Apple Investors Nix the VIX
Apple is in a very nice position to deflect the wrath that has succumbed so many other companies. And why is that? Well it comes down to the magic triad; lots of cash, zero debt, and growing demand for its products. The only thing Apple doesn’t have going for it is dividends. But Apple more than makes up for that through strong, sustained growth and fanatical demand for its products.
Just look at what’s happening to all the other computer manufacturers, cell phone manufacturers, and software vendors. Unless they’re associated with the Mac and iPhone, they’re in the dumpster. While their growth is falling off a cliff, Apple’s is accelerating at geometric proportions. In 2002 Apple grossed just shy of $6 billion. This most recent fiscal quarter (Q4) Apple grossed $11,682, according to Andy Zaky at the Bullish Cross.
If Apple continue this growth pattern, in the next 5 years, Apple will take over Microsoft in terms of revenue. I don’t know if Apple will ever take over in terms of user base. But that’s Ok. Apple doesn’t want to sell to everyone, because not everyone appreciates the Apple way. If you don’t see the benefit of owning an Apple product, then Apple doesn’t want you as a customer.
So, the title of this post refers to the VIX or the Volatility Index, also called the Fear Index. And what I’m trying to infer is that Apple has no fear. The evidence is their latest release of the MacBook line. I criticized Apple for not coming through with lower price points. I was really expecting a new sub $1,000 notebook. But now I see the wisdom in not producing such a product. I also see their wisdom in not producing a Mac Nano, or $500 mac. As Steve Jobs said:
“There are some customers which we chose not to serve,” he added. “We don’t know how to make a $500 computer that’s not a piece of junk, and our DNA will not let us ship that. But we can continue to deliver greater and greater value to those customers that we choose to serve. And there’s a lot of them.”
Apple knows what type of customer and they want to sell to, they’re not looking to expand the price points and feature sets of their product base to increase market share. No, Apple keeps making the same type of products with the same level of quality and utility. And here’s the kicker, they are creating new customers by enlightening them to the Apple way.
Apple has no fear, even in the face of what possibly is the worst economic environment one could possibly imagine for a premium product company. And you know what? They’re succeeding. I love this company!
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October 26, 2008 at 7:51 pm
[...] Apple news by Zach Bass [...]