Apple is a bad comparison because the near-death-experience in the 90s combined with its contrarian attitude has put it in on a very short leash with Wall Street. I mean, aside from its years in the desert Apple has performed as well and as consistently as any tech company over long stretches. And yet it's P/E is consistently a third of Google's or Sony's.
And it literally won the war. They take the lions share of profits in the personal computer market and they have a huge moat. You could argue they will be in trouble when personal computing devices stop changing so quickly and are fully commodified, but I can't imagine that's within the next two decades. Honestly I find it weird their P/E isn't higher.
Simple fact: Apple make the best and most profitable products in their categories. The iPod, the iPhone, the iPad and Macbook Air.
This strategy was probably chosen by Steve Jobs.
The 'best' part comes from the design team, under Jonathan Ive.
The 'most profitable' part comes from operations and sourcing, under Tim Cook.
They've nailed the mobile sector. They're starting to nail the computer market. People I know who have sworn by PCs for years are moving to Macs - why? They are the best designed laptops available, bar none. I'm holding Apple stock because they are the strongest company in a strong sector. Apple are going to take the profitable laptop market, the profitable music and video markets, and hang on to the profitable portable electronics markets. That's a massive market cap for them to usurp from Dell, Amazon, and Nokia/Samsung. Everyone else will be churning out cheap and cheerful low margin products.
Apple was never going to be anything other than a niche player in the personal computer marketplace, and they knew it all along. Why else would they commit so many resources to co-opting the personal music and cell phone markets? Apple has already won the wars of its choosing.
Sure, apple is incredibly successful. But the east india company was around for hundreds of years and could wage its own wars and had enormous. That wasn't their primary purpose, they just also waged war. Could you even begin to say the same about apple?
"Apple products are like a good classy restaurant or hotel chain. They take ingredients everyone has and put a lot of work into fit and finish, they make the customer feel special for a slightly higher price."[1]
And I stand by it. I'll go even further actually, I think Apple is one of the least innovative big companies. Look at all the big research labs at Microsoft, Yahoo, IBM or Google. Anyone who seriously follows this stuff knows a) Apple doesn't have a profile in the academic world and b) knows enough computer history to know Apple is claiming things invented decades ago.
I'm sorry but you missed the point about Apple which I mentioned. Basically, by Apple I mean a company that essentially creates a completely new industry. In their case, it was personal computers.
Apple was a few months from bankruptcy during most of the 90s competing with IBM and Microsoft, then turned around to become the most profitable company on the planet. It takes a leader and a plan and a lot of talent and the exact right conditions, but industry behemoths get pulled down from the top spot all the time.
It's a surprising article from Ars. Apple is a massively successful and profitable company. They don't need to commoditise OSX. They're not trying to compete on market share. They're trying make money by making better computers. Something they are doing very well thank you very much.
You know, I'm sure Jobs did good. But I think a lot of it was timing.
Apple's thing is all-in-one machines that are sexy. Always has been. Phones, MP3s players, maybe TVs & that whole market really moved towards Apple's pre-existing strategies. The 90s were about being able to afford to put a computer on each desk. They were never as good at that.
Of course, now that they lost that war, they have an awesome prize. They are the most profitable computer maker today.
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