Apple’s external stakeholders are their customers and vendors. Apple is a superior brand and the brand’s average consumers are generally those with high income levels. The average household income for MAC owners are in excess of $98K annually according to Gaille (2015). Their targeted market are Millennials (18-34 years of age). Fifty-four percent of IPhone owners are repeat purchasers of the previous version.
Apples debt ratio, return on assets, and return on equity ratios are better than their competitors. Apple’s strength appears to be in their ability to produce cutting edge products. The IPhone is considered a premium product by their customers and is even profitable if it is resold from one consumer to another one. Apple had a 43.03% per-share increase between 2014 and
1) Apple’s decreased market share is mainly due to the loss of market share in emerging markets. According to OppTrends.com, the number of people who own iPhones 52.3%in the U.S.; it’s higher than the 49.9% a year ago. Apple is a well-established smartphones manufacturer in developed markets such as the U.S.; however, these markets have been saturated in terms of smartphone ownership. Most of the new growth is generated from emerging markets, where smartphone ownership is not as widespread as it is in developed markets. People who seek to purchase new phone in emerging markets are price-sensitive, whereas Apple’s iPhone models are normally set at higher price due to their better quality and satisfying apps performances.
The last rule is about investing in companies that either that fit into the investment framework by either pullback or when the market is breaking out from big consolidation area or base. The idea is that buying from large companies is easy to hold in the long run and is profitable. The general rule that was used to pick Apple Inc. was the consideration of its overall growth that is seen as above average earnings that are good for the general investment. It can also be observed that the demand for technology related products is currently on the increase. The millennials are getting into employment and making income.
Apple Company Background Apple Computer, It’s a multinational company that produces costumers electronics, personal computers, software’s of computers , and servers of commercial , and it concentrates in digital distribution of media content. Apple’s main line of product are I phone smart phone , iPad tablet computer , and iPod portable media players. Founders Steve Jobs and Steve Wozniak created Apple first computer on April 1,1976 and joined the company on January 3,1977 in California. Apple computers was mostly a creator and manufacturer of personal computers, including Apple II , Macintosh, and Power Maclines , but it faced low market sharing and rocky sales during the 1990s. Jobs who had get rid of the company in 1985, returned to apple in 1996 after his company NeXt was bought Apple.
When negotiating Apple uses the cost based price model, which requires that the supplier open its books to the purchaser. Apple’s large sums of cash, have allowed them the upper hand in negotiations with their suppliers. Apple’s supply chain is one of the top performing supply chains in the world. According to AMR’s recent findings, Apple was named the best supply chain in the world for a third consecutive year (Apple's Supply Chaing Tops AMR Ranking, 2010). This illustrates that Apple is doing something right with their supply chain.
As another method to understand both companies’ performance is to look at the balance sheet, and each company’s cash and cash equivalents, inventory, accounts receivable, and property, plant, and equipment will be analyzed by using horizontal and vertical analysis. Firstly, Apple Inc. had an increase in cash and cash equivalents in the year 2013 compared to 2012. Its cash was increased by 32.69% in 2013 as compared to 2012. However, in the fiscal year 2014, it decreased by 2.91% as compared to its previous year. The major reason of this particular change is that Apple Inc. repurchased a large amount of common stocks and paid dividends.
America’s economy has not always been steady, but the companies that are still able to thrive through those hard times often go on to become extremely successful. For example, Apple Inc. Apple was awarded the world’s third-largest mobile phone producer (only after Samsung and Nokia) in 2013, and was later titled as the world’s second-largest information technology company by revenue (only after Samsung Electronics). Apple is a highly successful company in every aspect. iTunes, Apple’s online music store, is currently labeled as the world’s largest music retailer. What accounts for the corporation’s success is the hard work that has gone into Apple Inc.
The profit margin is just how much of a company’s sales they keep as a profit. Apple’s profit margin is 21.67% while Microsoft has a 28% profit margin so Microsoft is accumulating more profit off each sale but their sales are lower. The return on shar... ... middle of paper ... ...equity depends on profitability, activity and financial leverage (Spiceland, Sepe, and Nelson 258-264). Apple, along with its competitors, are easily analyzed by investors and owners through the Dupont analysis and other activity ratios while also bringing to light the construed formulas Apple uses. Works Cited "Apple Inc." (2014): n.pag.
Looking at both companies’ outstanding shares, Apple has more outstanding shares of common stock on the open market than Microsoft. We can assume that Apple increases its stock issuance of outstanding shares to reduce the stock price thus making Apple’s stocks affordable (Miller-Nobles, Mattison and Matsumura 669). Lastly, Apple’s stock sells at 15230.83 times one year’s earnings compared to Microsoft selling at 38.82 times. This ratio tells investors how much they will to pay for every dollar of a company’s earnings. As a result, Apple has a higher ratio, signifying that a higher price/earnings ratio, a higher return on investment (Miller-Nobles, Mattison and Matsumura 670).