It is no secret to any reader of this blog that I love a certain tech company. I have done for nearly 9 years now. But I've never mentioned the following:
In 2002 (at the age of 14!!! I must be khoja), I was somewhat interested in stocks and shares and stuff. I kept on going on about this, and about Apple to my dad, and he made me an offer, which he thought would be educational. He would allow me to buy £500 worth of Apple shares. I declined then, and for various reasons, it does look like I made the right choice. Except for one thing. In 2002, Apple shares were trading at $15. As of yesterday, they were trading at $350 (LINK). Had I taken the risk, I would be sitting on £11k right now, and my dad's educational offer would probably have ended up teaching me the opposite lesson to the one he wanted me to learn.
I only mention this now, because of one fact that has just hit me. At $350/share, Apple is still cheap. I will say that again: at $350/share, Apple is still cheap (never mind that I can't even afford half a share right now). They have built a monolithic machine that is firing on all cylinders right now, but it has been done so incrementally, so you need to look back at the last 10 years to see all the pieces of the puzzle.
- From as long as the company has existed, there has always been an emphasis on quality hardware. The use of aluminium, glass, stainless steel, and polycarbonate plastics give a superior ergonomic experience to other devices, and an innovation in manufacturing processes in recent years, especially the unibody aluminium frame for the macbook range, has allowed them to produce exceptionally light, yet structurally rigid devices. A transition from IBM chips to Intel chips in 2005/6 allowed them to catch up in terms of computing power, and minimalistically themed designs means their devices *always* look good. Even the little things, like how the power adaptor magnetically attaches and cleanly detaches if it gets caught, or how all the ports are just lined down one side, show that every little detail has had some thought go into it.
- In 2001, they revamped their computer operating system, and have subsequently improved it with six major updates in 7 years. An eighth update is on the way, slated for release this summer. Combined with the hardware side, this sets the gold standard for personal computing. Making your own hardware, operating system, and software is a risky choice, but it has paid off handsomely for Apple. That their computers can run Windows (shudders) if you really, really need to, and are good citizens in Windows dominated environments is a tempting insurance policy for those not yet ready to take the plunge. And it's working. For the past 4-5 years, they have outperformed the PC market, and yet still more than half of their sales come to people who have never used a Mac before.
- In 2001, they branched out from the computer business, and started to make iPods. They went after, and won, the top end of the market, then the mid-range, with the iPod mini and nano, and eventually, the low range, with the shuffle. The companion software, iTunes, has grown over the years to include not only music, but movies both to rent and buy, podcasts, and a huge selection of free video and audio from the world's top universities. Both iPods and iTunes are market leaders in their categories.
- 2007 saw the launch of the iPhone. This was a revolution. Just go back to 2006 and see how "smart" phones at the time handled email, internet, contacts, etc. Subsequent updates and iterations have brought 3G, GPS, an App Store, a best-in-class screen, and built in video-calling that requires absolutely no set-up and configuration. Also a result of engineering the iPhone was the iPod Touch, with pretty much the same features, the same robust OS, iteratively improved, save for the GSM/3G radios and GPS. And a result of the widespread adoption of these? An App Store that developers develop for first, which has had billions of software downloads. The iPod Touch and the App Store are market leaders in their categories, and the iPhone has something like 4% of the market share, but if we look at the segment for high end phones, it is the leader.
In 2010, they released the iPad, and kick-started the tablet market after various high profile failures by other companies. It looks like people really do like using their fingers on a big screen. You know it's a hit when their competitors scramble to release half-ready stuff to the market to compete. Already, within a year, it has made more money for Apple than their traditional mac business.
What am I leaving out? iLife, Apple TV, iWork, MobileMe, how Apple were within a few days of dying in 1996, and a few other things. But if you really want to know, you'll find out ;)
Simply, it comes down to this: Apple has four major hardware sections. The Mac, the iPod, the iPhone, and the iPad. And all are doing extraordinarily well. And the company has shown that it's not going to rest on it's laurels. So the exceptional performance will continue.
Soon they will hit $400, 450, 500 per share. Get them now.
6 years ago
Hayhaat min Seth Godwin's influence!
ReplyDelete(but since you are their top marketer, where can I get an apple at a 3rd world price? )
At 14.. you were thinking shares? Remind us again why you are not in a corner office in Silicon valley? Oh right. You did not listen to dad. You know what they say, 'Asie sikia la mkuu... loses out on gold mine investments' or something like that.