. Analysts predicted profit of $1.08 a share and sales of $7.95 billion, according to a Bloomberg survey.

If customer satisfaction is a good indicator of future growth, Apple occupies the sweet spot. An extraordinary four-in-five iPhone owners (79%) report they're Very Satisfied with their iPhone - a significant lead over number two RIMM (54%) and far ahead of all other major manufacturers.

Image: Smart_phone_satisfaction.gif

More over, a survey undertaken by ChangeWave Research, showed that better than one-in-three would purchase an iPhone beating RIM which came in second at 29%.

Image: Futurephonebuyers.gif

Additionally, the iPhone is now is over 70 countries and are leaving the 'exclusivity model' seen here in the US.

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92%
agree
40 votes

  APPLE STORES

Apple stores are on fire they have more customers than you would believe. I was in the Fashion Valley store in San Diego yesterday and I talk with one of the stores mangers and said that their bu. was increasing hand over fist...

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90%
agree
30 votes

  good product

secure and easy to operate with a real person to assist you on issues

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60%
agree
61 votes

  The iPad

The iPad should create an entire new revenue stream for the company. This product has potential for even more success than the iPhone because it offers a platform for the home AND office. Imagine, a new source of revenue from the consumer and commercial market. Who knows, if the iPad is as big a hit as some analysts believe, it may even be a catalyst for a whole new commercial demand for the Mac. Hop on for the ride.

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61%
agree
44 votes

  Apple has the best products

Nearly all apple products are leading in their market. The upcoming AppleTV 2 will also set new standards and open up a new market.

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54%
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50 votes

  Why is Apple so successful?

Simply put, customers do come first. Noted from a excerpt from Ms Private Equity - " new Apple owners almost find themselves surprised to own an Apple, seems a common trait among the, admittedly small, sample of Apple owners I have encountered. I've watched four or five people who swore they would never own an iPhone give in, buy them and proclaim, in such similar tones one wonders if The Amazing Alexander works for Apple now ("I loved it. It's much better than PC. I am going to buy it again, and again and again..."), that it is the best phone they have ever owned. And this is where I began to wonder, why the near epiphany in reaction? Now I think I know.

Why this reluctantly amazed reaction among iPhone buyers? Because the definition of "phone" created by hardware and network providers today is so limited. Why have so many Macintosh buyers had the same reaction? Because the conventional definition of "laptop" or "operating system" or "computer" created by hardware and software providers today is so limited. Because these companies hate consumers, hate their desires, hate their needs and, consequently, make sure that the conventional definition of, e.g., "laptop," or "phone" is very limited."

This essay merits your attention on any number of levels, irrespective of whether you are long Apple, merely bullish, or even a bear on the company. While the stock has nearly doubled over the last year, its free cash flow has more than tripled. As a result, a company that is growing at more than 20% per year on the top line is yielding 3.9% on a free cash flow to enterprise value basis.

A significant exposure is the possibility of a consumer slowdown combined with increasingly high expectations. Apple is far more consumer-driven than other tech stocks, and a 40x P/E multiple might not hold up if they only beat by a nickel instead of the quarter investors have come to expect. That’s why free cash flow is so important in this case - it provides a solid backstop, and would help justify being patient through a slowdown should it come. If the company can grow at even half the current rate over the next five years, investors are likely to be well compensated for the added risk.

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51%
agree
79 votes

  Vertical integration builds a self-reinforcing business model

Apple's vertical integration provides seamless integration and a self-reinforcing business model that has a unique ability to spread the effects of success in one area into others as well. It also can have a multiplicative effect, as in the case of iTunes and iPod: the successes of each amplifies the successes of the other.

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75%
agree
4 votes

  Growing Macintosh User Base

Mac OS users as of August 2003 1.9% Mac OS users as of August 2006 3.6% Mac OS users as of August 2009 6.5% Mac OS users as of August 2012 8.7% (this increase does not include mobile)

See more at: http://www.w3schools.com/browsers/browsers_os.asp

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0%
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0 votes

  smartest phone ever

a

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0%
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0 votes

  China

apple has even got 10% of china market That is one heck of a lot more apple products to sell in china

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0%
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0 votes

  Valuation

Surely one of the most important reasons to invest in a company is its ability to generate future cashflows. Apple have certainly proved that they can do this time and time again. Yes; a company this large cannot keep growing at the rate that they have been growing for perpetually, as at some point as the can only have a finite % of the world's GDP , however that point is not anytime soon. In the next few years they will be able to grow their bottom line at a rate that is larger than their PE ratio then the price can only go up.

Also, I believe that in 10 years time that you will be able to earn a good chunk of your investment back in dividends as there will become a point that they will simply have too much cash to invest back into the business (some would argue that they are this point now!) and the dividend will quickly ramp up once the top line growth starts shrinking.

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0%
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1 votes

  Look

ff

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45%
agree
20 votes

  China Unicom and Apple Partnership

After months of negotiations and several false starts, China Unicom and Apple have completed a deal that will flood the Chinese market with legitimate iPhones before the year is out.

The iPhone coming to China is a huge deal for Apple and its earnings going forward. The market in China of cellphone users will bump Apple's global addressable market significantly and even if sell-through rates do not meet expectations due to the rampant "grey-market" the channel fill will certainly help Apple's unit shipments and Revenues substantially [1].

  1. "Apple-China deal struck: iPhones official" Article from WC Power Tech Fund Blog
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48%
agree
84 votes

  Retail stores a unique way of extending brand visibility and loyalty

Apple's retail stores remain a unique and effective means of reaching new users and encouraging both brand visibility and loyalty. Apple continues to be the best revenue per square foot retailer in the world.

They also capture profit from retail resell margins and let Apple sell third-party peripherals like compatible printers and other drivers that Apple would not otherwise have access to. The company plans to open several high profile stores in the remainder of the year, and its "Store within a Store" concept and increased presence at Best Buy (BBY) stores has grown to 400 locations, with plans to expand into 600 as the end of the summer. Sales growth rates in all regions are strong and once again sales of Macs in Apple's retail stores, 50% of the time, went to first time Mac buyers. That old faithful Halo Effect at work once again. Without a shadow of a doubt, this company is continuing to grow, and grow dramatically, has some very exciting events and products in the pipeline, and has the potential to significantly expand market share in the Computer and Cellphone business segments.

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43%
agree
23 votes

  Quietly penetrating the Enterprise

Apple is quietly building a stronger and more aggressive sales force for the Enterprise, and with entries like iPhone for Exchange and the increase in acceptance of Macs in the office environment/support by IT, I think we'll continue to see strong growth in market share overall.

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45%
agree
35 votes

  Focus on consumer electronics diversifies its markets

Apple's multi-pronged approach to product development and its new focus on consumer electronics diversifies its markets, significantly improving its expansion opportunities for the next few years.

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37%
agree
16 votes

  debt free//debt free///debt//

there are many companies out there that would do anything for this balance sheet///and a pipeline of new products coming out//stock to hit an all time high this year///

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45%
agree
40 votes

  Apple's been exceeding expectations of others

Apple, Inc has been surprising analysts to the upside for its last four quarters. In March of 2007, analysts expected $0.64 per share, and saw a 36% upside surprise with actual results of $0.87. June, September and December quarters also showed upside surprises of 28%, 17% and 9%, respectively. Current analyst estimates are for March 2008's quarter to be $1.05, and that is an average with 23 published estimates outstanding on this mega-cap growth stock. YOY growth rates appear to be in the 20% plus range, which is well above average and well above industry and sector growth rates. Most of this growth is attributable to the iPod and iPhone lines, which continue to sell well into the marketplace.

AAPL generates over $26.5 billion in annual revenues (trailing 12 months) or $30.50 per share. EBITDA over the same ttm period has been $5.6 billion, and with a debt balance of zero - yes, you read that right - much of that EBITDA falls to the bottom line. AAPL maintains over $18 per share in cash on its balance sheet, or approximately $19 billion.

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40%
agree
22 votes

  iPhone will Boost Cash Earnings

If Apple sells 20 million iPhones next year assuming: $500 ASP, 50% gross margin. 30% tax rate, it will generate incremental cash flow of $3.90/share. Assuming that Apple sells 5 million in each quarter, the accounting treatment would only recognize $1.23/share for 2009. Cash earnings are more than 3x higher than reported earnings. Using more aggressive assumptions: $600 ASP, $250 COGS, the iPhone would produce $5.50 CF/share. Subscription accounting would only report $1.72/share.

The assumptions I am modeling for FY09: 20 million units, $350 subsidy, 65% 16GB ($299) & 35% 8GB ($199) = $614 ASP, $233 production cost, 30% tax rate. This calculates out to 5.32B in after-tax cash flow, or $5.92/share.

Apple’s FCF/share (ttm) is roughly $6.84, a price multiple of 23x. In contrast, Apple trades 31x EPS (ttm). I estimate that $1.10 of the $6.84 CF/share is iPhone related, thus FCF/share associated with all other segments is $5.74. With a 25% growth rate, non-iPhone CF increases to $7.18/share in FY09, and adding $5.92 from iPhone, CF for FY09 totals $13.10/share. This figure equates to a price multiple of 12x, and as mentioned previously, Apple is trading 27x FY09 EPS estimate of $6.05.

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36%
agree
19 votes

  new phone

Apple is comining out with a new phone which ought to increase its revenue this year despite the credit crunch In 11 Jule Iphone 5

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35%
agree
17 votes

  iPhone halo effect on laptops

Apple store traffic continues to grow based on iPhone and iPad. creating a halo effect on other products like MacBook Pro and iMac. Steady flow of Windows converters. 50% of new customers comes from this group.

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35%
agree
17 votes

  1st Time Buyers of an Apple product

People that have never even thought of buying an Apple product, except maybe an iPhone, are buying the iPad and I think they will enjoy the expierence so much that they will start buying more Apple products and Boom! There goes revenues like Apple has never seen before. They will also tell others about the Apple products that they are so newly exposed to and that is a ton of really good solid advertizing for free.

I like and have owned the stock for a long time.

KC

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36%
agree
19 votes

  Can't fight history

I'd be curious how many times in the past few years analysts have stated that Apple couldn't continue sustained growth. Every time someone tries to put a nail in their coffin, they keep breaking out in a big way. As I recall, many people and industry analysts were predicting doom and gloom for the iPad, and that was 2 million units ago. This company is sitting on a pile of cash, they have an extraordinarily innovative taskmaster running the show and probably some of the best talent in the world. As soon as Apple and Verizon come to some sort of agreement, they will sell a ton more iPhones as well. Their stock price is still a bargain at $265 a share.

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30%
agree
13 votes

  Apple's profits

I think Apple's continual growth is due to many fold. 1st being with Steve Job's importance to Apple and the ability to stay the course towards a product/company that at one time was looking at failure during ( the other CEO's " watch). I have had 4 Apple computers and wouldn't trade for anything else. It's a product to be proud of and Apple's engineering proves it EVERY time. 2nd Apple continuously makes a solid product, despite a few glitches , which is to be expected and a web browser 2nd to none. I just wished I purchased Apple stock a lot sooner.

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45%
agree
59 votes

  Apple stands for quality, reliability,ease of usage.We'll buy!

The fact that Apple is now iconic,don't sell out for volume.Stand on better ,than cheeper. If everyone could acquire a laptop,or Apple phone,or Apple TV, it would open the floodgates of just another toaster sitting in the kitchen, next to the electric can opener.I am proud that of the fact that i can buy the best,forget about the rest,.Let the rest earn the privilege of owning or dreaming of the fact that someday,if they get a break,they too can have these best of best concept.Your comp. are trying to convey is there products are as good for less money.Apple should use that right back at them;"hey" we are a little more ,but we are better.If i was going to buy a Mercedes,or Rolex price is not the number one variable,i have already decided about buying quality,not as much about the price.Please keep Apple the best and it will continue to soar for years to come!

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30%
agree
13 votes

  ITablet will own the Netbook/Kindle space

When Apple releases its ITablet they will own the Ereader NetBook markets and at a permium price point.

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33%
agree
15 votes

  Solid products

They build quality products, with great service.

You can use feel the quality. I have totally replaced my PC's with Apples

One of my kid's has upgraded 2/3 of their house. The others will follow when they need to replace their existing PC.

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35%
agree
17 votes

  Apple grasps the future

Apple appears to have a clearer grasp of the shape of the technology product marketplace than any other company serving the consumer, and is far more adept in crafting product design that evokes enthusiastic marketplace response

All products go through normal cycles where sales plateau or decline and that will undoubtedly be true of Apple as well. The company has a clear understanding of this and does not hesitate to refresh products or indeed supercede existing design with new products, rather than waiting for the competition to do it for them

Where other computer companies have failed in expanding into their own retail presence (Gateway, Dell), Apple has famously succeeded

Where its stock price goes will be subject to the vagarities of the market. Technology will continue to advance. And with Steve Jobs leading the company, Apple will be at the leading edge

The marketplace's assessment of Apple's prospects, and its stock price in particular, will be subject to greater volatility given the recent announcement of Steve Jobs complex health issues. While this may impact market valuation, in the intermediate term the company's position in the consumer marketplace and its product momentum should continue to outperform its competitors

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35%
agree
17 votes

  Apple customers will buy anything with Apple logo on it

The existing customer base is loyal and new products carrying the Apple brand are likely to be supported. This loyalty is parodied on the YouTube skit, the "i-Rack": http://www.youtube.com/watch?v=BCeU65q0JLM

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33%
agree
15 votes

  Bullish Cross: Apple is an undervalued stock prize

Apple stock watcher Andy Zaky at Bullish Cross said that Apple is the most “radically undervalued [company] in the tech sector on an objective basis.”

"Apple has more net cash than each of the nine big tech stocks, zero debt, trades at the lowest price-to-cash ratio of only 3.79, grew earnings faster than every other tech company except for RIMM, and is generating almost $3.00 per share in free cash flow every quarter. Just to get an idea of how undervalued Apple is compared to others in the tech sector, one need only to consider where these other tech companies would stand if they were valued in the same way as Apple i.e. if those same companies were met with the same general bearishness that Apple is faced with."

To read the full article, go here: http://blogs.zdnet.com/Apple/?p=2467

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35%
agree
17 votes

  Online back to school shopping and Consumer spending on PC's

We asked respondents doing back-to-school shopping to tell us which online stores they'll be spending more money at this year compared to last year.

Apple.com (AAPL) was far and away the biggest winner, with 8% of respondents saying they'll spend "More Money" there than a year ago, while only 4% said they'll spend "Less Money" (Net Difference Score = +4).

ImagE: Consumer apple.gif

Consumer PC Buying

Going forward, PC buying among consumers remains weak, with just 8% of respondents planning to buy a laptop in the next 90 days and 5% a desktop - down 2-pts from a year ago (August 2007).

But which computer manufacturers do consumers plan to buy from over the next 90 days?

Apple planned purchases for the next 90 days have hit a new all-time high for both Laptops (34%; up 2-pts) and Desktops (30%; up 3-pts).

We also asked whether Apple's recent release of its 3G iPhone has made respondents more or less likely to buy an Apple Mac computer in the future. A total of 17% say they're now more likely to buy an Apple laptop or desktop in the future because of the 3G iPhone; only 1% said less likely. These highly positive findings point to the 3G iPhone having at least some "Halo" effect on Mac sales going forward.

When it comes to Apple's competition, Dell (DELL) PCs appear little changed from our July survey results - with planned purchases of Laptops (28%) down 4-pts and Desktops (28%) up 3-pts. Moreover, Hewlett-Packard (HPQ) has also experienced a noticeable decline since July in planned Laptop purchases (20%; down 4-pts) and Desktop purchases (17%; down 3-pts).

We note that almost 70% of HP's sales come from outside the U.S. - whereas our ChangeWave surveys focus primarily on the U.S. market.

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41%
agree
29 votes

  The reason why apple is going to grow

Here is what everyone's missing:

  • The key driver of Apple's growth over the next year will not be the i Phone or even its i Pod (and it certainly won't be i Tunes). It will be Macs.
  • Macs still account for half of Apple's revenue, and except for the relatively tiny i Phone, they are Apple's fastest-growing product line.
  • The Air demonstrates that Apple is still at the forefront of sexy design prowess, which will increasingly be the most important determinant of computer choices.
  • The Windows world is eroding, with more and more companies allowing employees to choose their own PCs.

Bottom line, Apple's Macs are cleared to make even more impressive share gains in 2008. With half of Apple's revenue still derived from Macs, this will have much more of an impact on the bottom line than i Pods or i Phones. Despite the impact of short-term "Mac world effect" bets, in other words, the Apple growth story is very much intact.

the catalyst for a move higher will be upward revisions to EPS estimates. I don’t think they currently account for the immense sales potential of the new iPhone, as well as the momentum in the demand for Macs. Albeit, Apple is giving up the monthly subscription revenue payments from AT&T (T), thus the increase in volume will be coming at a lower margin. This might possibly be why Apple’s shares have failed to respond more positively.

There are a couple things to consider. First, there have been estimates that the new phone’s manufacturing cost is half of the current iPhone. Second, the MobileMe service at $100 per year adds revenue potential associated with the new iPhone. Sales of iPhone applications from Apple’s App store is another avenue to boost revenue. Most importantly, iPhone sales will expose the Apple brand to many who lack experience, and ultimately boost Mac sales.

Apple isn’t cheap trading at 35x FY08 consensus EPS estimates and 28x FY09. It may actually be cheaper if you believe those estimates are too low. I think the estimates are likely too low, thus Apple would be trading at slightly lower multiples. Apple could be bought on any weakness or pullbacks, since Apple’s share price reflects the fundamentals as opposed to pure sentiment, as it did last fall and this winter.

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30%
agree
13 votes

  At the end of the day, what is the likelihood that an investor can make money purchasing AAPL shares

When all is said and done, AAPL shares are a good proxy for taking a position in the current market. If the market moves higher, AAPL share can be expected to do better than the general market; if the market retreats, AAPL shares will not be immune

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37%
agree
24 votes

  Great long term investment

While the stock has nearly doubled over the last year, its free cash flow has more than tripled. As a result, a company that is growing at more than 20% per year on the top line is yielding 3.9% on a free cash flow to enterprise value basis.

A significant exposure is the possibility of a consumer slowdown combined with increasingly high expectations. Apple is far more consumer-driven than other tech stocks, and a 40x P/E multiple might not hold up if they only beat by a nickel instead of the quarter investors have come to expect. That’s why free cash flow is so important in this case - it provides a solid backstop, and would help justify being patient through a slowdown should it come. If the company can grow at even half the current rate over the next five years, investors are likely to be well compensated for the added risk.

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35%
agree
20 votes

  solar power

Apple has filed a patent application for the integration of a layer of solar cells below a gadget’s LCD display. Essentially, sunlight passing across, say, the iPhone’s screen could be soaked-up by the solar panel beneath the LCD and then turned into useable power for the phone.

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39%
agree
28 votes

  Apples bubble has burst

The bubble on Apple's stock price has burst. This means that traders are moving on and Apple stock is left as a great investment for the longer-term investors. The stock should be less volatile and less reactive to news than it has been in the past year.

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26%
agree
15 votes

  Apple: the big kahuna

So my brother tells me that a friend tells him to sell his investment in Apple/AAPL, "It is dead money... just like Steve Jobs is dead."

Well, yeah, maybe. Certainly, many investors worry about Steve Jobs' health, not solely for the man and his family, but for the company... and for the stock.

Time has proved Steve Jobs to be a singular force of nature; even while deathly ill he still musters the strength to challenge other CEOs, mano a mano, to a screaming match. All in his visionary quest to get the best deal for Apple, Inc. But we investors and bystanders have the opportunity to see, real time, the mettle of Apple's bench; can the other executives rise to the occasion?

Another worry that plagues many investors is whether Apple's heyday is behind it; that the company's phenomenal cycle of innovation now is a thing of the past. Perhaps. Noone, me included, can really confirm that possibility. Apple's strategy might be best defined as evolutionary rather than revolutionary, with a focus on its three core markets. (iPhone, iPod, and the Mac.) Apple chooses to play in only a handful of businesses that manifest huge addressable markets; the company offers a narrow suite of premium products to these huge markets. Apple is most bullish about its iPhone business, where it has massive opportunity to gain market share (and has done so already); one in which software would be its principal differentiator. (Its operating system and, more importantly, the App store.)

Investing is a discounting mechanism; investors buy today to sell at a higher price tomorrow. And vice-versa. But the process of investing discounts the knowns, the perceptions, and how other investors might react to changing perceptions and changing realities. Sometimes, though, there exist some facts that are little known, if at all.


Consider: 1) The Apple retail store. Apple has always bordered on a cult, if not a full-fledged religion, what with the Apple fanatics proselytizing the company's products. Someone at Apple had the bright idea to hire the nicest, friendliest, most knowledgable among them, cloak them in the appropriate priestly robes (er, white t-shirts), and have them share with you, gently, the truth, beauty, and elegance of owning an Apple. The sales at Apple's stores qualify as a retailer's dream, an amazing $4700/sq ft; leaps and bounds ahead of its nearest competition.

And just today, Microsoft/MSFT announced its me-too strategy, that that company also will open retail stores. Somehow, the cachet of selling goods, damaged while still in the box, does not compare to the Apple experience; i.e., Apple's successful retail sales strategy is a result of its well-designed and lovingly-engineered products and the religious devotion of its consumers. Microsoft offers nothing even remotely similar. Nor for that matter, does any company. Talk about elegance.

2) The iPhone. Everyone, me included, splashed water on the notion of Apple building and selling a cell phone. Cell phones were mostly differentiated by shape, color, service provider, and service plan -- until Apple joined the fray. With one fell and resounding swoop, Apple wrested control of the cell phone's destiny from the service provider and placed it firmly into the hands of the phone's builder. Apple dictated terms, and the service providers bullied one another for the opportunity to be the sole seller. In the US, the winner was AT&T, alas, but the iPhone is an instance where the beauty, functionality, and usefulness of the iPhone trump the ugliness of the service provider. Although barely.

But this all is well known. Less well known is Apple's ultra-conservative accounting for iPhone sales. Unlike other cell-phone manufacturers that book 100% of the revenue from each phone sold within the quarter the sale occurs, Apple amortizes the revenue over eight (8) quarters, 2 years! Apple's thesis is to match iPhone revenue with the standard 2 year service contract. This accounting is very conservative, as mentioned, but think about it: iPhone sales reported within any quarter actually represent only 1/8 (12.5%) of the total sales. This means there exists an increasing chunk of revenues yet to report. If accounted for under GAAP, Apple's revenues and earnings from the iPhone would be higher, much higher -- which makes the stock inexpensive, and downright cheap. Go figure.

3) The Applications Store, especially iPhone apps. The Apple apps store upends the entire software business model; previously, a buyer would think long and hard before spending $500 on software; licenses at $30/year also caused buyers to pause before taking the plunge. But at 99¢ -- who needs to think? You buy, and if the program satisfies you, great! And if it fails to work or inspire you, no big deal.

And, suddenly, just like that, everyone has a method to strike it rich, instantly. Write a program, like Ocarina, take advantage of the network effect and sell it to hundreds of thousands of iPhone users, and bling bling, sit back as the cash registers ring. And ring. Yes, you too can be a millionaire.

But I neglect to mention the elegance of this setup for Apple, and Apple/AAPL investors. Apple merely builds and minds the store; non-employees dream up these addictive programs, and sell them on Apple's apps store. The sharing arrangement is 70/30, which means that almost the full 30% of the revenues from the apps store drops to Apple's top and bottom line. The company's SGA for this part of the business is next to nil. Beautiful. The apps store looks only to improve. Who knew?

Oddly, two of the three items above are peripheral to the company's primary mission of making and selling electronic devices. But each also takes advantage of a unique set of circumstances that only a company such as Apple/AAPL, with a visionary leader such as Steve Jobs, can offer.

I could quantify for you even more the value of Apple/AAPL's story, but why bother? You hope to divine the market's every squiggle, a tempest in a teapot, which effort causes you not to see the big Kahuna, the wave that will carry you all the way to shore. Market cycles come, and market cycles go, but value always wins out. Sell Apple/AAPL, if you prefer, because you fear its share price will decline (farther) due to a sloppy market. The best opportunity is on sale at a ridiculously cheap price, growth at a value price. So how about a piece of (apple) pie...?

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23%
agree
13 votes

  Apple is a cult

Growing "cult" followers who possess the ability and capability to "buy." They stand 100% behind Apple products and agree with Steve Jobs' overall market viewpoints, concepts and ideas.

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26%
agree
15 votes

  Growth potential abounds

Mac marketshare is still tiny, there is immense room to grow.

iPhone share will explode as the exclusive agreements expire, as it moves to China, and as it makes inroads in the enterprise. Add this to general growth of the smartphone segment as you've got crazy room for growth here.

With the wildcard of a new Tablet or a new version of Apple TV potentially arriving, more growth could be experienced.

The entire Apple ecosystem ensure each new customer will likely end up buying other Apple products. A purchase in any Apple product soon increases sales in the others.

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23%
agree
13 votes

  Amazing Balance Sheet!

$20 billion in cash after you pay off all liabilities, or 35 billion in cash prior to that.

With a market cap of 90B, 35 billion is quite a bit, let's just say 1/3. That means that their P/E ratio is too high as well. Factoring that 1/3 in, it brings their P/E ratio down to about 12.

For the sector, that's a very low valuation in my opinion, and it's just a matter of time that analysts realize this and adjust their valuation.

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23%
agree
13 votes

  A Compelling Buy

A Compelling Buy: http://www.ecommercetimes.com/rsstory/65861.html

Apple bulls say the stock's valuation is too attractive to ignore, and that concerns about Jobs have already been factored in. They expect Apple to shift gears and push out some low-end products, to open up new markets in a weak economy.

"The fact of the matter is that Apple has become an institution, a culture, that transcends more than one individual," said Kaufman Brothers analyst Shaw Wu. "We think the stock is pretty attractive here. A lot of bad news is priced in. It's trading at 10 times 2009 free cash flow. If you factor in their cash, which is $27 a share, or $25 billion, the stock is trading at only 6.5 times. That's very attractive."

"It's actually fairly inexpensive compared to its competition: IBM (NYSE: IBM) More about IBM and HP (NYSE: HPQ) More about Hewlett-Packard trade at about at 9 times. Microsoft (Nasdaq: MSFT) More about Microsoft is trading at about 10 times. I think Intel (Nasdaq: INTC) More about Intel is at 13 to 14 times, and Cisco (Nasdaq: CSCO) More about Cisco Systems is up there as well. If you look at Apple's growth prospects compared to a lot of these other companies, it's arguably the most promising."

"The fundamentals haven't really changed. Apple still has big competitive advantages," Wu said. "We think a lot of the innovation, a lot of his style, his thinking, a lot of that has been ingrained into the company's DNA."

Even if Jobs leaves for good, analysts say the next six months will be a good test for Cook and allows Apple to put a succession plan into place.

Pacific Crest Securities More about Pacific Crest Securities analysts Andy Hargreaves said he would be buying Apple shares, noting that the company is trading at 3 times cash and 11 times forward earnings.

"You're getting a company that is a leader in smartphones, that has been gaining share in the PC market and probably continues to do so. It's dominant in digital media and has a very talented management team regardless of whether Steve Jobs is there or not."

ThinkPanmure analyst Vijay Rakesh agrees. "We think it's a buy. You haven't seen a valuation on Apple as low as this probably since July or August of '06. It's basically being impacted by near term consumer (weakness)."

Rakesh thinks investors are sitting on the sidelines right now but will move back into the stock after Apple reports results on Jan. 21. "Even in the worst case that he does not come back ... it does not imperil the innovation," Rakesh said.

http://www.ecommercetimes.com/rsstory/65861.html

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23%
agree
13 votes

  Pure Marketing Genius

Apple's marketing genius carries its equally adept innovation skills into profits. It has made Microsoft into the non-cosmopolitan office junkie that most of us hate to be and label as "nerd." Due to this, and its various viral marketing, Apple portrays itself as the pioneer and the only company that sells visibly elegant products that work well. It does so rightfully.

Apple thus caters to a different, less mainstream audience. Although the iPhone is universally best-selling (rich or poor, Europe or North America), all of Apple's products cater to an audience that is willing to pay a higher price for elegance and the wish to stand out from the crowd.

The most likely consumers to be convinced by viral marketing, the chic college students, are also increasingly switching to Apple. Of course, most of its marketing is based on fact and is not just the "demo version."

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21%
agree
14 votes

  Apple recession proof?

"I’m not saying Apple’s immune to the economy. But if you look at last quarter as an example … last quarter in the U.S., the GDP growth was less than one percent. It was miserable by anybody’s calculation. Apple, in the U.S., grew 27 percent."

http://blogs.zdnet.com/Apple/?p=2636

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