“Can you, the Foolish investor, make money with Apple? And will your returns have a high likelihood of beating the market? Yes, and yes,” Tim Beyers writes for The Motley Fool. “At no time in its history has Apple ever had 70% market share of anything, even with the original Mac. But that’s what it has with the iTunes Music Store. And the iconic iPod took more than 30% of the total market for digital music players in 2004, when it sold 8.4 million units, according to researcher In-Stat. For those keeping score, Apple sold more than 14 million of the devices in the recently completed first quarter. And there’s no sign of demand slowing… We’re a planet of 7 billion people, more than half of whom are becoming more technologically astute. (I’m including China and India, of course.) Which means, Fool, that this market still has a looooong way to go before it’s saturated.”
“History is less kind when it comes to Apple and chip platforms. Flash back to 1993 for a moment. That’s when Apple made the switch from its original architecture to the PowerPC platform, the one it’s now abandoning for Intel. The performance gains appeared attractive at the outset, but it took a while for many key software programs to be updated, including Microsoft’s (Nasdaq: MSFT) popular Office suite. Yet that didn’t stop demand for the new computers. In fact, Apple couldn’t keep up. According to the online archive apple-history.com, the Mac maker had more than $1 billion in backorders for PowerPC Macs by June of 1995,” Beyers writes. “Those should’ve been glorious days. Instead, they were marred by manufacturing issues and the rollout of Windows 95, which took another step toward emulating the Mac’s noted user interface. Cynics will undoubtedly point out that Apple is transitioning to Mactel in the same year as the release of Windows Vista. But the coincidences end there, Fool. First, no one knows when the perennially delayed Vista will make its appearance. Second, most Mac components are now held by suppliers, and Intel is as ruthlessly efficient at computer-building as anyone in the industry. This isn’t the struggling adolescent Apple of the ’90s. This is the adult and more responsible Apple.”
Full article here.
It’s a duel between Fools:
Read The Motley Fool’s Rich Smith’s bear argument here.
Read Tim Beyers’ bullish rebuttal here.
Read Rich Smith’s bearish rebuttal here.
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Related article:
Is Apple Computer stock still a ‘buy’ and is it due to split again? – February 02, 2006