A Peek At The Core of Apple Inc (NASDAQ:AAPL)

A peek at the core of Apple Inc

The year has come and it’s time to bid it goodbye as well. The market has behaved true to its personality and been as temperamental and volatile as it always is. Many sectors got shaken up by the tremors and the apple of the technology eye, Apple Inc (NASDAQ:AAPL) also weathered all the inevitable storms. 

Power to the iPhone

In due Apple style it launched the much-awaited iPhone 5S and its less glamorous cousin, the 5C. iPads were upgraded and the iPad Air was launched. New Macs hit the shelves just in time to catch the holiday shopping frenzy. The December quarter has proved to be the strongest for iPhone5S sales. It has been the top seller at all the 4 big wireless carriers in the U.S since its launch and the 5C has come in a close No 2 or No 3. And so, though the Samsungs and the HTCs, Sonys and Nokias have not really beaten a retreat they are slightly on the back-foot all the same.

The Apple Lost a Bit of Crunch

Despite all this excitement in 2013, Apple Inc (NASDAQ:AAPL) has underachieved. Year-to-date the company managed a very meager 5% gain. In comparison, the S&P 500 gained almost 30%. Nevertheless, when it comes to market movements a forward-looking mechanism has to be adopted and there are definitely some things that Apple investors can look forward to in 2014.

Very recently, Apple Inc (NASDAQ:AAPL) signed a deal with NTT DoCoMo. It is no secret that the developed markets are all reaching saturation point. No matter what spend capacity they have, in terms of sheer numbers, the ballooning populations in the emerging markets act as a magnet for even the biggest technology players in the industry. iPhone sales are all set to hit new highs in 2014.

China is Precious- Handle with Care

In the pipeline is the high-potential China Mobile deal which will open up the Asia Pacific region in a fantastic way for the company. The China Mobile deal, if it eventually reaches fruition will come through at an opportune moment. Carriers in the U.S are planning on lifting the subsidies on iPhones.

Years ago, it made a lot of business sense to subsidize the iPhone. Every other smartphone on the block paled in comparison and iPhone was king. But over the last few years, the landscape has metamorphosed. There are some excellent Android phones out there that are as responsive and fast as iPhones are, thanks to Project Butter. And the untouchable iPhone is not as peerless as it once was.   

Devising a device plan

Another important aspect that investors can look at is that the innovation giant has got a delectable line-up of devices for all its device-hungry fans. To-be-launched in 2014 are the iPhone6, a larger iPad (eyebrows raised) and of course the long talked about Apple HD TV. A highly upgraded iOS 8 is most probably waiting around the corner. And how can we omit a mention if the iWatch.

Even as everyone waited for the iWatch launch in 2013, QUALCOMM, Inc (NASDAQ:QCOM), Nokia Corporation (ADR) (NYSE:NOK), Samsung Electronics Co., Ltd (KRX:005930), Pebble and Adidas just went into nitrous mode and flooded the market with their respective wrist-ready devices, while Apple Inc (NASDAQ:AAPL) was left well, “ I-ing” them.

Technology and Style

But there are some other distinct indicators that 2014 might just prove to be the year when Apple outdoes itself. The iPhone maker introduced its M7 motion-microprocessor. This fantastic chip functions seamlessly with motion sensors in the iPad Air, iPhone5 and the iPad Mini with Retina. Don’t stop, read on- it also works amazingly well with 3rd party apps such as Nike Move+ and Day One. This technology will bolster any new device upgrades that the company is planning in 2014.

But what’s technology without some cosmetics? Apple Inc (NASDAQ:AAPL) hired the former Chief Executive Officer of Yves Saint Laurent, Paul Deneve and Burberry’s former CEO, Angela Ahrendts, both notably fashion-conscious high-flying executives who might just end up adding a special touch to the new gadget launches that are slated for 2014.

Gorilla Power

Apple’s flirtatious foray into the sapphire space ended up giving Corning Incorporated (NYSE:GLW) the jitters and it probably started wondering if Apple Inc (NASDAQ:AAPL) was going to show its Gorilla Glass (which is currently the face of every iPhone), the “Go” sign. But that didn’t happen and the two companies ended up forging their relationship and are working on how to make this already tenacious glass a little more scratch and damage proof than it currently is. So, that bit is settled then.

Buyback back-out?

Icahn got weary of waiting for Cook to say “I can” for the $150B buyback that he had been demanding for ever so long and has now mellowed down a bit and agreed to the modest figure of $50B in total buybacks. Tim Cook might just up that amount next year.

But maybe the company should be channelizing its cash stash towards shareholders, in the form of dividends, instead of rolling out share buybacks which effectively are pats on the backs of investors who are leaving the company. And even as Apple Inc (NASDAQ:AAPL) gets into location-shift mode as construction on its new “spaceship” headquarters in Cupertino California begins, it will iWork and peer into its core and add some iLife to its skin as well. 

Priti Desai  is an astute business writer who has been writing about stocks and business long enough to know that the best way to be in sync with the market is to sink oneself into its volatility and irrationality. She feels that understanding business ebbs and tides is about being able to see the flip-side. Every word she writes exemplifies her expertise and knowledge. Money is what makes the world spin while business is what adds momentum to it. Zeroing-in on an exclusive and sui-generis view is about panning the finance landscape and getting a 360° view. Connect with her on pdes17@gmail.com

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