“It’s no surprise that Apple crushed its fourth-quarter earnings estimate. The company delivered earnings of $1.67 billion, up 47% from last year on an earnings-per-share basis,” Nate McMahon writes for The Motley Fool.
McMahon writes, “Apple’s core competency is innovative design and technology. That’s the spirit behind its famous ‘Think Different’ ad campaign.”
McMahon continues, “Apple introduces products that truly wow the market. Think back to the Macintosh in 1984 — the first affordable computer with a graphical user interface (GUI). Today, the iPhone challenges the definition of a phone, by combining a portable digital media player, Internet client, GPS navigator, camera, and … um … oh yeah, a phone. Not only does Apple wow consumers, but it changes the way we think about consumer electronics.”
“The real innovation of Apple’s business model exposed itself when the company focused its core competencies on lower-priced products. Introductory Apple products like the iPod series have had great mass-market appeal, which directly addressed the perception that Apple only catered to high-end markets,” McMahon writes. “Instead of cannibalizing its high-end products with lower-cost product offerings, Apple is capitalizing on an inverse effect.”
McMahon writes, “Apple sold 3.05 million Macs this quarter, an increase of 17% year over year. This increase can be attributed in part to the halo effect, and partly to customer switching costs associated with Apple’s iPod and iPhone customer base. Brand loyalty will keep growing as Apple continues to suck in the mass market through its introductory products.”
Full article – recommended – here.
