http://www.marketwatch.com/story/apple-shares-rise-on-strong-results-2011-01-19?reflink=MW_news_stmp
Summary:
With the recent release of the iPhone4 and the iPad, demand for apple products have remained as high as ever. As a result, Apple share prices have recently skyrocketed. On January 18, 2011; Apple has reported an astonishing 78% surge in income for their December quarter. Apple probably benefited from the trend of increased sales during the hectic holiday season as many people rushed to purchase Apple products for their loved ones. Nevertheless, a 78% growth in net income for any company is significant. Apple does not show signs of slowing down and remains a great investment opportunity for the future.
Connections:
My article relates to Chapter 3 in the text as it is connected to the concepts of net income and by extension retained earnings. Net income is calculated from subtracting the total expenses from the total revenues. The net income generated by the company is than transferred to the retained earnings account and is divided and distributed to investors in the form of dividends. Apple is able to generate large amounts of income as they dominate the MP3, cell phone, and tablet computer markets. It cost just about the same to produce an apple product compared to how much it cost to produce a similar product of a different brand. However, people are willing to pay perhaps four times as much to get an Apple product. Why? It is seen as “cool” to be in the possession of Apple merchandise today.
Reflection:
I believe it is the ideal time for investors to invest in Apple. Normally the saying is buy low, sell high. Apple shares are currently trading for approximately $332 a piece. For the most part, it is frowned upon to buy into a company when the stock prices are already so high but I will make an exception for Apple. Big as Apple already is, the company just does not show any sign of slowing down. Apple is a big company with even bigger potential. With each new product launch, hundreds of people line up all night in an attempt to purchase the new product. The popularity of Apple products will not die down anytime soon. iPods, iPhones, and even the controversial iPad dominate their respective markets. The growth of this company will continue well into the future. The numbers speak for themselves. Ladies and gentlemen, it is time to invest in Apple!
