Apple Inc: The Good Times Are Not Over

Apple can still make investors prosper in the near future. Will Microsoft and Samsung allow this to happen?

Apr 17, 2014 at 9:30PM

Apple (NASDAQ:AAPL) ranked fourth in returns among the largest companies in the S&P 500 over the last decade. Sales of the iPhone and iPad have driven Apple shares up 3,600% in that time. But due to a 25% drop since September 2012, doubts have arisen as to whether investors can still beat the market with the company.

The rumored release of the so-called iWatch in the third quarter of the year, the launch of CarPlay, and the company's update of its great products each year will help investors prosper in the near future.

Apple's CarPlay wants to control your car
The global connected car market is driven by factors such as the growing awareness about the need for connectivity. The demand for services such as gaming and traffic information supports the growth of the market. According to Transparency Market Research, the global connected car market is expected to reach $131.9 billion by 2019. Vehicles from Ferrari, Mercedes-Benz, and Volvo already use Apple's CarPlay. The initiative should boost Apple's revenue going forward.

The anticipated release of iWatch
Apple is a global brand, and its reach has never been greater. The company can sell a new product launch. According to Economic Daily News, Apple will release its anticipated iWatch later in the year. With the development, Apple can profit from the smartwatch sector. Canalys predicts 17 million wearable bands will be shipped this year. The smart band segment alone will reach 8 million annual shipments, growing to more than 45 million by 2017. Apple has a great prospect in the sector.

The updating of great products
In addition to CarPlay and the so-called iWatch, Apple will continue its current course of updating its great products each year. Apple has sold more than 470 million iPhones and about 200 million iPads since the company launched them a few years ago. IDC believes that smartphone shipment volumes will grow at a compounded annual rate of 16% and reach a total of 1.5 billion units shipped in 2017. The research firm also predicts that worldwide tablet shipments are expected to grow by 22.2%, year over year, in 2014 to a total of 270.5 million units. If Apple remains the dominant force in the sector, it will return lots of cash to investors via dividends and buybacks.

Competitors
Microsoft
(NASDAQ:MSFT) has shown a prototype of its Windows in the Car interface. It is doing this for a good reason. The global connected car market will be worth $54 billion in 2018 from $18 billion in 2012, according to forecasts from research firm SBD and the GSMA. Microsoft will gain an important source of revenue if its product gains traction in the market.

Samsung (NASDAQOTH:SSNLF) is another company that has seen potential in the smartwatch segment. It recently announced the release of its Gear Two titles. NextMarket Insights forecasts the overall smartwatch market will grow from 15 million watches shipped in 2014 to more than 373 million by 2020.

Foolish takeaway
Investors can still prosper with Apple in the near future. Its anticipated launch of iWatch in the next few months, the release of CarPlay, and the update of iPad and iPhone will return lots of cash to shareholders.

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Mark Girland has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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