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!
I am not very convinced to buy shares of Apple at this moment but certainly farther into the future because I think their sales will decrease. Why? Well, Christmas was just here, and that was probably a major contribution to their sales and revenue. However, the holiday is now over and their sales will definitely see a drop. Also, Apple has set the record high this quarter, and was probably good news to investors. However, they will have to work even harder for next quarter in order to beat or keep up with this amount. Investors will be harder to satisfy.
ReplyDeleteYou have a very great connection and reflection, and I agree that Apple share prices have increased but there are many other competitors in this industry as well, such as RIM (Research in Motion). Since there are so many other different companies in this industry, it makes people ponder about which company they should invest in so is it really a good time to invest in Apple right now? At the end of the year of 2010, BlackBerry sales were expected to tie with iPhone. BlackBerry's new Torch cell phone, a touch screen phone with a slide-out qwerty keyboard, was a huge success and there are many comparisons of the BlackBerry Torch with Apple's iPhone 4. Apple’s iPad is also having some competition. BlackBerry’s Playbook tablet was announced last year around September and is coming out early in 2011, therefore more people have already started to invest in RIM. There are also other companies that have produced similar products like the Samsung Galaxy Tab and the Dell Streak. Apple's iPad is the heaviest amongst all 4 products and consumers probably wish to bring these products everywhere since it's so convenient and compact but since the iPad is so heavy, people might not be interested in the iPad. Also, just like in the comment made by Jennifer, Christmas has just passed and it was a time for people to purchase gifts for their families and friends, hence their sales increased by a lot but their increase probably wont last.
ReplyDeleteI would not agree that Apple is a good long term investment due to them already being at their top game at the moment. Like Jennifer mentioned, “Apple has set the record high last quarter” and in my opinion this is mainly because of the grand success of the iPhone4. It is obviously relatively difficult to top something such as this in the future, especially with all the advanced technology and competition out there. However, I would say that investing in Apple as a short term investment for the next quarter would be a wise choice. As I have mentioned above, the iPhone4 has been a major success to Apple’s previous quarter and demand is currently still higher than supply. The long anticipated white iPhone4 is rumored to be released in the next month, therefore it is safe to assume that there would be much more sales in the nearby future.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteI don't think it is the ideal time for investing in Apple. Based on Apple's recent performance, they have done really well and met their record high. In my opinion, I think the new macbook pro is going to release during summer time. According to these informations, Apple is a really good company to invest because it has a really great potential. On the other hand, why would I disagree with that? By the time Apple met the highest record, Apple's CEO Steve Jobs also was taking an open-ended medical leave. He is the most important character in Apple. Do u think Apple can keep up with their successful performance without him? I have no idea with that. In my opinion, I think the stock price of Apple is going to drop. I am not saying Apple is going to collapse without Steve Jobs, but I think this might be a pretty big impact to Apple. However, I will wait a little bit longer for investment until Apple become stable.
ReplyDelete