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Apple Profit Healthy: All Eyes On Fall
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Michael Endler
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Michael Endler,
User Rank: Author
7/23/2014 | 5:20:27 PM
Re: Not a bad spot to be in
Shane, you're right-- the iPad is a great supporting device, and can replace laptops in some scenarios-- but as it stands right now, many people (e.g. knowledge workers, like you and me) need real laptops. I use a tablet throughout the day as a supplementary device (e.g. for those moments when I need to look something and am waiting for Windows 7 to un-freeze), but I'd be in despair if I had to rely full-time on an iPad. I know a few people who do heavy typing and rely full-time on a tablet, and I kinda think they're nuts.

Agree that this will be an important quarter for Apple. Tim Cook more or less promised that Apple would enter new product categories this year-- which means we'd better see an iWatch, or a substantially expanded Apple TV, if not a Steve Jobs-style, "one more thing" announcement that's somehow been kept under wraps. And Macs, while still great, new an upgrade. The next version of OS X Mavericks looks cool, but it seems like Apple might be waiting for Broadwell chips before refreshing Macs, at least for certain models. That would carry us into 2015.
Michael Endler
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Michael Endler,
User Rank: Author
7/23/2014 | 5:15:06 PM
Re: Not a bad spot to be in
I concur, Tom. Apple's revenue model is already increasingly reliant on the iPhone, and will only grow more so as the (alleged) larger iPhone 6 cannibalizes iPad Mini sales. This poses a few disconcerting facts for Apple: iPad sales (though still huge) are already starting to taper, even before larger-screened iPhones, and Mac remains a (very profitable) niche. Apple gets a lot of revenue from the cloud, meanwhile, but from the outside looking in, I'm not confident Apple has as good a sense of what it's doing there as Microsoft or Google does. App and music sales are still huge, but also largely tied to iOS reliance. One has to worry about Apple's long-term growth potential.

That said, Apple's been refining both the MacBook Air and iPad for a long time, but hasn't delivered a solid step forward in a while. Likewise, Apple has been cultivating its existing catalogue but hasn't launched into a new category, such as wearables. It's about time for Apple to release more than incremental updates, and if it does, the outlook could be pretty great. Apple's alleged upcoming product catalogue includes 4K iMacs, a fanless Retina MacBook Air, iPad refreshes, the iWatch, and an Apple TV refresh. Lots of opportunities for Apple to show it can still innovate, even while protecting massive profit streams and margins. Goodness knows, if I weren't sure these products will cost a fortune, I'd buy several of them.
Thomas Claburn
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Thomas Claburn,
User Rank: Author
7/23/2014 | 2:33:17 PM
Re: Not a bad spot to be in
I find Apple's long-term strategy a bit troubling. The company is clearly adept at milking profits from its installed base, but if it's not growing its base to match Android's growth, there will be trouble down the road. But maybe there's no way to be both the profit leader and the market share leader simultaneously when there's active competition.
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
7/23/2014 | 10:23:32 AM
Not a bad spot to be in
Looks like Apple is right where it wants to be: steady and healthy going into what could be one of it's most important quarters in years. I thought iPad penetration at Fortune 500 companies would be higher. I think it goes to show that notebooks are still the weapon for getting real work done and iPads are still in a supporting role. But Cook is right -- that means there's growth potential.


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