Technology giant Apple (AAPL, Financial) is on a strong run. The company seems to be following a ‘No turning back’ strategy and this seems promising as the iPhone sale continues to ramp up, adding to Apple’s overall revenue. Further, with the growing traffic along Mac and App Store, Apple is set for better times ahead.
In line with this, Apple has also raised its guidance on which the investors can bet on. Besides all of the smooth flow Apple’s appetite seems to be unending. The technology giant is looking for more opportunities in other parts of the world where it still has to catch the market. India and China are among such regions and Apple is pleased to see solid response by the customers there. Let us find out what Apple is up to in these countries and what strategies it is undertaking to grow in these regions.
Second quarter financial performance
iPhones contribute the major portion of Apple’s revenue and once again in the second quarter solid iPhone sales led the company to post revenue of $58 billion which is more than $45.6 billion which it reported in the same quarter last year.
Tremendous sales also triggered its quarterly net profit to $13.6 billion which is also a great improvement as compared to $10.2 billion in the same period last year.
The key reason why investors are always after a high flying stock like Apple because of the consistent EPS performance. The company’s EPS has always grown adding good value to its shareholders’ wealth. As compared to the previous year’s same quarter Apple has shown a solid 40% growth in the EPS. This is attractive and will surely improve Apple’s market share in the upcoming quarter.
In the recently reported quarter the Apple’s cash flow from operations was also outstanding having posted $19.1 billion.
Key takeaways
Apple is a well-known name to us and which has impacted the technology market over the period. It has created a leading position in the market with its high end and top quality products which has attracted large customer base and is showing no signs of stopping. In fact Apple is looking for new opportunities and is aiming to reach the unreached by stretching its foot prints in those areas.
After creating a leading image in U.S market Apple is now targeting South East Asian countries where it sees tremendous growth opportunities. The economy in such countries is growing and has improved the purchasing power of the people and now as the standard of living is improving, Apple finds solid opportunities for its products in these countries.
India and China are among the most potential markets for Apple. People in these countries are now responding amazingly to Apple’s products. Apple has recently introduced the Apple Watch concept which is a success and Apple thinks that it will be a solid growth driver for its business in India in the upcoming years.
Moving on, the recent researches have revealed a solid growth along the global smartphone market. This is because people are rapidly turning to smartphone from traditional phones. Further according to researches, this smartphone growth traction is stronger in Asia more than North American and Europe.
Another important aspect which has attracted everyone attention is the upcoming IOS 9. Apple has an image of bringing new variants of iPhone in the market. In iPhone 6s and 6s plus the company mainly focused on the screen size. But with upcoming iPhone, Apple will also be updating its OS to IOS 9 platform. Apple faced certain limitations in the last iPhone versions and was forced to come out of many areas but new IOS 9 is expected to deliver more stability with less bugs.
This is not enough for Apple. It is also diversifying its business. Apple sees solid growth opportunities in the augmented reality (AR) and Virtual Reality (VR) markets. Apple is taking strategic initiatives to enter this market as well. Under this, it has recently acquired Metaio which has solid product pipeline in augmented market. With this effort, Apple’s growth is expected to be supported by strong portfolio of Metaio. Apple is working with the same on smartglasses products which are expected to be launched in the market by 2017.
Conclusion
Solid growth opportunities are surrounding Apple. Its entry in the augmented and virtual reality market is a strong move as these markets are expected to grow up to segments of $150 billion revenue by 2020. This is a solid long term opportunity. In addition, the popularity of iPhone and positive expectations for IOS 9 will also lead Apple to better profitability levels. So I would like to suggest the investors to definitely buy Apple Inc. now.
