Apple (AAPL 1.93%) has been known to have more expensive phones and computers than its rivals, and for years, that hasn't seemed to have hurt the stock. The company has built up a strong brand that consumers have been willing to pay a premium for. That strong brand is one of the reasons Apple has been a top Warren Buffett stock, and why its valuation is around $3.8 trillion right now, even though the business hasn't generated a whole lot of growth over the years.
Recently, however, the company made a big announcement, which may open the doors to much more growth in the near future. It's launching a more budget-friendly laptop. Here's why this may be huge for the business and the tech stock.
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Apple announces the MacBook Neo
Last week, Apple unveiled the MacBook Neo, which is the cheapest laptop the company has ever offered, starting at a price of $599. Up until now, the most affordable options were around the $1,000 mark. It doesn't take much effort to find laptops that are priced lower than that, and by introducing the Neo, this gives shoppers a much easier way to own an Apple laptop.
The Mac device will run the typical macOS operating system and have up to 16 hours of battery life. This may not be its most advanced Mac, but it will certainly have the potential to lure away customers who may otherwise go elsewhere in search of affordable options. For the company, this opens up the possibility of getting more people into Apple's ecosystem and buying related products and services.
NASDAQ: AAPL
Key Data Points
Why the payoff could be significant for Apple's stock
Investors have long been willing to pay a premium for Apple's stock even though the company's growth rate hasn't always been that great, and even though its artificial intelligence strategy has been sluggish. Currently, the stock trades at 33 times its trailing earnings, which is a bit rich for a company that has grown its top line by just 6% over the past three fiscal years.
Launching the MacBook Neo can bolster the company's growth rate of not only Macs but also other products and services within the Apple ecosystem. It opens up opportunities to bring in more types of consumers and unlock more growth opportunities for the business. If Apple's growth rate is able to improve by targeting a wider range of consumers, that can result in a lot more upside for the tech stock, which is why it looks to be a great buy on this news.
