‘Any argument that a pad is not a PC is simply out of sync,’ said Chiam. ‘With screen sizes of seven inches or above, ample processing power, and a growing number of applications, pads offer a computing experience comparable to netbooks. They compete for the same customers and will happily coexist. As with smart phones, some users will require a physical keyboard, while others will do without.’
‘Each new product category typically causes a significant shift in market shares,’ said Chiam. ‘Apple is benefiting from pads, just as Acer, Samsung and Asus previously did with netbooks. The PC industry has always evolved this way, starting when Toshiba and Compaq rode high on the original notebook wave.’
via Canalys reports global PC market growth of 19% in Q4 2010 (Canalys research release: r2011012).
Five years ago, back when Gartner and IDC were confused about what a smartphone was Canalys was on top of the market and was the first to correctly describe the smartphone.
Kudos for being first again to recognize a re-defined market.
The iPad and iPhone came, saw and conquered new markets. But since the products launched the question on every analyst’s mind has been on how much have these products “cannibalized” their brethren the iPod and the Mac.
This notion of “cannibalization” applies when a product is designed to compete and “eat” the share of another product in a company’s portfolio. It has some negative connotations since it implies loss but many times the thinking is that it’s better to cannibalize oneself rather than have it done by a competitor.
But have iPhone and iPad taken share from their competitors?
When looking at unique visitors as a proportion of population, this site is more popular in Finland and Canada than in the United States.
Very impressed with Singapore and New Zealand who punch above their weight. UK is second in overall volume. Honorable mention to Australia, Sweden, Norway and Switzerland.
It’s interesting to compare this list with Newsweek’s ranking of the world’s best countries.
- United States
- New Zealand
- United Kingtom
The correlation is uncanny.
As the highly profitable iPhone makes up an increasingly larger proportion of Apple’s sales, the overall gross margin would be expected to grow.
Sure enough that’s what’s been happening.
The gross margin percent, which measures the direct or variable costs of production vs. price, shows a healthy rise in the last five years from slightly below 30% to around 40%. The Operating Margin, which also includes the overhead or fixed costs like R&D and SG&A, shows a similar rise, reaching about 30%.
Margin expansion while sales quadruple is a good indicator that a company is producing real value not just trading sales volume for profit.
As shown in the Apple growth scorecard, the company’s earnings growth is continuing at 75% with the top line increasing at the annual rate of 70%.
The $59 billion of cash on the balance sheet has reached the equivalent of $64 per share yielding an enterprise value of $263 per share based on closing price of January 21st.
The stock price has been rising but not outside a narrow P/E band. The following chart shows the stock price and the 15 P/E and 25 P/E bands that have bounded it for nearly three years.