“Over the past ten years, Apple stock has soared nearly 1,300% thanks to robust demand for the iPhone and iPad, which together accounted for 71% of the company’s top line last quarter,” Leo Sun writes for The Motley Fool. “Between fiscal 2004 and 2014, Apple’s annual revenue soared 2,108% to $182.8 billion.”
“But looking ten years down the road, things look murkier for Apple,” Sun writes. “The biggest problem for Apple is its lack of product diversification. In the fourth quarter of 2014, it relied on iPhone sales for 58% of its revenue. Although iPhone revenue rose 21% year-over-year thanks to the launch of the iPhone 6 and 6 Plus, it’s a growth trajectory that will be tough to sustain over the next ten years.”
“The moment that iPhone sales stop rising, Apple stock will tumble. To prevent that from happening, Apple encourages brand loyalty by tying all app and media purchases to an Apple ID, ensuring that iPhone users think twice before switching to an Android device,” Sun writes. “That strategy, enhanced by the iPhone’s premium appeal, pays off. In July, Morgan Stanley’s Alphawise tracker found that 90% of iPhone users stick with Apple, compared to a 77% retention rate for Samsung.”
“If Apple can’t properly diversify its top line and iPhone sales slip, the stock could falter. If Apple subsequently boosts buybacks and dividends to placate shareholders, it could tie up the cash it needs to make major acquisitions,” Sun writes. “Most importantly, investors should remember that Apple’s walled garden can both help and hamper its long-term growth. However, if Apple successfully rolls out new products, the stock could soar higher as the Apple brand expands beyond phones and tablets.”
Read more in the full article here.
1 billioooooon dollars!! in Dr Evils voice 🙂
It might go down, and it might go up. It depends on what happens in the future. My bill: $1,500. Thank you.
What go up must come down, even if AAPL runs up to $203 as Carl Icahn wishes, if it misses one earnings, it’ll tank. that is part of WS games.
If it tanks to $175 I’ll suck it up and continue to hold ’till it goes back up 😉
Did the author say anything?
Lol….:)
I read tumble, robust, murky, soar. ???
Oh, fer goodness sake! They can’t figure out where the price will be next quarter and they’re forecasting out 10 YEARS?!
OW! My eyes rolled up in my head so hard they got stuck!
Yer, exactly. To paraphrase this bag of hot air – AAPL’s been going great guns for 10 years (well closer to 15, but who’s counting) but I can’t see into the future more than 5 minutes, so AAPL has a problem… Never heard of this turkey, but I’ll bet he’s been saying pretty much the same thing for the last 10 years.
Oh. So THAT’S why I haven’t switched to Android. Good to know.
An idiot who likes to speculate and get clicks.
I especially l like how he believes that the future 10 years of Apple’s finances will be “murkier” than the past ten years!!
Given that he cannot understand the facts about Apple from the past 10 years, maybe for him is really is just different shades of murky … He’s in a different world.
My bill…..$3700….imac 5k and ipad air2
Beyond phones, tablets, laptops, desktops, iTunes, some kind of television device, CarPlay, Apple Pay, Apple Radio and Beats, iTunes, even the iBook store. If you think of Apple as only phones and tablets, you’re missing the obvious possibilities for the future.
I own five iPhones, two iPads, an Apple TV, two iMacs, and a MacBook Pro. I am not alone. Many Apple owners use multiple products, and I know there are many with way more than I have. Growth may slow if they don’t bring out new products, but it will be a LONG time before is stops.
Oh, if they don’t bring out new products. If you think of Apple as only phones and tablets, you’re missing the obvious possibilities for the future. I would bet the future holds a lot more things that aren’t so obvious. Only the BOD knows for sure.
You forgot the watch…..
Should a, could a, would a. This guys lips are moving, but he’s not saying anything.
This article is what you call “busy work.”
Sun: “I’m all caught-up, boss”
Editor: “I don’t care, you’re a writer, write something.”
It is the “Fool” after all 🙂
If my aunt had a cock she’d be my uncle.
I don’t know.
Another clueless Pundit lays an egg.
If that were literally the case, the result would have been much more useful.
Common FUD ….
I saw some article praising Google based on their interest in driver-cars, robotics and health research and they claimed that Google will hit it big by discovering some new stuff that will help billions of people on the planet and Google will be the biggest company in the world. Yet with Apple, the company might not last two more years without the iPhone. That’s how the anti-Apple bias works.
Can you imagine some fool predicting the future of a company ten years from now? Insane. I have seen so many companies disappear in just a few years as technology shifts. I worry about how long companies can last because there is always the chance of a World War which would throw everything into chaos. Apple has an awful lot of money tied up overseas, so it could get trapped over there during wartime. Other than that, Apple certainly can afford to diversify with that huge abundance of cash.
So he’s arguing that Apple should diversify its products? Say, like Sony, Hitachi, Pioneer, Panasonic, etc. Okay.
Let’s say Apple goes up another 1300% in the next 10 years (splits considered, of course). They’ll be able to buy their own country for manufacturing, produce their own weapons for defending it (actually, all they’ll need to do is to remotely disable the Apple products that the rest of the world will depend on).
I for one welcome our future Apple overlords.
It’s very difficult to make predictions, especially about the future…
I just knew someone was going to say that.
$445 a share!