Apple in 2018: the next Nike, Louis Vuitton, Saks?

Apple in 2018: the next Nike, Louis Vuitton, Saks?

Summary: That's what the company's growth curve looks like moving forward, according to one market analyst. Which isn't such a bad thing.

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TOPICS: Apple
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Newsflash: technology market analysts are bullish on Apple.

Surprised, right?

Add Toni Sacconaghi of Bernstein Research to the crowd, who issued a report on Thursday offering his five-year outlook for the company.

In sum, Apple will benefit from its largesse -- even incremental growth on its existing revenues will be huge. That may not be of comfort to investors who have enjoyed the spoils of the company's unprecedented string of hits over the last decade, but it's solid footing nonetheless for a technology company in this age.

But nevermind the numbers. The most interesting bit? Sacconaghi's speculation on what Apple wants to become.

MarketWatch's Dan Gallagher summarizes:

Sacconaghi predicted that Apple will soon become a "premium, branded consumer company" that generates most of its profits from repeat customers. He made a comparison to companies like Nike, Louis Vuitton and Saks "all of which trade at material premiums to Apple today."

Hmm, now that's interesting, for several reasons.

  1. Isn't Apple already a premium, branded consumer company? Wasn't it before it ever experienced its massive growth?
  2. Couldn't it be argued that Apple is even less a premium company than it is today, and it's just riding on perception alone? Its most popular product, the iPhone, is priced just like other smartphones on the market. (It's certainly not a value company pushing commodity products, but still.)
  3. Nike, Louis Vuitton, Saks Fifth Avenue -- the lesson here is that you need to assemble a like-minded audience. Criticize the Cult of Apple all you want, but it's the best business strategy there is.
  4. Nike, Louis Vuitton, Saks -- none of these are technology companies. It's interesting to see a consumer tech company break from being a commodity. Apple managed to crack the nut that is technology products being only the sum of their parts.
  5. Nike, Louis Vuitton, Saks -- there's an odd man out here. Nike and Vuitton manufacture and sell their own goods, with additional distribution deals through third parties. Saks is merely a retail middleman, but curates a collection for a specific audience. Which one does Apple want to be? Can it be both?
  6. Finally, Apple's now fighting a two-front war -- it needs to keep acquiring customers but also retain its existing base. What we've seen lately are issues with the latter: the Maps fiasco, the stiff competition of Android devices, the threat of Windows 8. Sometimes largesse gets in the way of customer satisfaction.

What would your strategy be if you ran Apple today?

Topic: Apple

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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59 comments
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  • Nokia is the best example

    Not long ago it was the ultimate behemoth of cell phones dominating the world wide phone market. 5 years later ... it's a dwarf when it comes to smartphones. Without its great reputation in Asia it might already had even filed for bankruptcy.

    Apple undeniably has the advantage of a very attractive eco system that makes it hard to go to another platform like WP or Android. Unfortunately even an iPhone or an iPad eventually becomes a commodity while LV handbags and Gucci dresses never will.
    EnticingHavoc
    • Exactly right

      "even an iPhone or an iPad eventually becomes a commodity while LV handbags and Gucci dresses never will."

      The iphone can now be purchased for $0, brand new, in the store. apple is just another no name bulk manufacturing company, nothing premium about it. Meanwhile, harman kardon charges $600 for a CD player.
      toddbottom3
      • Oh Toddy!

        Only you can make this stuff up!

        The $0 iPhone is the older 4, everyone liquidates their inventory. Why scrap parts when you can throw them together for next to nothing on mature production lines when you could give a smart phone to a dumb WP user? While Apple does manufacture in bulk to meet the demand, they are currently focusing on 3 extremely well-built models. On the other hand there are companies such as Nokia flooding markets with crap products.

        Meanwhile, Harmon-Kardon remains a mid-fi company asking way too much for mediocre products. If you want true Apple-like high end, look at Krell; If you want low end WP8, look at Outlaw. They'll both get the job done, but you'll pay to get the premium Krell.

        You need to take your twisted logic off the web . . .
        Gr8Music
        • Liquidating inventory?

          "everyone liquidates their inventory"

          No, apple still manufacturers the iphone 4. And no, you will never see harman kardon selling old CD player models for $0. That's the difference between a premium brand name like harman kardon and a run-of-the-mill Walmart style company like apple.

          As for your whole quality rant, we aren't talking quality of the products, we are talking premiumship of the brand name. apple doesn't have a premium brand name, certainly not when it is selling its own products for $0.

          Why can't you just accept the fact that apple isn't a premium brand name. Does that make any of your apple products function less well? Does it hurt your ego?
          toddbottom3
          • Premiumship?

            I find it very hard to talk to you because of your twisted logic but I'll try again - point by point.

            Yes, the 4 is still manufactured FROM EXCESS INVENTORY PARTS using MATURE production lines. Translate for Toddy - they have lots and lots of old parts and can now build these things with their eyes closed after making 10s of millions.

            The $0 dollar iPhone 4 from Apple requires a carrier contract, just like the AT&T store. They want $450 for an unlocked w/o a contract. That is the difference between a premium brand like Apple and a wannabe company like H-K; Apple delivers the VALUE. Translate for Toddy - you are wrong.

            I can't even fathom what you're thinking about the "premium brand name" rant. I can say that I've personally seen several Apple logo tattoos, but NEVER a H-K, MS, Nokia, Kin, Zune, whatever. Ask Harley-Davidson, tattoos are the ultimate premium brand statement. Translate for Toddy - you need to get out in the real world more.

            In the entire Smartphone industry, Apple is the ONLY premium brand name; and Samsung is the low-quality leader. My Apple and Google products work well, not so much with the MS products. Why can't YOU accept that? It obviously hurts your ego . . . Toddy, you are twisted!
            Gr8Music
          • Too funny

            "Yes, the 4 is still manufactured FROM EXCESS INVENTORY PARTS"

            In other words, once those parts are gone, apple will remove the iphone 4 from their store? Too funny if you actually believe this.

            "The $0 dollar iPhone 4 from Apple requires a carrier contract"

            This is about brand premiumship. apple's brand is that of a $0 phone seller. That's what people think of. Again, you will never see harman kardon offer a $0 CD made from excess inventory parts. Ever.

            "I've personally seen several Apple logo tattoos"

            Now that really is funny. I've seen Twilight tatoos. Twilight is a premium brand now? Too funny that you believe this. In fact, I would contend that the moment you see a tatoo of a brand, that takes AWAY from its name brand premium.

            apple is not a premium brand name in any market. Why can't you accept that? Does it hurt your ego? Do your apple products function less well because they happen to be mass produced and available for $0?
            toddbottom3
          • RE: apple's brand is that of a $0 phone seller.

            Way to let your hypocrisy shine through. How many times have we seen you bash the iPhone for being over priced and we all know you will start on that rant the next time it fits bias yet you want everyone now to believe that Apple is thought of as the free phone company. Only you can make this crap up.
            non-biased
          • Todd the Genius

            So Apple is a no name commodity manufacturing company... I guess that's why the resale value of Apple products is 50% higher than the competition. Yeah, it must be that sloppy workmanship and cheap looks.
            prof123
          • You said it, not me

            "it must be that sloppy workmanship and cheap looks."

            I wouldn't go that far. apple hardware is okay. Average but okay. Not sloppy but okay.

            But I'm really sorry, you did not buy from a premium brand name company when you paid $0 for your product. I know you want to be cool because you own an apple product but there is a reason why Gucci doesn't sell a single $79 handbag. It would soil the name. apple has soiled its name with $0 iphones and $79 nanos.
            toddbottom3
          • Oh Toddy!

            Would you just look - the 8 GB iPhone 4, through the Apple, AT&T, Verizon and Sprint stores is $450! That is above $0. Apple hardware is brilliantly designed and manufactured. Average is Harmon Kardon - they sold-out they're name years ago, but unlike Apple, they also cheapened the product. Why can't you accept that Apple is a premium product designed for the discriminating customer while the Nokia/WP8 is an ugly, mass-marketed flop that will soon be in landfills everywhere (thank god it flopped before the 2nd production run).

            And just so you know, you really don't push my buttons the way you think. I feel it a duty to unveil your twisted logic to the newbies - the regulars already know you're full of crap! I'm sorry, does that hurt your ego? Does that make your Nokia/WP8 function as well as iOS or Android? Hell no it don't.
            Gr8Music
          • Funny because I just read this morning

            that an iPhone 4S with a shattered screen has a higher resale than a premium condition Galaxy S2. Not knocking the Galaxy, Samsung or Android, just thought it was fitting for this conversation.
            non-biased
          • They're not really $0.00

            You have to pay for service for 2 years, and trust me, you pay more for a new 5 than you did for the original iPhone. I work for a carrier, I know this is true. That said, apple gets more for a phone than most other manufacturers and they definitely have more control over the carriers than a Samsung. It doesn't make them better, but they have more clout. A lot more clout.
            notsofast
          • Re: apple still manufacturers the iphone 4

            How you know that?

            Plus, that $0 iPhone 4 (more than two year old product), is actually $0 when you buy it with two year contract ($50 a month, huh!). The unlocked iPhone 4 is $450.00 at www.apple.com.

            Good value, this more than two years old iPhone 4, when people do pay $450 for it, up-front. Any manufacturer would kill to achieve this!
            danbi
          • I understand that some don't like Todd, but at least see his point

            For years people called Android phones cheap, because they were free with 2 year contracts. It didn't matter then that those phones could be purchased non-contract for hundreds of dollars, because people judge phones by their contract price. That same standard still applies.

            A few years ago Apple was seen as premium due to its price as well as its early exclusive offering through ATT or the wait times after a product would sell out after release.

            Fast forward and Apple is being sold at discount retailers like Walmart. Anyone can get an iphone for free with a contract, which puts the iphone on the level of other free android phones. Apple released a "budget" non-retina small tablet that went against everything Steve Jobs said just a few years back.

            None of these are a knock on Apple, because they are very smart business moves. However anyone who cannot admit that these steps do not make the Apple brand appear less premium or exclusive are only kidding themselves.

            The Apple brand is still incredibly strong, but other brands are gaining ground and in some cases dethroning iDevices.


            P.S. It is just lunacy to think that Apple is only selling the iphone4, because they have some massive inventory of parts laying around. Apple is still selling the iphone4 to get customers who would otherwise chose a free android phone. Simple as that.
            Emacho
          • It's a real stretch to try to compair

            brand new phones you can get for free with contract to a phone that is 2 1/2 years old. You can't get the newest or even last years model for free. That right there is the difference and it's painfully obvious.
            non-biased
          • Try being honest for a change bottomfeeder

            Apple does not give away any of their iPhones for free. The cheapest iPhone you can purchase directly from Apple without a contract is the 2 1/2 year old 4 with only 8GB of memory for $450. That's a far stretch from free. Of course we all know that you can get a subsidized 8GB iPhone 4 with a carrier contract for free but Apple isn't giving away the phone, they still get a premium price from the carrier for the 2 1/2 year old phone. I guess it just chaps your @ss that AT&T alone probably moves more of these old iPhones than everyone combined can sell WP7/8.
            non-biased
        • False analogy

          There's nothing high end about apple, other than the price and on the iPad and some of the laptops high DPI screens (and those will become commodities soon enough). The internals of their PC's are nothing special. The iPhone is a nice product, but there are plenty of Android products that are at least as good.

          Yes, the free phones are the 4, but in some U.S. markets, the 5 sells for $150. If the 5s comes out this summer, the 5 will be $100 in most places.

          No matter how you look at it, Apple is not the equivalent of Krell. To be a Krell, the iPhone would have to come with the best NAND around. Instead, it's pretty ordinary flash.

          No, Harmon Kardon, Middle of the Road Yamaha, Onkyo or Denon is where Apple is at (and by middle of the road I mean it's not as good as the flagship models from most of these companies).
          notsofast
      • Toddbuttom3,

        harman who? Never heard of them.
        TimeForAChangeToBetter
        • You only serve to prove my point

          Who hasn't heard of apple? Nobody. It is a common name. Anyone can stroll into a store and buy an apple product. The nano is only a few dollars. The iphone 4 is free. $0. That isn't the sign of a premium brand.
          toddbottom3
      • exactly wrong

        ((( "The iphone can now be purchased for $0, brand new, in the store." )))

        You can only get an iPhone for $0 with a 2-year phone contract, which nets Apple $450 from the carrier. The same iPhone without a contract costs $450 outright. A current-model iPhone 5 costs between $200 and $400 with carrier subsidy, or $650-850 unlocked.

        Meanwhile, you can get a brand new 24-bit Harman Kardon CD player with HRS link on Amazon for $350.
        buddhistMonkey