Apple and finance: Trillion dollar companies and Q2 earnings

I’ve never met Brian White, but I still hold him as one of the boldest human beings on earth. Brian White is an analyst at Topeka Capital Markets, and on Monday, Brian tipped Apple to become the first trillion dollar company in history. Clearly, this guy isn’t mucking around, AAPL currently sits at $629.32, so the time allotted to Apple to accomplish this extraordinary task… 12 months.

To put that into perspective, White is backing Apple to increase its stock by 62%, over a period that will probably only see one new iPhone released. That’s an incredible statement to make, but he didn’t just pull these numbers out of the sky, when you look at Apple right now, there’s some pretty sound logic to it. In his report White says “Apple fever is spreading like wildfire”. Someone should probably patent “Apple fever”, after all, none of us know how the tech market is going to develop over the next decade;

“What’s that?”

“Oh, it’s my new Apple Fever, it’s what all the kids are using nowadays”

Anyway… Apple’s financial success up until now can be attributed to a few things. I read one interesting idea over at iPhone Life. Most companies try to offer consumers tech at the lowest prices, sacrificing on their profit margin in exchange for higher sale numbers. This tech runs well for a year, and then it starts to lag behind awfully, forcing you to shell out more money for an upgrade. Most conspiracy theorists will tell you that your television set is designed to break after a few years, forcing you to buy a new one, it’s the same principle. Apple on the other hand, charges premium prices, for tech that is future proof. A prime example of this is the iPhone 3GS, which can run the latest iOS no problem, and can still keep up with many of today’s phones. People are willing to push the boat out on price if it means that they can use technology that’s not going to be obsolete in 6 months.

The second theory I saw noted how Apple turns technology into art. Step forward, the Retina display. Does the Retina display make your phone run faster, or increase its technological prowess? No, it’s pretty to look at. When Steve Jobs came back to Apple in ’97, his focus was “industrial design”. Redesigning products that were already on the market to make them better.

An Apple TV is key in Brian White’s predictions

Apple has found a sure fire strategy when it comes to financial success. But back to that Apple fever, what exactly is the reasoning behind White’s mammoth predictions.

  1. The next iPhone – As a fan of Apple I don’t like to admit this, but regardless of what the next iPhone actually is, it will be announced; then released; then, it will sell beyond all predictions for no apparent reason. It’s just the way it goes. However, there’s also a chance that the next iPhone is a huge leap forward, it’s pretty much guaranteed to have 4G capabilities, and if it is innovative, that will only push those already huge sale figures further into the stratosphere.
  2. China Mobile LTD – Apple is working on a deal with China’s largest mobile network, who will hopefully begin carrying the iPhone this year, exposing Apple to millions of eager customers and their dollars.
  3. Tim Cook – Towards the end of his life, questions over Steve Jobs’ health also raised questions over Apple, and the stock began to falter a little. Now that it’s clear that Tim Cook is running a tight ship (or a tight ship is running him depending on what you think of him) people’s mind are now at rest over Apple’s leadership.
  4. Small market share – In the midst of all the success, we often forget that in most industries, like the phone and computer industries, Apple holds a very small portion, which means there’s a lot of room for growth. New innovations will mean that Apple will continue growing within these industries rather than stagnating.
  5. Apple TV – These predictions do count on Apple releasing some kind of television set that will bring in around $100 billion, that may or may not come back to haunt Mr White.

Apple will announce their Q2 earnings on April 24 (Tuesday), and this will show us just how well Apple’s new iPad has done, as well as the new Apple TV and the latest earnings for Mac and the iPhone. It’ll be a really nice snapshot of Apple’s finance, and it should provide some fair guidance as to where Apple are headed. Until then, what would you like to see from Apple in the next 12 months? A new service? A new device? New software, or a change to something already here? Let me know in the comments below or on Twitter, be sure to follow me for all the latest Apple news, reviews and rumors.

Via: iPhone Life

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  • Here’s what I do believe will happen. Apple will keep reinventing their phone until no other company will be able to keep up.for a mobile freak Apple is the answer.waiting for Iphone5.