Mrs. 2 Trillion Busting on Apple Car
A complete guide to future disruptive technology.
In this pandemic, Apple made billions of users working and learning from home, and the fact that they reached a $2 trillion in market cap without selling one single 5G iPhone it’s absolutely remarkable.
This fact strengthened the user’s relationship with the brand.
Additionally, with the 5G and Artificial Intelligence technology making the worldwide experience run faster, we’re facing the next level of development.
However, one major question keeps in my mind as an Apple investor. Are we facing another tech bubble or is it really the turning point for disruptive technology?
The unstoppable move of disruptive technology.
I strongly believe that we’re facing a breaking point. This pandemic crisis put everyone at home, and living and working at home, made the whole society realize that things continue to work in the global economy; they don’t stop. In many cases, it works in a more efficient way if we work a distance from the office.
Yet, is the global economy prepared for this shift?
Nobody is ever prepared when the change comes, but changes always come one day. There’s called the stagnation fallacy, which explains that we always take a defensive stance when we believe in the future as it was in the past.
People like Elon Musk, Tim Cook, Jeff Bezos, or Mark Zuckerberg, are constantly preparing the next big thing.
Innovation is going to change the way we pay and receive money, the way we drive from one place to the other. It will change the way we go shopping, learn, and work.
Another trillion in market cap.
Apple Inc. is the most valuable company in the world at the present time. Its brand, products, and services are all over the world, and the pandemic crisis, somehow, made these technological companies boost their sales.
As people continuously change their working habits by working at home, companies that provide better services and products will suffer a major increase in their earning over the next decade or two.
Apple is one of the best companies in the world in hardware and software. In the last fiscal year of 2019, service revenue was an astonishing $46 billion.
These high software services revenues, as a hardware manured company, shows us the shift to the high-profit segment.
Apple Watch and AirPods are the new babies that are making customers crazy.
Apple Watch is not actually a watch, it’s much more than that. It has more apps to follow your health condition than any other device. The noise app alerts you when decibels rise to levels that can impact your hearings. You can choose the materials you love to build your watch, like aluminum, stainless steel, titanium, or ceramic. It has advanced workout metrics, GPS, and water resistance to 50 meters, and streams your favorite 60 million songs.
AirPods are the new baby, with Active Voice Cancelation and transparency mode for hearing what’s happening around you. Customized hearing technology fits a new generation of headphones.
The design is always a strong presence in Apple products, and even in this small device, they did accomplish the smooth lines that make customers love the ride. They have the ear fit tip test for you to choose one of the three sizes of soft, flexible silicone tips.
Apple is making approximately $50 billion per quarter; it’s a real money machine.
The numbers. Show me the numbers.
Ok, I’ll show you the numbers, but I’m going to warn you, they are impressive.
First of all, Apple has been returning capital to shareholders for the last years, wish is a powerful decision strengthening them as a reliable company. Apple did stock buybacks by repurchase common stocks with $32,900 billion in the fiscal year of 2017, $72,738 billion in 2018, $66,897 billion in 2019, and $99,120 billion in 2020.
Tim Cook and his team didn’t have a better option in the market to put their astonishing amount of cash, so they buy back their own shares.
Of course, shareholders did appreciate it, but that’s something discussable. In my opinion, Apple wanted to keep a strong position in the market and they know they have a lot of growth ahead to conquer.
We have this dual effect, and that’s why this share is rocketing. Apple is buying back stocks. Their share count is decreasing, and the value of the company is going up as people give them earnings multiple a premium, giving them a 10 to 15 PE business sometime in the past, and a 38 PE ratio at present value.
Apple is facing a slow growth pace as they get into a massively big company. They will keep having a 2 to 3% annual revenue growth, reaching $100 billion returning to their shareholders, from share buybacks and dividends.
Almost 50% of Apple’s business is selling iPhones, and yes, their services are growing at a rapid pace. But still, what’s the next big step?
At an internal October meeting, Apple executives shared the company’s product roadmap for two augmented reality devices.
Apple Eyes 2022 release for AR Headset and 2023 for glasses.
The future of this company is always going to surprise us.
Tim Cook saw a gigantic opportunity in a simple watch as he transformed it into a health device. Apple recently launches the ECG test on the Apple watch. In terms of health data, the opportunity of entering the health industry is massive.
So, it’s hard to predict what are going to be the next steps of these brilliant minds.
Apple Car vs Tesla
Vehicles are going to be the next technology platform. Tesla is a computer on wheels, and the car industry is clearly an area where Apple would love to compete. The Apple car concept trailer is absolutely astonishing, but can they pull that off? Can they do what Tesla’s doing? Or will they do it differently?
We are facing two future dominant companies in the world. Tesla’s heading toward satellite network business, but so is Apple.
It’s like everyone is waiting for the big match, you know?
Are they going to collide or chose different technology paths?
Final Thoughts
Maybe I am obsessive optimistic, but I truly believe that technology is going to make the planet earth a better place.
I love to study companies like Apple and Tesla. They are the unique paradigm of this new huge trend for carbon-free engineering and design.
Apple car was fabulously designed by Gunho Lee. We’ll see about Apple’s technology on wheels but prepare for something big.
If this challenge is something that we will see in the near future, we’ll face one of the biggest epic confrontations in the history of tech companies.
An epic confrontation with two early winners: Planet Earth and human beings.
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