I recently purchased Apple at $72 a share. It’s been on a little bit of a roller coaster ride recently with a recent high of 86.40. Right now, the stock is trading at $77. The recent uptick was probably due to the excitement over MacWorld and the announcement and shipment of the new Intel Macs. This was counterbalanced by Apple’s recent earning’s reports and guidance. What doesn’t help is lowered projections by Apple’s CFO for the 2nd quarter, analysts’ disappointment in those projections, and an Apple article in the latest issue of Forbes on whether the company is overvalued. There is concern that the prices of the iPods that Apple is selling is dropping and the margins of iPods vs Mac computers is lower, but I still like Apple because of these reasons:
1. OS X. There is no better consumer operating system out there at the moment. I’m talking about stability, security, UI, ease of use, and an open source backend. As Vista’s release gets pushed farther back (there’s even a security alert for Vista!), OS X looks better all the time. I love Windows XP for games, but for everything else, I would use an Apple and OS X. Regarding OS X as a server, the Apple site says it best:
Mac OS X Server gives you everything you need to provide standards-based workgroup and Internet services — without the complexity of Linux or the cost inherent in other UNIX-based solutions.
I decided to go with Macintosh servers before OS X, and things looked bad for awhile with the limits of pre OS X operating systems, but I’ve been very happy with the stability and ease of use of OS X as a server operating system. What’s very nice is that I can use the vast library of open source programs on OS X.
2. Intel Macs. Intel has had its problems lately – especially with the superiority of AMD’s chips, but Intel has more fabs and an R&D department that can’t be discounted despite some recent setbacks vs. AMD. The relatively quick release of the Intel iMacs and MacBooks is a great sign that the transition to Intel chips will go smoothly. The roadmap for Macs looks a lot better now with Intel behind the brains of the Macs. The news that Apple won’t prevent the installation of Vista also means that Mac users can have their cake and eat it too, either with a dual boot Mac that can run OS X and Vista without any speed penalties or a Vista emulator running in OS X that should run at very high speed.
3. iPods. Apple owns the market, and iPods are a product that people can replace on a more frequent basis than computers. Apple doesn’t sit on its laurels in terms of iPod updates, and I can see people with multiple iPods for different purposes or just because they want the newest one with the latest features. The barrier to purchase is lower because the pricing is a lot lower than computers or older iPods.
4. Media opportunities. iTunes is a great interface for downloading and managing music and more recently, video content. From what I’ve read, Apple doesn’t make too much off iTunes or content downloads, but I think of the future and the possbilities of what Apple could control in terms of media content and the regular incremental revenue they could make off media downloads.
5. Steve Jobs. He is a business and media superstar. This guy pushes for excellence and he gets things done. Whatever one says about Apple, with Jobs at the helm, you can never say Apple is a boring company. With Jobs at the top and a culture that pushes the best, I expect some surprises down the line that could easily push Apple past the present products and technologies that analysts and investors think about these days.