I love to come out with original and promising trade ideas. Clearly, being a believer in Apple isn’t original. In many ways, it’s the most hyped stock in a long time. Earlier this year, I put the stock at the very top of my Tech Stock Power Rankings, included it as one of my 4 stock picks for the yearly competition, said you’d be crazy to now own Apple $AAPL and have been trading in and out of the name with decent success so far this year. All of that has been done with a good degree of success.
What Makes Apple So Great?
Even though I am a big believer in Apple, there is clearly less gain potential because the company is already the most valuable company in the world and while it will probably show solid gains, hoping for the stock to double or triple over a few years seems very unlikely to happen. Finding long term speculative picks is about finding the next Apple or the next Microsoft. In that sense, I think it’s important to not the 2 or 3 things that Apple has been doing extremely well and look for other smaller, emerging companies that could fit the pattern. We could probably all agree that to some degree, the surge of Apple is due to the incredible success of the iPod’s, iPhone’s and iPad’s. Sure, there are other reasons but I would argue that those are the main ones. If you think about it, in all 3 cases Apple was releasing a product:
-That already had competitors
-That ended up taking a huge market share and becoming the dominant player
How Did The Steve Jobs Led Company Get It Done?
#1-Create A Consumer Centered “Cool” Product: It’s not just about having a functional product such as the Sony mp3 player, the Blackberry or those old Windows powered tablets. In each case, Apple released a good looking, simple to use product focused on the consumer. Why try to confuse consumers by selling 20 different types of tablets?
#2-Create An Event: Apple has been unique in making a worldwide event out of the launch of its products. You will hear about the launch of the next iPhone weeks ahead and once that day happens, coverage all around the world will be focused on the new features, the price, etc.
#3-Healthy Sale Cycle: In a similar way to the car industry, Apple has been able to release a new edition of its key products every year or so, which has helped keep consumers interested, keep up the hype, but also get consumers to renew their products every year or every few years.
So Is Apple Really First To Market?
I guess you could say that for all of its key products, Apple has not truly been first to the market. What it has been though is the first to go to the market with an “all-in” attitude, putting tons of resources into the product and getting involved for the long run.
The TV Market
We all know that Apple is working hard on the upcoming Apple TV. Steve Jobs said in his final weeks that he had “finally figured out TV”. Clearly, competitors such as Samsung are also working on their own tv. I’m very much looking forward to seeing how these companies will be able to compete in another multi-Billion dollar market. Will the Apple TV become the “standard” for the new generation of TV sets? Or will competitors finally be able to get in on time? I’d personally bet that Apple will once again be able to come out with the first “top quality product”.
Difficult To Find Such Opportunities
I do not currently see any stocks/companies that seem to be doing such products/marketing but I will certainly be keeping my eyes open…how about you? Do you think that any companies have been able to replicate the Apple model?