COMPANY DESCRIPTION

Apple designs consumer electronic devices, including PCs (Mac), tablets (iPad), phones (iPhone), and portable music players (iPod). Apple's products run internally developed software, and this integration of hardware and software often allows the firm to maintain premium pricing for its devices. Apple's products are distributed online as well as through company-owned stores and third-party retailers.

 

ECONOMIC MOAT

In our opinion, Apple's economic moat is evidenced by its well-branded with loyal customers.  The IOS ecosystem creates switching costs and helps keeps customers engaged.

 

OUTLOOK

Fiscal 2015 (ends September 26th) is shaping up to be an excellent year for Apple. The tech giant got off to a fast start this year.  What's more, there's little to suggest that the earnings momentum will let up, given the strength of the iPhone franchise, which appears to have reasserted its dominance in the smartphone space. Apple's watch and Apple pay also offer promise.

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STRENGTHS

  • Formidable competitive advantages through horizontal and vertical integration

  • High average selling prices (ASPs) in an industry characterized by declining ASPs

  • Significant growth rates and cash flows

WEAKNESSES

  • High dependence on iPhone and iPad product lines

OPPORTUNITIES

  • Apple Pay provides robust growthopportunity

  • Rising adoption of Apple products in the enterprise market

  • Smart wearable devices market offers robust growth opportunities

  • Positive outlook for smartphone and tablet markets

THREATS

  • Operating in complex and challenging environment could impact market position

  • Premium pricing could limit growth in emerging markets

  • Smartphone subsidy cuts could impact shipments

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  

 

The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.

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