Tuesday, October 22, 2013

Apple delivers

Today Apple announced a very impressive array of new software and hardware. Apple's hardware products are now state-of-the-art across the board, with new and faster processors, retina displays, lighter weight, and refined design. Apple now produces the best smartphones, tablets, laptops, desktops, and professional workstations in the world, at least in my humble opinion. At the same time, Apple has refreshed its entire software lineup, and taken the bold step of making all the new software free and accessible to just about everyone with an Apple device.

Perhaps most impressive of all is the enhanced integration of all the new Apple products and Apple software. It's an ecosystem consisting of 1 million apps for iPhones and iPads, plus Apple productivity software—movie and photo editing, word processing and document creation, spreadsheets, presentations, and music creation, all working together via the cloud and across all devices—that no competitor can come even close to matching.

We're still waiting for the Next Big Thing from Apple, whatever it may be, but in the meantime Apple has made giant strides on the software and hardware front. It's the breadth and depth of Apple's offerings, their quality and attention to detail, all combined with their virtually seamless integration, that is the true innovation that was on display today.

I just don't see the bearish case for this incredible company that is trading today with a PE of 13 (make that 10.5-11 if Apple were to repatriate its foreign profits and distribute the resulting after-tax cash).

Full disclosure: I am long AAPL at the time of this writing.


McKibbinUSA said...

Apple is a great company -- an example for the rest of America to emulate -- one of the primary reasons Apple is succeeding is that the firm concentrates its resources on investing in innovation, and drastically reduces its labor costs by manufacturing all of its electronics consumer products (100%) overseas in Asia -- at this point, the US manufactures no (zero, none, zip) consumer electronics in the US, which means most of the profits for firms such as Apple remain in overseas accounts -- Apple's financial brilliance is beacon for manufacturers throughout the US -- Apple is a winning firm, no doubt -- oh, and Apple needs to start paying me record-breaking dividends given all the money its earning for its shareholders (which includes me).

PS: Follow the link below to learn about Apple's manufacturing subsidiary in China:


McKibbinUSA said...

PPS: I am just wondering how much dividends might go up if the US were to outsource manufacturing of the F-35 to China -- we need to replicate Apple's success throughout the US economy -- and the sooner the better -- let's face it, high quality manufacturing labor is only worth about $18/day by world standards -- hammering down working wages in America will continue over the balance of the 21st century in order to regress labor costs to global norms -- nothing can stop that trend at this point -- nothing at all...

Benjamin Cole said...

Grannis has been long on Apply for a long time---great call.

What a company.

I am worried about a company building a spanking brand new HQ bigger than the Pentagon...

William said...

Hubris often is a problem - like a country erecting the tallest building in the world often leads to a major bear market.