It has been a successful run for this iPhone maker as of yet. With sales running all time high and products selling like hotcakes within consumer markets worldwide, experts forecast that Apple Inc. (AAPL, Financial) this year would probably register a 19.95% hike in its annual earnings over the last year. The financial experts also believe that earnings of Apple Inc. are further expected to grow at an average of 13% annually over the next five years. So let take a dig at the details of this positive market vibe.
Apple – The Pie till now
Analysts from NASDAQ are of the opinion that Apple Inc. wouldn’t disappoint its shareholders as its market capitalization which already crossed $700 billion mark last year is expected to go further strong for this year, as well. With all credits to its Macs, iPhones and iPads the company has been able to anchor itself firmly on the numero-uno spot easily overpowering its close market competitor Microsoft (MSFT, Financial).
Apple Inc. sold a total of 5.52 million Macs, 12.32 million iPads and 39.27 million iPhones till the fourth fiscal quarter ending in September last year. Where interestingly, MacBooks celebrating their 30th anniversary fetched highest market revenue of $6.625 billion even surpassing the earnings of company’s flagship iPads at $5.316 billion.
The growth of this multinational corporation has been overwhelming over the last few years with its high end personal computers and computer softwares spearheading its sales quotient among markets worldwide. Another major reason which has played a major part in hiking overall sales of Apple goods, specially the Macintosh is providing free updates of their operating system. Also the introduction of Apple’s innovative MacBook Air design in the same category at a lower price too garnered a complete new line of customers for this Cupertino, California based technology giant.
Marvelous designs, new applications and exclusive ‘continuity feature’ has helped Apple Inc. keep its sales and market share way ahead of Microsoft and Google (GOOG, Financial). Its net sales too have gradually risen over the years from $65,225 billion (2010) to $170,910 billion (2013). Steady demand in US and Western European markets too has helped Apple keep the numbers rolling on the revenue board.
Areas of Improvement
Although its configurations are amazing for customers in major consumer markets worldwide but still there is a major hindrance which is hugely impacting the sales of Apple’s key product, the Mac. The factor being its ‘price’ consumers are still trying hard to make up their minds to go for a Mac or a Windows based notebook which is available at comparatively lesser price in the market.
In fact, even after price cuts in two of its models last year Apple Inc. was unable to tackle the price factor compared with Microsoft Windows notebook which still remained almost three times higher than the latter in market cap.
But, for Apple it is said that if you have perhaps used any of its products from iPhones, iPads, iMacs or even iPods you would surely go for another one without considering the price factor much. Company too acknowledges this fact nicely and that is the reason why its brand continuity features gives one a facility to easily switch between an iPhone and iMac during work. For example, a user can initiate a video call on his iPhone and then conclude it further conveniently on his MacBook. Experts say that massive sale of iPhones over last few years has helped increase the number of Mac users as well.
Talking of the earnings forecast about the company there’s nothing much to worry about, apart from competition from Microsoft and other computer giants who are also planning and revamping their lineage for the days to come. Working diligently over price factors as well as technical specifications to gain a sizable proportion of Mac customers worldwide, Apple certainly needs to be more watchful ahead.
Our Take
Although, price cuts and zero-charge for updating a Mac OS X operating system seems to be working perfectly for the company now but still there is enough room for further innovation and improvisation in the R&D department of Apple Inc. As, the sales revenue which has been forecasted to grow this year at 19.95% over the last year has been estimated based on the expectation that the company will manage to retain its product sales rate achieved last year plus successfully add new customers in its kitty for year 2015, as well. So let us wait and watch how Apple pans out its moves against market expectations.
