The Opportunity With Apple Today

In this video, Austin Smith describes Apple's big opportunity: its iPhone. An unsubsidized iPhone costs about $650, but most people pay around $200 for an iPhone, and if a carrier doesn't subsidize the smartphone, customers will go to someone who will. This results in a profit margin 10 times greater than the margin for PCs. The smartphone market continues growing, and although Apple might lose market share, Austin says, its popularity and carrier subsidies allow Apple to gain great profit margins. Consequently, Apple enjoys a great cash balance to work with for future projects and innovations.

See the video for more details.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

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  • Report this Comment On May 12, 2013, at 3:51 PM, kind333 wrote:

    there are a ton of risks that the author does not mention. As a responsible journalist he should mention that Apple may not longer going forward be able to charge such high prices and force carriers to subsidize at such high prices. They could do this before because they are the only phone in town. Also he fails to mention that many carriers do not carry Apple for this very reason. It is a terrible article for is hype of Apple without talking about the risks.

  • Report this Comment On May 12, 2013, at 4:37 PM, vulcan747 wrote:

    kind333 - Tons....I mean tons of risk?

    Hyperbole for sure! With the new iPhone and

    fingerprint ID for Apple Wallet, Samsung's

    uninspiring new or should I say same old 4S

    is due a dramatic drop in sales. Yup, Apple ups their

    smart phone profit share into the mid 80's.

    Read it and weep "kinda"

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