Apple’s holiday 2014: A bigger castle and a deeper moat

“Apple officially closed its holiday quarter last Saturday (December 27th) and by all accounts, it will be a blockbuster quarter when the company reports its operating results after the market closes on January 27th,” Matt Lew writes for Seeking Alpha. “The company has been the beneficiary of a tremendous tailwind after it announced its revamped iPhone lineup in early September with the larger-screen iPhone 6 and iPhone 6+ [sic].”

“Additionally, AAPL unveiled its long awaited entry into the ‘wearables’ category with Apple Watch and its new payments platform, Apple Pay – a solution that combines NFC and TouchID with a device’s secure enclave,” Lew writes. “I fully expect AAPL to post revenue that exceeds $70 billion, which is mind-boggling when put in perspective. Just five years ago (fiscal 2010), AAPL posted revenue of $65 billion – for the entire year.”

“Additionally, the iPhone is a gateway to AAPL’s sticky ecosystem – think Apple Pay, the App Store, iMessage, iTunes and a host of other services that users have grown accustomed to and more importantly, dependent on,” Lew writes. “The biggest testament to this ecosystem is the massive upgrade cycles that has made the iPhone the most lucrative annuity in the world.”

Read more in the full article here.

Related article:
Apple to report Q115 earnings on January 27th – January 5, 2015


  1. Lew writes. “I fully expect AAPL to post revenue that exceeds $70 billion, which is mind-boggling when put in perspective. Just five years ago (fiscal 2010), AAPL posted revenue of $65 billion – for the entire year.”

    and yet we still see the the bears punishing AAPL though this moment……,go figure

    1. You have to realize Wall Street isn’t interested in Apple no matter how much money they actually earn. Wall Street is only interested in growth companies where they can put in a little and get out a lot. A company that earns $2 billion a year and has a chance of doubling that next year is more interesting to Wall Street than Apple having a $70 billion quarter. Apple growing 15% in revenue is nothing to greedy Wall Street investors. They spit at that small amount of growth. Their attitude about Apple is really, really stupid because Wall Street is being run by crooks and gamblers who have little interest in the companies they invest in.

      Apple by far is the most valuable company on Wall Street but the company is treated like crap. Do you realize that Intel’s share price growth exceeded Apple’s for the last 52 weeks with a better P/E and higher institutional ownership than Apple? And you’ll never hear about Intel being doomed even with the ARM onslaught in full swing. How’s that for respect.

      1. Growth is a key factor, and P/E is supposed to be associated with growth prospects (thus the PEG metric for evaluating stocks). Investors have been concerned for years that Apple is too big to grow quickly (so-called “Law of Large Numbers”). I believe that Apple is finally reaching a size at which that is true, despite its enviable reputation. Barring an incredible new product line, Apple cannot grow revenues and profits at 50% or more YoY, as occurred during the first several years of the iPhone. Apple has become a more mature and established blue chip type of company, and that is fine by me. AAPL is gradually transitioning to an income investor play, rather than a growth play.

        1. I totally agree though my one point is around macnificentseven48’s comments which don’t quite add up. This also reflects upon Microsoft which has been a mature stock for years. The point is that Apple does seem to be judged by different rules than other ‘mature’ big stocks. On what basis is intel out growing Apple for example on share price for example considering their relative positions. And how the hell did/indeed still does to a degree demand more respect from Wall Street in terms of value than Apple, mature stock or otherwise. One would have thought that even Crooks and Gamblers might be inconsistent with everyone. I can presume that Apple is perceived still as a ‘fashion’ stock that is just waiting to go out of it.

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