Apple is feeling a little rotten today. The company did not report good numbers and warned Wall Street that the numbers looking forward will go down, instead of up. Their sales are in decline and people on Wall Street are talking smack trashing the company.
Will Apple be a good investment going forward?
The reality? Let me put it to you this way. Have you ever heard of a company called Microsoft? Microsoft used to be the Apple of its day. Today, however, Microsoft has gone from being a feared and respected giant to a company that’s looked at an ‘also ran.’ All these years later, nobody talks about Microsoft, but they’re still around and unbelievably profitable with massive amounts of money on hand.
So Apple *may* have reached a peak — and I have to stress *may* — but as far as people writing premature obituaries for Apple? Give it a rest!
Apple has built a massive ecosystem where their stuff all works together. My daughters and wife use iPhones, so I see how the ecosystem works firsthand. Apple is all about creating a closed and controlled environment that once people get inside, they remain committed to it.
So Apple will still remain very profitable, despite the lack of great ideas since Steve Jobs died. Everything since the iPhone has been evolutionary, not revolutionary. But so what? They have more cash on hand than most countries in the world! That’s nearly a quarter trillion dollars just sitting around.
Google’s Android system controls nearly 85% of the cellular market in the world. Apple has 12% for the iPhone. But even though Android is so dominant, Apple remains profitable.
Apple is the most widely held stock in America. Even people who don’t own any other stocks own Apple. But don’t own Apple going forward looking for the stock values to reach the stratosphere. At this point, it’s a good holding to have in your portfolio without the company ever having to hit another homerun like the iPhone ever again.
Ultimately, the future belongs to companies who learn how to adapt to marketplace. The adaptable companies today are Google, Facebook and Amazon, just as they were once Microsoft and Apple. Taken together, these five companies contribute enormously to the economy, to job creation and to bettering our lives. They can innovate their way into our lives with products we didn’t even know we needed until they exist.
It’s the innovation that matters!
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