More Evidence That Apple Is Doing Just Fine

Despite Apple's (NASDAQ: AAPL  ) floundering stock price, there are a number of figures and trends that suggest the company is set to continue to grow for years. And thanks to another report of web usage from Chitika, Apple investors can again rest assured that the iPhone continues to dominate in the U.S. and Canada.

Is Apple worth more than its conservative valuation implies?
Trading at just 13 times earnings, Apple wouldn't need any top-line growth over the next five to 10 years to reward investors. Flat revenue would be enough, as long as Apple can maintain pricing power and continue repurchasing shares and paying dividends. Any top-line growth would be a bonus.

But is Apple really hitting a wall when it comes to growth? Consider some of these key factors that may suggest otherwise.

  • Apple's revenue and earnings per share were up 6% and 5%, respectively, in Apple's fiscal 2014 first quarter from the year-ago quarter.
  • Active smartphones in China, where Apple made a deal with the world's largest carrier to sell iPhones in January, have nearly doubled from 380 million in the first quarter of 2013 to 700 million by the end of 2013, according to Umeng -- talk about a booming growth market.
  • Apple CEO Tim Cook has said the company plans to enter new product categories in 2014.

And here's another reason to add to the list of why Apple investors shouldn't be concerned with the beginning of decline for the Cupertino-based tech giant: Apple is dwarfing Samsung's progress in the U.S. and Canada.

iPhone 5s.

The 2013 iPhone models in the U.S. saw their share of web traffic among the iOS platform grow nearly twice as fast as the web traffic for Samsung's Galaxy S4 as a portion of Samsung's smartphone web traffic in the first two months following the devices' launch dates, according to Chitika. This is especially notable since Apple's much greater growth was recorded on a larger installed base than Samsung's.

Further, iOS share of mobile web traffic in 2013 grew to 67%, more than double Samsung's 33%.

But can Apple maintain pricing power?
That's the big assumption that stands at the foundation of the thesis that Apple stock is undervalued with top-line growth; without continued pricing power, Apple stock could be a dangerous bet at today's prices. Fortunately, however, there is no considerable evidence that Apple's pricing power for its devices is fading. And to put icing on the cake, loyalty to the Apple ecosystem is as high as ever.

With upside potential to revenue, steady pricing power, and improving share of web traffic in the U.S. and Canada, Apple stock is a solid bet in this pricey market.

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