Analysis of Apple
3 Apple – An Introduction
3 Macroeconomic Trends
4 Technical Analysis
5 Fundamental Analysis
8 Analysis of Financing Activities
8 Investments and Capital Budgeting Decisions
10 Industry Analysis
11 Performance Analysis
Established in 1976, Apple ignited the personal computer revolution with the Apple II and the Macintosh. Today, Apple designs, manufactures and markets personal computers, portable digital music players and mobile communication devices as well as related software, services, peripherals and network solutions. Apple sells its products worldwide through its online stores, retail stores, direct sales forces and third party distributors to its core customers—consumers, educational …show more content…
For example, Apple’s partnership with Toshiba on flash memory and Apple’s landmark deal with Intel in 2005 . 3. Smaller players being forced out or acquired by larger competitors. For example, Acer acquired smaller manufacturers Gateway in 2007 and Packard Bell in 2008 .
APPLE’S MAIN COMPETITORS Based on a January 2008 study by Gartner , heavyweights like Hewlett-Packard, Dell, Acer and Lenovo continue to dominate the PC market. While Apple may be a minority player, its growth rates are phenomenal. In 2007, when the industry’s unit sales rose by 9%, Apple’s unit sales shot up by 60%. As the industry revenue figures grew by 5%, Apple’s revenue rose by 67%. These figures are extremely heartening for investors as Apple captures more of the PC market share.
In his report entitled ‘3 Cylinder Engine’, Piper Jaffray noted that the ‘enterprise sales account for 70% of the worldwide market, a segment Apple is not aggressively targeting’. According to a 2007 Forrester report, in this lucrative market, Windows’ combined XP and Vista enterprise adoption rate is 94.9%, whereas Apple’s OS X adoption rate is 4.2%. As most of Apple’s competitors ship their computers with Windows operating systems, this could be a major reason for their majority share.
FINANCIAL RATIOS ANALYSIS
RETURN ON EQUITY 2008 2007 2006
Profit margin 0.4337 0.4287 0.3553
Asset turnover 0.2816 0.3217 0.3254
Equity multiplier 1.8818 1.7444 1.7232
ROE (%) 22.99 24.08 19.92