Apple and the View for Investors

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What’s Going on at Apple?

One of the most respected companies in the technology sector is undoubtedly Apple Inc. (AAPL). Apple continues to enthrall users of technology with innovative products, features, and software. Their marketing and promotional efforts are unmatched in the marketplace geared to repeatedly keep potential customers salivating for the next model or version long before it hits the streets. This testament to their techniques is repeated over and over with lines of consumers surrounding retail stores anxious to become the proud owners of the newest computer, iPhone, iPad, or Apple watch.

Just this week Apple announced the availability date for the new iPhone 6s and iPhone 6s Plus. MarketWatch reported they will be packaged with new features, colors, and upgrades that will attract technology lovers like a moth to a flame. The iPhone 6s models are generating the excitement that has accompanied the release of many other Apple products in recent years.

USA Today expanded on the products Apple is still working on or has in the works, although little information has been forthcoming from the company:

  • Apple Watch – sales figures are not available from Apple for their foray into the smartwatch market, leaving analysts pondering what the financial success of that product has been. Apple continues to offer additional apps and functionality to the product so the verdict for the long-term has definite potential.
  • Apple Music – there are multiple competitors in this market making it questionable how many consumers will turn loose of a monthly fee to continue their access to this service.
  • Apple Pay – will consumers and retailers embrace the ability to pay for purchases through their phones, tablets, or watches? Here again there is stiff competition from the likes of Google and Samsung.
  • Self-driving automobiles – Google has been publicizing their efforts in developing this future technology, but recent documents obtained by the British paper The Guardian indicate Apple is working on their version of this capability as well. When and how this will materialize are anyone’s guess at this point, though there are hints of a 2019 introduction.

What About Apple Investments?

Apple has for quite some time been the primary investment target for many investors, especially for those geared toward technology stocks. Recent slowdowns in China’s economy have taken their toll on Apple investors though. Chinese consumers have been viewed by Apple as a considerable market for iPhones and other technology products but a slowdown has shown to have significant impact on consumer spending.

Results from the lagging Chinese economy and the fact that most consumers in developed countries already have smartphones puts a definite crimp in sales and the stock reaction has reflected that in no uncertain terms. Apple shares have dropped in recent weeks to the extent that their earlier gains this year have been nearly wiped out initiating selloffs by nervous investors. Ted Cook, Apple CEO has previously stated that the Chinese market will overtake the US as Apple’s biggest market. With that market turning soft there are genuine concerns for some Apple investors.

So What is the Outlook for Apple Investments?

USA Today reported an upside prediction for the new iPhone release:

“The iPhone 6S and iPhone 6S Plus are expected to rack up hefty sales when they become available Sept. 25 for $199 to $499 with a two-year contract, or installment plans of $27 and $31 a month for 24 months.”

There is a general consensus among financial analysts today that Apple is positioned to outperform the market overall. With a median forecast of $150 and high forecast of $175 Apple investment retains a positive outlook. MoneyMorning reported that even with a phone sales slump and slowing Chinese economy Apple’s EPS and revenue topped expectations. Panicking and selling in this market could be viewed by some analysts as a mistake, with Apple’s history of packing technology products with the best features that enhance consumer experience and keep them coming back for the company’s products. In fact MoneyMorning’s Chief Investing Strategist Keith Fitz-Gerald even surmised that this may be a “whale of an opportunity” to get into AAPL stock while “everybody is running the other way”.

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