Newsflash: technology market analysts are bullish on Apple.
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.
- Isn't Apple already a premium, branded consumer company? Wasn't it before it ever experienced its massive growth?
- 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.)
- 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.
- 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.
- 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?
- 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?