Success in my Habit
Showing posts with label APPLE. Show all posts
Showing posts with label APPLE. Show all posts
Wednesday, December 14, 2011
Apple and Google dominate smartphone space while others scramble
Google’s Android platform and Apple’s iOS dominated the U.S. smartphone space in 2011 while a number of companies that helped shape the market as we know it were forced to reboot. Market research firm The NPD Group on Tuesday issued a report on the smartphone market through October 2011, stating that Android and iOS extended their lead while companies like RIM and Microsoft scrambled to reform their respective strategies. Google’s Android platform represented 53% of the U.S. smartphone market through October in 2011 and Apple’s share grew to 29%. RIM’s market share with the BlackBerry OS dropped to 11% and Microsoft’s Windows Phone continued to struggle out of the gate with less than 2% of the market.
Monday, August 15, 2011
Why Apple just might be the first $1 trillion co
Could Apple be worth $1 trillion? It's conceivable. The $342 billion iPhone and iPad maker became -- if only briefly -- the most valuable company in the United States when it surpassedExxon Mobil on August 9.
Yet its sales have been surging 80 per cent a year, and profit faster. And Apple trades roughly in line with the growing US market -- and at less than half the price-to-earnings multiple it fetched in 2006, when revenue growth was much slower.
Apple now trades at about 11 times estimated earnings for the fiscal year ending September 2012. The S&P 500 index is valued at about 10 times next year's earnings. But Apple's sales growth is not far off 10 times faster than that of the average company. The gadget producer also sits on $76 billion of cash and investments.
To get at this dissonance another way, consider Apple's PEG ratio. This hints at the price of growth by dividing a company's PE ratio by its projected percentage earnings growth. A smaller figure suggests a company is cheaper. Apple's is 0.2.
That's low compared to growth darlings. Burrito purveyor Chipotle Mexican Grill, for instance, comes in at 2.1, and Salesforce.com at 13.2. Pandora and LinkedIn aren't even expected to make money.
Alternatively, put Apple on the same PE multiple it traded on in 2006, and it would be worth almost $900 billion. A premium for today's faster growth could get it to $1 trillion. Apple can't be so cheap just because Steve Jobs is in precarious health.
True, Apple already sells more per quarter than it did in all of fiscal 2007, and it takes more and more success to move the needle. Growth could easily slow. Yet the smartphone and tablet markets are young, the company's customers show remarkable fidelity, and areas such as television are ripe for new gadgets. Moreover, Apple's return on equity is almost twice what it was in 2006, suggesting it has pricing power.
Maybe investors simply can't fathom so large a company. A $1 trillion Apple would mean adding all of Microsoft, Google, Intel and Amazon -- and more -- to the firm's current market capitalization. Perhaps Apple is correctly priced, the market too expensive, and growth stocks grotesquely so. But something doesn't add up. In relative terms, Apple should be worth far more.
Apple's market capitalization was $341.5 billion in midday trading on August 9. Exxon Mobil had a value of $341.4 billion.
In the last quarter, the firm's sales grew 82 per cent and earnings increased 125 per cent from the same period a year ago
Yet its sales have been surging 80 per cent a year, and profit faster. And Apple trades roughly in line with the growing US market -- and at less than half the price-to-earnings multiple it fetched in 2006, when revenue growth was much slower.
Apple now trades at about 11 times estimated earnings for the fiscal year ending September 2012. The S&P 500 index is valued at about 10 times next year's earnings. But Apple's sales growth is not far off 10 times faster than that of the average company. The gadget producer also sits on $76 billion of cash and investments.
To get at this dissonance another way, consider Apple's PEG ratio. This hints at the price of growth by dividing a company's PE ratio by its projected percentage earnings growth. A smaller figure suggests a company is cheaper. Apple's is 0.2.
That's low compared to growth darlings. Burrito purveyor Chipotle Mexican Grill, for instance, comes in at 2.1, and Salesforce.com at 13.2. Pandora and LinkedIn aren't even expected to make money.
Alternatively, put Apple on the same PE multiple it traded on in 2006, and it would be worth almost $900 billion. A premium for today's faster growth could get it to $1 trillion. Apple can't be so cheap just because Steve Jobs is in precarious health.
True, Apple already sells more per quarter than it did in all of fiscal 2007, and it takes more and more success to move the needle. Growth could easily slow. Yet the smartphone and tablet markets are young, the company's customers show remarkable fidelity, and areas such as television are ripe for new gadgets. Moreover, Apple's return on equity is almost twice what it was in 2006, suggesting it has pricing power.
Maybe investors simply can't fathom so large a company. A $1 trillion Apple would mean adding all of Microsoft, Google, Intel and Amazon -- and more -- to the firm's current market capitalization. Perhaps Apple is correctly priced, the market too expensive, and growth stocks grotesquely so. But something doesn't add up. In relative terms, Apple should be worth far more.
Apple's market capitalization was $341.5 billion in midday trading on August 9. Exxon Mobil had a value of $341.4 billion.
In the last quarter, the firm's sales grew 82 per cent and earnings increased 125 per cent from the same period a year ago
Subscribe to:
Posts (Atom)