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Sunday, April 28, 2013 by Christoph.Schmid|Comment 0
within category Apple,APPL,Share purchase offer,Smartphones,iPad,iPhone,Tablets,Turnover
Head-lines 
  1. In recent times Apple’s gross margin has suffered from lower than average selling prices across all products.
  2. Apple will return, via share buy-back, a total of USD 100bn to shareholders.

Strength and weaknesses analysis / Fundamental Analysis:

Strengths:
  • The smartphone market is expected to double in size between now and 2015. Even with no market share expansion (in relative terms), in absolute terms, Apple’s revenues will still be out of reach for the competition.
  • The consumer trend is towards products with multi-applications (e.g. tablets).The iPad product line has achieved the highest sales expansion to date. 
  • Because Apple consumers are loyal, Apple can focus purely on a “replacement strategy” should consumer sentiment remain flat.

Weaknesses:
  • The launch of the iPhone5 could signify the end of a major creation cycle at Apple. As demands are high and product cycles shorter than ever, this could open the tablet market for newcomers.
  • Compared with its competitors, Apple is the most reliant on third-party providers as doesn’t have its own factories. For once, this may work against the “company from Cupertino”. 
  • Apple needs to launch and sell new products (in addition to existing sales) in the order of 1bn per annum in order to maintain the same equity growth rate.
  • Apple may face stiffer competition for high end products, where it has excelled in the past. It is unlikely that it can defend this position forever. 
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