15 years and 5 months ago · listen stop
Everyone is talking about stock, housing and credit markets, the next bubble/depression, you name it. With people asking, I have decided to compile the 10 reasons why I invested in Apple stock, and sincerely, why I don't give a damn about all the bad news. So, here are the 10 good reasons to invest in Apple stock:
- Apple's market share as a computer maker is on a strong up-trend. Is now 17.6 percent of the market, and pushed Apple to number 3 in the list of PC makers. Apple laptops and desktops have the "cool factor" that other brands just can't match (with the possible exception of Sony), and they are greatly popular with students and teenagers. A new generation of users (and spenders) is growing accustomed to Apple's operating system, with a strong feeling that Windows is lame.
- Apple dominates the Mp3 player market, with a market share higher than 85%. The domination is global, not just in the USA. Think Europe, Japan, China, Australia, South America. Every single wealthy teenager on the planet owns or wants to own an ipod. The language changed, even if you are talking about a competition's product, you call it an iPod. And there is no competition on sight.
- Apple retail stores are the best performing stores in the USA: it generates 4.032 USD per square foot per year. Why? Just walk in an Apple store, then compare it to any other possible high tech shopping experience: you will get the answer. Only a handful of stores are outside the USA. So, there's a lot of growth space for the company: new stores are coming in Germany, France, Italy and other wealthy countries. Here in Portugal, people is waiting for ages...
- Apple dominates the music download industry. It's probably the only company in the world that is still making real money on music, with iTunes Music Store reaching the 3 billions songs sold last July. Everybody knows that Mp3 players worldwide are stuffed with illegally downloaded songs, but still, a percentage of those songs are payed for and Apple has a huge market share of the business.
- With iTunes and Apple TV, Apple is set to be a front runner in the movie download business. It's the future, believe it or not. Maybe not tomorrow morning, but soon. The cost, speed and ease of use of downloading a movie and watching it on your TV is a killer advantage for the customer. The only block to this business are the big studios, but even they will have to adapt. Just wait.
- Apple software is simply better. Look at how Vista has been greeted by users, it's almost a joke. And the best features are "apple looking". The operating system market is "viral": the more users run an operating system, the more likely other users will hear about it, experience it, choose it as a new standard. That's why Leopard is going to be a huge hit, boosted by the "halo effect" of booming laptop and desktop sales. And slowly, Apple is going to sneak in the corporate market. Yes, they all use Windows. And yes, a fax machine looked like the coolest thing around just a bunch of years ago.
- Apple is targeting the upper level consumer, the people that spend extra cash to get the bestdesign and the "identity" effect of owning a gadget with a brand. Apple controls the entire processfor the entire product: software and hardware, production and sale. This translates in better margins all down the line.
- The company is as strong as hell. P/E ratio at 37 might seem high, but it's pretty normal if compared to others (RIMM 63, GOOG 41, AMZN 109, YHOO 45). Dell, Hp and Microsoft have a lower P/E, but lower revenue growth expectations. Plus, Apple has a load of cash and zero debt.
- And.. oh.. there's the Iphone. The Iphone is going for sale in the rest of the world in the next 12 months. And people here in europe are waiting for it like you await a messiah, not a piece of hardware. The proof? Apple is the only phone maker in history that gets a bite of revenue from the phone companies. That's extra cash, at no additional cost for Apple.
- One more thing... Apple is the only company with the ability to disrupt the market. The focus on detail, the strong control on every step of the production phases, the huge investment in research, design and marketing make Apple a company with a huge future potencial. I put my money in.