With Apple (NASDAQ:AAPL) stock finally hitting new all-time highs after its dramatic dive and subsequent comeback in the past two years, investors are looking for reasons to stay bullish on the stock. While the company's popular iPhone line is certainly getting its fair share of acknowledgement among analysts as a continued catalyst for the stock, there are a few other often overlooked areas that provide potential upside, too.
Apple is almost undoubtedly working on some sort of payments service. Apple CEO Tim Cook himself said in the company's first-quarter 2014 earnings call that the "mobile payments area" is one that Apple has been "intrigued with."
Sure, little is known about Apple's likely payments service. For instance, the biggest question mark is the technology (Bluetooth, Wi-Fi, near field communications, etc.) Apple will use to execute payment transfers with. But there is one piece of the payments puzzle that we likely already have figured out -- and it's probably the most important piece: Touch ID.
Touch ID could be the key differentiator for a payment service for Apple. Indeed, Cook admitted during the company's first-quarter 2014 earnings call that payments "was one of the thoughts behind Touch ID." Touch ID is a crucial advantage for Apple because it would be difficult for Google Android OEM's to rapidly replicate the technology to support an Android-based payment service.
Senior technology specialist at The Motley Fool Evan Niu explains:
Since Touch ID is a hardware element, Google cannot replicate it alone. Google can support fingerprint sensors within the operating system, but the search giant needs to coordinate with OEMs to include the hardware. Even then, that's only once component vendors can provide sensors that can match Touch ID's performance.
The digital store that helped catapult Apple to dominance in the MP3 market when it launched the iPod still serves as a key differentiator for the company today, reinforcing the strength of the Apple ecosystem. But beyond simply supporting a seamless user experience across Apple devices with sales of digital content and services, iTunes is also a growth opportunity for the company.
While Apple's iTunes, software, and services segment only accounts for about 12% of the company's revenue, it shouldn't be overlooked. The segment has been Apple's fastest growing business in the first nine months of the fiscal year. In the company's most recent quarter, Cook said iTunes billings specifically grew 25%, year over year. Further, due to the conservative way Apple books the revenue of its fast-growing App Store business, the reported growth of Apple's iTunes, software, and services segment may be significantly understated.
New products and technologies
Sure, the ever-active Apple rumor mill is always busy exploring potential new products from Apple -- even ones in entirely new categories. But are the upcoming products in "new categories" that Cook has mentioned on several occasions reflected in the company's share price?
Just incase investors haven't heard it enough, Cook reassured investors in the company's most recent earnings call that new products are on the way.
We are hard at work and investing heavily on exciting opportunities across our business and we have an incredible pipeline of new products and services that we can't wait to show you.
Apple Internet, software, and services chief Eddy Cue even said in May that the products coming later this year are "the best product pipeline I've seen in my 25 years at Apple."
These three potential catalysts, next to Apple's growing iPhone business, make the stock look enticing -- even at $100.