Is It Really Time to Abandon Apple?

Renia is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Anybody who has knowledge in the nuts and bolts of the stock market can attest that 2012 was a gripping year for Apple (NASDAQ: AAPL). Investors were pessimistic that it could still continue to create products that would hold the interest of the market and sustain its growth and dominance in the technological realm. But in the midst of all the faithlessness of investors and all the ebbs and flows it had to go through throughout the year, Apple managed to start 2012 with stock near $400 and finish at $532.17, which was equivalent to a 30.6% gain. With decisions hinged on market fundamentals, investors have remained cynical about investing in Apple. But reality is, what investors know is just the tip of the iceberg. What is of the essence lies beneath, and that is what only analysts could tell.

Why Google is no threat even now

Contrary to what investors think, analysts project that 2013 will be another good year for Apple. Sales and revenues are expected to increase by up to 25% as it introduces products that will keep its market intact. While the Google (NASDAQ: GOOG) Android operating system provides a potent platform to cellular phone manufacturers, its application development is still plodding behind Apple. Clashing focuses make a huge difference. As Google concentrates on cashing in on search on mobile phones, waiting for the market to shift their internet usage from computers to mobile devices would take quite a while, and so would revenue generation. But it is a totally different story for Apple. Apple has the capacity to generate revenues continually because of its strong phone and tablet sales throughout the world. Its cash and marketeable securities now amount to $39 billion, more than enough to take account of its key acquisitions in the future. On top of that, Q4 of 2012 closed with Apple revenue hitting the roof at $54.5 billion, way too far from Google with only $14.5 billion.   

Microsoft still not enough even with China combined

When Microsoft (NASDAQ: MSFT) entered into a partnership with mobile technology giant Nokia and planned to penetrate the Asian market as part of its strategy, investors flocked into the operating systems maker. Competition heightened when it partnered with China Mobile, where Microsoft earned exclusive distribution rights for Lumia 920. Given that, it was clear that Microsoft was attempting to barge into the mobile market and compete against the industry giant. But Microsoft holding the Chinese market is pretty less of a threat for Apple. Apple currently holds over 700 million customers around the world and produces smartphones with high worldwide sales shoring it up. Even Microsoft has not come up with a technology that can equal the mania surrounding the phones and tablets of Apple. And considering its healthy margins, it seems that even if Apple’s share of the market plummets anytime in the near future, there is still the considerable profit from its international smartphone sales to back it up.

Steadily gaining its pace

It takes a deeper look beyond the fundamentals for investors to make a sound investment decision. The challenge to cynical investors lies in their ability to be in for the long haul and to pore over the other side of the coin. Apple has had its own share of ups and downs in 2012, but it is pretty interesting that it has been able to remain one step ahead of the game. It is also notable that the currently stabilizing economies promise Apple’s incremental strength this 2013. With a new iPhone rumoured to come out in the market by the mid of this year, Apple is braced to even build up its strength in emerging markets and boost its sales. Microsoft and Google have got to introduce their own kind of “in-thing” first to keep pace.


ReniaBula has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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