I’m a big fan of Apple, Inc. (Nasdaq: AAPL). I’ve written about it here on several occasions. Apple is so far ahead of its competitors in product design and functionality that it’s hardly worth the comparison, except in a few cases.
But what about Apple as a company? What sets it so far apart from others in the consumer electronics sector? More importantly, how is it as an investment? Is it far ahead there as well? The short answer is a resounding “yes.”
The company rarely fails to disappoint, both on the design side and especially when it comes to revenues and earnings. The company takes a lot of heat from analysts due to its conservative stance when it comes to forecasting revenues and earnings.
Apple’s balance sheet is the envy of Wall Street: It’s sitting on a mountain of cash – north of $31 billion – and not one shred of debt. An enviable position anytime, but even more so in the current recessionary climate.
Here’s the bottom line on Apple as an investment: If you’d bought a few shares of Apple as a Christmas present for someone back in December 1980, they’d be your best friend. The stock has climbed 4,463% since then.
How Does Apple Do It?
Ok, I’ll forget the product comparisons, but just consider these incredible facts:
Forget the fact that its iPod has dominated the portable music player market, completely changing the way music is sold at the retail level…
Forget for a minute that its computers command a significant price premium over similarly configured Windows machines…
Forget that so many mobile phone companies came before it, with pricing plans cast in stone…
The company’s management is the proverbial outside-the-box thinkers: When Apple decides to enter a particular space, and introduce its initial product, it nearly always changes the ground rules, completely upsetting the apple cart for its competition.
And just when a competitor thinks it has Apple’s product strategy figured out and manages to introduce a “me-too” widget, Apple introduces a faster, better one with even more features that customers want.
Notice I didn’t say cheaper: There’s never been a company in modern history that’s monetized great consumer product ideas the way that Apple has. I defy you to name one that’s done it as well.
The best part about Apple is that every time a new would-be competitor comes along, the mainstream media hacks decry “the next iPod killer,” or “the iPhone has run out of steam.” Nervous investors sell, and long-time Apple shareholders just buy their shares.
Source: David Fessler