Apple has just reached the inevitable $600 a share mark. But it seems at every $100 mark, economic strategists (worrywarts really) say that this is the point where Apple will stop growing. They say it’s unprecedented, Apple’s too big, Steve Jobs is gone and we think Apple is going to go down just like Microsoft has in many ways.
But didn’t Steve’s popularity possibly overshadow the many other wonderful people working there. Yes, Steve was great, I loved Steve, he was such a character, but he did overshadow the other insanely great people working there. Steve was not a one man army and he should never be regarded as such. He was a great man, who did a lot for Apple, and while he was a person hardly ever seen on this world, Apple will, with a few more speed bumps, continue. Apple will continue and they have even more room to improve and grow. Just about everything that comes out of Apple is hot (sometimes literally, case and point the new iPad). Let’s go into detail of the insane(ly great) stock prediction.
Macs: Mac computers, however overlooked, are a great source of Apple income and withe new thinner, more powerful Macs (desktops and laptops) coming up (Steve said that MacBook Air was the future of laptops). Macs grew their revenues 26% Y/Y in the past quarter and 22% the last year. These numbers improved from the year before and will continue to improve from here. There may come a day that Macs beat PCs, however it seems that day is not here yet, as Macs only have 9-10% of total market share. But when I looked at market share numbers last year it was only 6-7% depending on the time of year, so it appears it is on the rise.
iPads: Now this is where Apple has serious traction (almost to the point of an iPod-like monopoly). However, at first, the iPad was viewed as a “toy” and it was never taken seriously. Many people believed it was a dud. Steve himself grew depressed about it. Of course, we all know what happens. Now, millions couldn’t imagine living without one. People feel this way about the iPad even though it was released only a mere 2 years ago. 55 million iPads were sold since it was released that short time ago. It is expected that the total number of iPads sold this year alone will be a little more than that number at about 60 million. As I mentioned, Apple is definitely trying to achieve an iPod-like market share here, and they are doing a pretty darn good job at it. 58-60 percent of market share belongs to iPad (iPad 1 and 2 only) with that number to only vastly improve once Q1 sales numbers for Apple are released along with every other quarter in the year, and really for the next several years.
On the opening weekend alone (Friday-Sunday) three million iPads were sold. To put this in perspective, the original iPad sold 3 million in a little under 3 months, so it took them a quarter then to sell what Apple sells now in just three days. The iPad market share number is expected to rise to around it’s “original iPad” market share value ~85% by the end of the year. It is expected iPad sales will reach ~70 million in the year of 2012. Android may be the leading market share OS but they are made by several companies, and these companies have no more than 5% market share each. By 2015, Apple is expected to sell 400-500 million iPads with a total of 600-700 million total tablets sold globally. To put that into perspective, the total PC sales last year were 409 million units.
IPhones: The iPhone market share is at about 44.9 percent for smartphones and with people starting to switch over from feature phones to smartphones that number will only continue to increase. The iPhone provide for about 50% of Apple’s revenue. Remember that the iPhone was only released 5 years ago, and it has grown a lot since then. In 2015, the smartphone market will probably hit a billion. With Apple retaining 50% or more of this, it will provide for a lot of cash flow. The iPhone, upon release, sold ~5 million units as compared to 37 million units in Q1 2012 which isn’t even over yet, it ends March 31st.
iTunes: After the Mac, iTunes is easily the most easily forgotten money maker. We use it so much, with everything costing so little, it’s almost as though we forgot its there. It provides for so much of our media-filled lives. iTunes had almost $2 billion dollars in net sales just last quarter. The App Store has just recently seen its 25 billionth download. Hard to believe but it was only released 4 years ago. You may have also forgotten, but the App Store IS part of iTunes. So that is why I’m including it in with iTunes. iTunes had $2 billion in net sales last quarter alone. It is expected to reach $32 billion by 2015. This number doesn’t even include iTunes Match, iCloud and whatever comes out of the inevitable iTV. This brings me to my next subject.
iTV: There is never been a product in the Apple rumor mill that has gained so much controversy and discussion as this one. However, there are naysayers that say Apple is entering a field too late with too many competitors, and while this may be true, they aren’t going in unarmed. Let’s also keep in mind that Apple has disrupted other markets in the past and that these people say this kind of stuff almost every time about something that Apple is just about to release (i.e. iPod). Here’s some facts about the TV industry as it stands today. 210 million TVs were sold last year. That was a 16% growth over the year before it. I expect that many people will line up to buy the iTV. According to the Meeker effect, the iTV will sell more in less time since the company has a already set record in doing so (100 million iPhones in 6 years, 100 million iPads in about 4 years so they expect the iTV to sell 100 million units in 3 years). The more the company is known to deliver great past products, the more likely people are going to buy future products. It’s the “buy again” customers Apple really shoots for, and they hit these guys right on the head. Now with a TV, there will be advertising, this is where iAd (anyone remember iAd?) comes in.
iAd- Yes iAd, that forgotten about Ad product by Apple that is going to make a comeback when it is put into iTVs. With these TVs, Apple has a chance to do a major whammy to Ads, since Apple is popular, many people buy Apple products, and because of this the iTV will be another product that Apple will make a major impact in, because of this, people will want to make advertisements for it. I mean why watch boring commercials when you’ll have more interactive advertisements on your TV, not everyone has a recorder on their TV you know. The mobile ad business will be about $25 billion in 2015 and I’ll be darned if Apple doesn’t try to get a large chunk of it, TVs or not.
Education- While Apple is dropping its old MacBook sales from schools, it is bringing in iPads. Apple’s dream goal (and I’m sure it is possible) is to have as many classrooms in America and around the world having iPads and making a unrecoverable blow to the paperback textbook companies. Apple has a huge chance here and it really should work on it, after all, the textbook industry is a $8 billion a year industry which Apple could easily end up taking all of it. Who knows, maybe Apple will be the ones getting rid of those clunky 2004 Windows XP pieces of junk out of classrooms and school libraries and install iPads in place of them. I mean who doesn’t want to read off the new iPad’s gorgeous display.
So to wrap up this article, Apple could end up being (easily) a trillion dollar company in the next 10 years and a $750 billion or more in 2015. Apple’s growth is only going to climb from here. They will not go down from here, only up, even if that up is trillions of dollars worth. I know that Apple will get there. Just imagine, all of this from a garage startup that grew rich, almost went bankrupt and then has soared since then. Except this time, it may continue to soar indefinitely, we’ll just have to see what happens in the years to come.
Thanks for reading,