“As Apple continues to set new records for revenue and profits seemingly every single quarter, it’s become common for analysts and Apple observers alike to say that Apple’s tremendous growth can’t continue because the company is quickly running into the law of large numbers,” Yoni Heisler writes for Network World.
“When people reference the law of large numbers with respect to Apple, what they really mean to say is that Apple can’t keep growing at 20+% increments indefinitely because it will eventually become so large that maintaining these growth levels becomes practically impossible,” Heisler writes. “After all, a company with $100 million in revenue need only earn an additional $20 million to increase revenue by 20% while company with revenue of $40 billion needs to earn additional $8 billion to achieve the same 20% increase in revenue. Clearly, the latter is much more daunting.”
Heisler writes, “But as is typically the case, Apple is poised to buck this trend longer than most people realize… The real operative variable isn’t revenue, but rather the factors that drive revenue – margins and marketshare. And when it comes to those two metrics, Apple is sitting pretty… Whether Apple can continue to deliver outstanding quarterly earnings result is a valid question, but that analysis should focus on marketshare, margins, new products, new revenue streams, increased competition – all of these are much more relevant to an analysis concerning Apple’s future financial prospects.”
Much more in the full article – recommended – here.
MacDailyNews Take: As we wrote as recently as yesterday:
What is Apple’s share of the smartphone market? What’s Mac’s share of the PC market? How many hundreds of millions are primed to buy their first tablet, a market that Apple created and dominates with iPad?
Apple’s current size is meaningless because their addressable market is virtually limitless.
[Thanks to MacDailyNews Reader “Carl” for the heads up.]