12 July, 2007

Thoughts on Apple Inc.

Apple's (AAPL) foundation of software is the driving point within all their products. Not to take anything away from the hardware, because Apple does design some of the best. However that is a smaller issue when you look at the company's successes.

With apple being able to customize everything within a given device due to native software fitting in native hardware, it certainly puts other companies behind from day 1. It would be very hard for a Verizon or a Sprint to come up with something like an OSX for their handsets, and just the same it'll be as difficult for Motorola or Nokia. On the flip-side Microsoft has Windows Mobile but it's designed to work on such a vast array of devices that it works very well on only a few.

The new OS X core of Apple's product lineup (upcoming Leopard Macs, iPhone, AppleTV and soon iPods) bring with it that level of functionality and ease of use that can only happen when a piece of software is designed to work with a piece of hardware. The iPod's success came from it's ease of use and the iPhone is, and will (through software updates) strike(ing) the exact same cord. This will in turn extend to a larger halo effect which will in turn drive more users towards the Mac platform.

Which, in the investment mind frame should launch Apple's future valuation to $150B and beyond.

Disclosure: Author is long AAPL


DannyO said...

Good insight into Apple's core business. I'm long the stock and hope we see a market cap of $150 billion

Chris Krasowski said...

A Google groups discussion within which I gave my insights into Apple's growth and EPS numbers for the next year