Where Apple As a Company is Headed, and What should Investors Expect in the Next Five Years

Apple was founded by Steve jobs and his friend Wozniak in 1976 in the garage of Steve jobs house. The company first was listed at the stock exchange in12 December 1980 with initial market valuation of 1.8 $ billions and raised 100 $ millions. Since then the company has come up with many products Like iphone , iPad ,mac and  airpod, apple tv. Because of the relentless efforts of Steve Jobs, Tim Cook and the Apple team, the company is 1666 times bigger in terms of market cap since its IPO in 1980.

Performance From 1980- 2000

In this period the major focus of the company was on PCs and Home computers. Almost every year a new version of the computer hits the market with little improvement. Apple was the fastest growing company in the world. It was also surrounded by controversies. Jobs had to leave the company in 1985, then he came back later in 1997.

1- Major product apple sell in this time

 a- Apple computer

 b- Macintosh computer 

2- Growth in revenues and Market capitalization:

Despite the controversies apple was growing massively because of the uniqueness of its products it was ahead of its customers. 

So, the company hit its highest profits in 1990 of $ 10 billion. Afterwards it started to decrease and it ended the year 1999 with 8 billion in revenue. It started from $ 1.8 billion and peaked to $ 19 billion and then decreased and ended the year 1999 at $ 4.2 billion.

In this period of the company revenue rose from 1 billion to 10 billion ,and market cap went from 1.8 billion to 19 at its peak.

Performance From 2001 to 2011

After returning back to Apple and having the full confidence of the board jobs was relentless in the decade, the product line he came up with this decade is still the core of the revenue stream of apple.

1-Major product of the decade 

a– MacBook (2001)

b– ipod

c- iPhone

d– imac

e- ipad

2- Revenue, Profits and Market cap

Because of products like macbook, ipod, iphone and Imac in this time period the revenue, profits and market cap exploded this decade.

The revenue of the company went to $108 billion from $8 billion. Which is the growth of 1350% in a decade.

The profits of the company went from $170million to $26 billion, almost an increase of 15194%.

And the market cap of the company went from $4.2 billion to 322 billion, almost an increase of 7566%.

Change of Philosophy:

Steve Jobs died on 5 Oct 2011 because of cancer and someone had to step in his shoes, and clearly no one was ready for his role the way he did. Jobs had to make a decision before he left the world, so he chose the vice president of the sales team. 

1- World Best innovator Replaced by World Best sales man.

Steve Jobs always believed that if we built a truly wonderful product we don’t have to worry about sales. So, he always acted on his beliefs. He always didn’t pay any great amount of focus to sales. Because of this apple was way ahead of his competitors. Lots of companies went bankrupt because they were no way near the product of Apple, like Blackberry, and companies who used to make MP-3 music players.

But when a salesman like Tim comes into the role Steve his major focus is to sell products that Steve has built. And he did a wonderful job of selling those products. He paid a very little focus on the core the company is built , to keep himself way ahead of the compiler and find a product that no one even has thought of.

Performance From 2012- 2021

This is the time when he could make best utilisation of his skills , the stage is set for his success. Steve also might be aware of his skills so he let the cook replace him. He knew Apple had great products and someone needed to sell those products. So, that is exactly what he did.

1- product introduced.

Not a great amount of products were introduced in this decade the products were introduced were.

a- Apple watch

b- airpods

c- A few health services products 

Revenue, Profits,and Market cap

This decade Apple has done wonderfully well in terms of revenue. It started from 108 to $378 billion in 2021. It is almost an increase of 250%. 

As the revenue increased so did the profits $94.7 from 26 billion in 2021 comparison of 2011. It is Almost increase of 260%.

The trust of investors exploded even in comparison of profits and revenues,it seems investors did get special attention from Cook as the market cap went from $322 billion to $2.9 trillion.

Cook delivers exactly the things that were expected of him: sales went up, profits went up and investors’ confidence just exploded. The company which was selling at P.E of 1:12 is selling 1 : 30 exactly the time when it is losing it’s charm. That kind of thing only can be achieved as a great sales person.

Performance From 2022- 2024

Since apple has lost its competitive edge of constantly inviting and keeping himself to much a head of competition, so It maybe start reflecting in their number and number doesn’t seems encouraging either. 

1- Revenue, profits and market cap

From $ 374 billion in it has grown to $ 384 billion and current seems negative. It is harder to make more growth with the same products.

Profits are also steady this time $96.99 billions in 2023. Only showed very little growth.

Market cap is also steady with only little growth from 2021.

Cook is doing what best he can do, he never invented and I don’t think so he ever will be able to invent , but if he tries it will be very hard to market as it is so competitive.

Next five years of Apple.

Apple is still the one of the most powerful companies in terms of their sales numbers, only the question is will they be able to maintain the level of sales at the same level that they have achieved. With no major product seemingly not on the line. 

How the revenue, profits and market cap is going to look like in next five years: 

No one should expect growth from Apple with

no new product on the line. And I don’t see any on the line. Only big project we know of by apple is the apple car. Which fell upon its own feet, Apple hasn’t been able to design a car which they can market. This shows how deeply Apple is degraded in terms of innovation and creativity.

I feel Apple will be able to maintain the level of sales up to this level for maybe the next couple of years, and see the downfall. Because we have started to see negative growth in terms of iphone, imac, and macbook, which was the biggest driver of apple growth in the past one and a half decade. 

As the revenue are potentially to fell the impact the profits and eventually the stock price effected by company revenue performance. To up hold apple stock apple putting a lots of money in stock buying back program this tells how deeply Apple cares about the stock price and not about the innovations a new products.

Only Way Apple Can Keep It Self Relevant

Apple still have the most beautiful, powerful and simple products. The issue now is people, who will feed up as the time will goes by. The always need a new thing to experience and explore. To meet that demand Apple need to innovate the product the people need but the don’t they needed it. As , once Steve jobs said people don’t know what they need until they really see it. To achieve that it really requires a lots of knowledge team work and patience.

The Potential Mistake We Will see by Apple That Apple Can Make In recent Future:

As I can see apple will struggle to innovate because lake interest and knowledge apple will start to see decrease in sales. As a sale’s person first thing will come to his mind be prices. If he started to flirt with prices that thing only be catalyst to the destruction. Once they started doing this they might get one time customer in countries like indian or China but they will start to lose their most loyal customer base. Who just buy their product simply to show the world. And they just have started doing in china because it’s getting harder and harder to complete on quality with Hawawa in china. So , apple started slashing prices.

Outlines for investors:

Nobody understand business better than warren buffet how the apple’s one of the biggest share holder from 2016. But in recent years he started slashing it’s share in apple stock . He knows businesses inside out. If he slashing who believes “in buying the businesses and never selling it”  means apple is running behind interms of future product which going to impact share price. If someone reading it how owns or thinking to own apple share price. I would say it’s not the high time if u have it sell it then because even if apple ables to maintains it sales for the next few years still it is to expensive. Because currently the PE ratio is 1:30 investors are priced for growth future which is never going to happen any where soon.So, once they started rationalizing the price it’s market cap come 2 trillion are just above 2 trillions almost the decrease of 33%. So get rid of before you start to lose money.

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