Apple - analysis of a successful company

Apple is probably one of the companies we know best, producing many products that we use every day such as iPhone, iPad, apple watch or as apple music. Apple has been active since 1976, the year in which it sold founded by Steve Jobs together with Steve Wozniak and Ronald Wayne.
If we look at the Apple chart we can see how much the company has grown, and how its impressive growth seems almost unstoppable.

However, a smart investor cannot afford to buy stocks at random, so in this article, we will go deeper into Apple’s success and why the company has managed to dominate the market over the years.

Building the brand

Much of Apple’s success depends on building its brand. It does not matter if the competition has already placed a product similar to that of apple on the market, the apple company will certainly be able to develop its own, original and recognizable version of the product. This type of strategy has led Apple over the years to create a recognizable and integrated system, in which the user can recognize himself from the first moment. Apple has been a company that has focused heavily on product customization, and for this reason, its sales have grown significantly. Buying an iPhone, in people’s minds, is something completely different than buying another smartphone. An Apple product, in its own way, remains something unique for the buyer.

The strength of the Apple ecosystem

Apple also aimed to build an ecosystem in which all its devices could be integrated and used for useful purposes. In this way, the purchaser of an Apple product will not be limited only to the first purchase but will be tempted to continue to complete the offer of products and services of the entire ecosystem. Furthermore, in this process of building an integrated apple ecosystem, the user will be discouraged from purchasing products other than those offered by the company, because they will necessarily have to stop using other Apple products purchased. Finally, placing a user within its own ecosystem of products and services entails a strengthening of the user’s opinion towards the company and a consequent greater loyalty towards Apple.

Financial data analysis

Now that we have seen what are the two main strategies that apple uses to secure more and more customers, let’s analyze the results of the company in recent years.
In the last quarter, Apple recorded a 29% increase in revenue, with a 21% increase in revenue over the previous year.
Although the company remains predominantly anchored in the American market, which currently generates 40% of revenues, Apple is doing a lot to diversify the geographic areas from which to profit. To date, 20% of revenues come from China, another 25% from Europe, and 14% from Japan and the rest of Asia. These numbers show the strength of the company: a possible crisis in one of these markets would still make Apple able to sustain itself with the revenues generated by the others. In particular, compared to the last year, the growth in revenues generated by the Chinese and Japanese market seems to be very accentuated, with numbers approaching 50 and 30 percent respectively.

Furthermore, let’s not forget that Apple also owns numerous other companies that operate in various fields and which have been purchased by the apple company over the years. Let’s think, for example, of Shazam or Beats that have allowed Apple to better integrate into the music sector. All of these companies offer additional flexibility to Apple’s ability to withstand financial shocks.

What to do?

At this point, we can certainly say that Apple is a solid company capable of withstanding the years to come and with a strong business. However, seeing the company’s price close to highs and considering the uncertainties recently shown by the markets, I would consider it appropriate to wait for better opportunities to evaluate a purchase of Apple shares. This is obviously not financial advice, to each their own choices.

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