3 More Reasons to Buy Apple

Many look at Apple's (Nasdaq: AAPL  ) $400 stock price and $375 billion market cap and wonder how much bigger the company can get. But the more important question is what's driving Apple's growth now -- and what will drive it in the future. I see big things ahead for Apple's products, its international sales, and its role in business. Once you look at these catalysts, you see that Apple is worth much more than what its shares are trading for today. Let's dig in.

Long runways for growth
Apple's three most important products -- the iPhone, the iPad, and Mac computers -- all have tremendous growth potential.

Even in the face of increased competition from Google (Nasdaq: GOOG  ) and Microsoft (Nasdaq: MSFT  ) , iPhone sales surged 81% in Apple's 2011 fiscal year. And there's much more growth to come; IDC expects the overall smartphone market to double by 2015.

The iPad's success is even more spectacular, with sales up 166% in the fourth quarter. I expect iPad sales to continue to skyrocket; iSuppli says global media tablet shipments will rise by more than 350% by 2015.

Finally, Mac sales climbed 26% last quarter, compared with 4% growth in the overall PC market. Yet Apple's global PC market share is estimated at only 6%, leaving plenty of potential for Apple to continue to gain market share -- and with it, revenue and profit.

Booming international sales
Revenue surged by an incredible 139% in the Asia-Pacific region in Apple's most recent quarter, driven by strong sales in China. Apple plans to open 30 new stores outside the United States in 2012 to meet this insatiable demand for its products. New carrier deals with companies such as China Mobile (NYSE: CHL  ) , the dominant wireless communication company in China, should further fuel international growth.

Growing enterprise market share
Many people think of the iPhone and iPad simply as consumer products, but they're also disrupting the way companies do business. Ninety-three percent of Fortune 500 companies are deploying or testing the iPhone for use by their employees, up from 91% last quarter. As for the iPad, 92% of the Fortune 500 are testing the device, and CFO Peter Oppenheimer said in Apple's earnings call that "the pace at which businesses worldwide are adopting this technology is unprecedented." It's clear that Apple is taking share in the corporate market from its less innovative competitors, and I think Apple has only just scratched the surface of this massive market opportunity. If you'd like more evidence of this, just look at the stock chart of Research In Motion (Nasdaq: RIMM  ) , Apple's closest competitor in the corporate sector.

The Foolish bottom line
When I recommended Apple in my Rising Stars Portfolio, I highlighted the company's powerful brand, superior products and services, numerous competitive advantages, and strong management. In a subsequent article, I said that Apple's overblown "earnings miss" was giving investors another opportunity to buy shares at an attractive price. And in this article, I've given three more reasons Apple is poised for further growth. Apple remains my highest-conviction idea in my Tier 1 Investments portfolio, and I continue to believe that investors who buy shares today will be rewarded.

Next steps:

  • If you'd like to follow along with Tier 1 Investments as I build out the rest of my portfolio, check out my recently launched Twitter feed, or keep checking back in with my Rising Stars page, which is updated with all of my buy recommendations.
  • Keep track of Apple's share price and breaking news by adding Apple to My Watchlist.

Joe Tenebruso manages a real-money Rising Star Portfolio for The Motley Fool and is an analyst on The Motley Fool's Million Dollar Portfolio and Income Investor premium services. Joe has written puts on Apple. The Motley Fool owns shares of Google, China Mobile, Microsoft, and Apple. Motley Fool newsletter services have recommended buying shares of China Mobile, Google, Apple, and Microsoft, as well as creating bull call spread positions in Microsoft and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.


Read/Post Comments (1) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 01, 2011, at 4:14 AM, oldal41 wrote:

    I could have been 30+ but then no one would have read it.

    But what about SIRI in 2-3 years? Intuitive voice recognition wow, or C3's 3D maps.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1580951, ~/Articles/ArticleHandler.aspx, 10/22/2014 4:49:23 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement