Should You Invest in Apple?

PHOTO CREDIT: Apple

OVERVIEW

Apple Incorporation is a company based in the United States. The company designs, manufactures, and sells a wide variety of consumer electronics around the world. The company is known to manufacture products like the iPhone, iPad, Mac, Air Pods, and many others. The company also sells services like iCloud storage to its customers as well. Apple was founded in 1977.

Why You Should?

  1. One of the main reasons why Apple might be the best company in the world is it’s an effort to integrate all of its products into one “ecosystem”. For example, people can take a photo on an iPhone and effortlessly edit it on their Mac or iPad and store it on iCloud. This will further lock customers into its products.
  2. The COVID-19 pandemic also benefited the company, which saw a record year despite the pandemic. Consumers needed to purchase hardware and software to stay entertained. They purchased products like iPhones, iPads, and Macs to continue to stay connected, work, and entertain themselves. This will benefit the company and its investors.
  3. Many people want to break up big tech companies. However, Apple is shielded from the bulk of the criticism due to its focus on customer protection and privacy. Through these App Store policies were controversial, the judge ruled that “Success is not illegal”, something that points towards a precedent on how other anti-trust cases might be ruled for.
  4. Apple’s high margins iPhones (iPhone 13 Pro and 13 Pro MAX) and higher-spec Macs and iPads are now rising in popularity amongst consumers who are looking to enter or upgrade within the Apple ecosystem. These more expensive products are also higher-margin ones for the company. This will benefit Apple and its investors in the future.
  5. I think that Apple is one of the best-suited companies to face supply chain issues. Apple has a large balance of cash (over 190 billion dollars) and can utilize this as leverage with supplies (like Broadcom and Taiwan Semi) to acquire parts for their phones as fast as possible. This might help the company better navigate supply chain issues.

Why You Should Not?

  1. Apple faces tough competition in the consumer electronics industry. Some of these competitors include LG, Samsung, Amazon, Google, and many others. This competition might hurt the company and its investors in the future.
  2. Apple will be negatively impacted by supply chain issues in its most important selling period, the holiday season. The company is unable to manufacture iPhones (it recently announced that it had to cut production by 10 million units) and may be hurt by other shipping and parts shortages. This might hurt the company and its investors.

MY OPINION

I think that Apple is a great long-term investment due to its product integration efforts, positive impacts from the COVID-19 pandemic, limited anti-trust concerns, its popular high-margin products, and its good position in the ongoing supply chain issues. However, tough competition and negative impacts from supply chain issues might hurt the company and its investors.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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