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Apple’s Growth Scorecard

Apple’s Net Sales grew at the rate of 30% in the last quarter. Earnings per share grew at 47%. Both of these figures are the highest since 2012.

Screen Shot 2015-02-08 at 5.27.47 PM

It should be noted that although the rate of growth is extraordinarily high, the company never actually stopped growing in the past three years. As the table above shows, net sales has always had positive growth.

Compared with the fourth calendar quarter of 2011, Apple’s sales are 61% higher and earnings per share are 54% share.[1]

This degree of growth at this stage in the history of the markets it participates in is a revelation.

Consider:

  • The PC market is more than 30 years old. In this mature market the Mac has been outgrowing the Windows platform for 34 out of the last 35 quarters.

Screen Shot 2015-02-08 at 5.35.43 PM

 

  • The iPhone was announced eight years ago and it still managed to grow at the rate of 57%.

Screen Shot 2015-02-08 at 5.47.11 PM

  • The market shares of its Mac, iPhone and iPad products are all remarkable only for their paucity.
  • The pricing of all their products is more than double the median for their categories.
  • Regardless of extreme growth, pricing power, headroom and, most importantly, customer loyalty, the company’s prospects are seen as dismal in contrast to its underperforming peers.[2]
  • Such is the plight of the anomalous.
Notes:
  1. Some of the expansion in earnings per share is due to the willingness of shareholders to sell their shares to Apple. 10% of the shares around in 2011 have thus disappeared. []
  2. As measured by P/E or FCF/EV ratios vs. direct rivals, technology companies or the S&P 500. []
  • berult

    “@asymco none of you should be analysts. Drawing incorrect conclusions from the chart. It shows Appl’s lack of diversity. Appl is Phone”
    Tony Spencer
    @mobiletonster

    Looking at Apple’s overall business proposition, and the consumer’s response to it, you could draw one of three conclusions:

    -Apple is all phone, smart apart,

    -Apple is all smart phone, till death do us part,

    -Apple is all smart, phone apart.

    Only one of them pays, in real transactional currency, due respect, for respect is overdue, to the conspicuous timelessness of genuine, human interactions.

    Which one might I suggest it’d be?
    berult.

    • gprovida

      Apple was defined as all Mac, then all laptop, then all iPod, now all iPhone, wait a few years and it will be something else.

      • jeff

        True. And I’m not sure how having one killer product that people love and are loyal to is a bad thing. – especially when it isn’t in monopoly or even in majority market share position.

        Exxon Mobile is pretty dependant on one product too, yet they do ok. And they’re not even in a position to diversify, or control product and supply chain innovations remotely as much as Apple can and does.

      • r00fus

        > And they’re not even in a position to diversify

        This is untrue. They could have been pushing solar, nuclear or other energy technologies. They are drunk on their main product and can’t see the future that’s being built around them.

    • Childermass

      Skin deep is as far as they go
      Epidermal forensics not subcutaneous flow
      Phrenology and alchemical tricks
      Quackery needing subliminal clicks
      Horace’s clarity, berult’s opacity
      Enlightenment

    • katherine anderson

      -Apple is all smart, phone apart.

      • berult

        Apple is conceptualizing, out of legacy intuitiveness and a deep understanding of the notion of calculated risk-taking, artificial intelligence as a logical offshoot of the consumer’s increasing smartness. The modus operandi here is to stretch a single mind’s Dominion into forcing it to neural-network outside its own organic boundaries.

        Counter-intuitively… bottom-up networking into a top-down empowering engine; a feedback-looped perpetual engine well within humanity’s core integrity. Thus fear of the unknown…AI running amuck…becomes a factor only if one fears oneself as a person, and as a person in a self-taught collective.

        Smart, period.
        berult.

      • katherine anderson

        Quite apart from smart, Apple is leading the way in Business as a new form of Art – jesting apart

  • http://www.isophist.com/ Emilio Orione

    AAPL is all phone?
    The iPhone predominance in Apple charts is undeniable, the iPhone success is astonishing but if you look at the other business each of them is a great success able to be in Fortune 500 all by itself.
    With Mac Apple is the best pc maker by profit share and Horace show is growing success against pc.
    App store is bigger than Holliwood to put it in perspective, the iPad is the dominant pad by every metric with more than 70% market share and greater profit share. Even if it is declining cannibalized by iPhones it is a big business that is just getting started to revolutionize working and studying.
    The iPod is falling and is not developed anymore but still it sold 4 million pieces if I remember right, not bad, with likely 90% market and profit share in its market.

    You can have the doubt that Apple will favor iPhone against other products since it is so predominant in Apple’s profit, but that wouldn’t be smart long period thinking and Apple is perhaps the best company in long term vision and I don’t believe this is gonna happen.

    • Space Gorilla

      The iPhone is a computer that happens to fit in your pocket. That’s been obvious since it was launched in 2007. I saw it and thought, “Wow, it’s a Mac in your pocket.” And my family bought a bunch of AAPL stock soon after, that’s how much I was convinced of its long term success, based on one ‘aha’ moment, that it was a computer. We’d all do better understanding Apple if we think of the iPhone as a computer.

      • http://www.isophist.com/ Emilio Orione

        I completely agree, Apple is a computer company and they make computers of different characteristics and size, from the Mac pro to the wearable iWatch.
        Everyone that thinks to the future of Apple looking at the future of the phone market is in mistake, the market of Apple is computing and in this period of time pocket computing is the most profit segment of computing but whatever segment will be in the future Apple will be there. Probably not as first entrant but surely as the one to beat once entered.
        The market of computing has not a foreseeable limit, software is eating the world, there will be software flexibility in everything we use and that software will run on ad hoc hardware and companies able to grow ecosystems and able to make the heavy investments required will be on top of the next big thing.
        Apple you know is doomed but the market it lives in is not.

      • Space Gorilla

        I think the pocket computer (iPhone) is going to be the most popular device for quite a while, it’s a very good combination of size (large enough for a good-sized screen and lots of computing power) and portability. I see the iPhone as a kind of computing engine that will drive a number of accessories (Apple Watch included).

      • http://www.isophist.com/ Emilio Orione

        Many see Apple Watch as an iPhone’s accessory for me it’s not, it’s a wrist wearable computer, a new category.
        Yes it only works with an iPhone, that’s a due to current battery limitation but that will cease as soon as technology improves.
        In a way the iPhone is an accessory of the watch since it preserves watch battery making the heavy lifting, but you can use your watch computer without the iPhone.
        It has to be seen the size of the market for watch computers but it is a computer device with it’s own use cases.
        In this way I see also Apple TV, Apple list both the TV and the watch as accessories but the TV is a computer dedicated to digital audio and video reproduction that does not need an iPhone to do it. It is a home TV computer, a new category.

      • Space Gorilla

        I agree, these are all computers. And certainly the Watch will grow in capability. I do see the iPhone as the engine that drives some of this computing power, and in that sense you’re right, it is a kind of accessory. Hmm, we’re almost getting into a kind of distributed computer, each piece handling its own set of Jobs-To-be-Done, which sort of gels with what I call the Apple Network of Things.

      • http://www.isophist.com/ Emilio Orione

        In this sense the gluiness of the Apple ecosystem is growing both in hardware, software and services.
        The Apple doomers should consider that ecosystems will grow not only in apps and services and accessories but also in hardware parts that complete each other device.
        In a few years switching ecosystem will imply so more work and money that the more spending users (the ones that buy more things that get together) will be tied.
        So when the switch war will begin it will be already won.

      • Space Gorilla

        Yes, well said.

  • iObserver

    Excellent analysis Horace, thanks for the update.

  • Jeff

    The thing That disappoints me most about Apple’s massive success under Tim Cook is…

    Rarely now do I get to hear the comment or am I asked, “But how is Apple going to do now that Steve Jobs died?” to which I have been universally replying, “Let me ask you a question… How do you think DisneyLand is going to do without Walt Disney?” (I know The Walt Disney Co. Is much more massive in scope than DisneyLand, but I live in the Western US where the simple question paints the proper picture and immediately invokes the ‘Aha Moment’ I’m aiming for.)

    There has never been a time when some unqualified pundit couldn’t find supposed cracks in the Apple empire, which would inevitably lead to its demise. Apparently the unprecedented success of the iPhone is the next sure sign of doom. I mean, how could a company with such a widely popular and profitable product ever be expected to succeed? LOL

    • Jeff

      Next year will be 50 years since Walt Disney passed. So – far so good…

  • adam_hartung

    As Forbes pointed out just last week, there is quite a bit behind Apple’s prolonged growth besides “smartphones.” The installed base growth and enhanced functionality has built the largest mobile developer community, which when prodded by increased infrastructure from beacon sales drives more apps, which when coupled with enhanced software capability such as ApplePay creates a virtuous circle of ongoing profitable sales growth for Apple http://onforb.es/1CFl0kH

  • bloftus

    While Apple is undervalued compared to its peers – it has doubled in value in the last 3 years against a rise of “only” 54% in EPS. So at least it is less undervalued now than it was 3 years ago.

  • JoeG

    The basis of Apple’s success is not the “smart phone.” This is the analysis of a simpleton.

    Apple is winning because they make the best micro computer–with the only commercially successful 64 bit processors, with the best operating system, with the largest third party software support, with the largest online music and video catalogue–which also happens to make phone calls and take great pictures.

    In fact, Apple arguably makes the best computers, period (iMac, iPads, iPods, iTV, and soon to be iWatch). And they know how to make money from making computers, real money.

    When the next new computer comes out, perhaps in the form of a “smart cars” or “smart robots”–be assured Apple will be there. They know how to do it.

    • art hackett

      Speaking of Apple “cars”, they don’t need to build an actual car, I suspect they might be rebuilding its technology. At least this way, car tech won’t be 15 years behind. Before the rebooting and Genius Bar “jokes” are typed, I’m only suggesting the non drivetrain and braking areas, the interface parts the auto makers never seem to be able to get a handle on. The amount of cameras and sensors on the test vehicles it’s claimed they are running suggests much more than just phone and media interfaces though.

      • http://www.asymco.com Horace Dediu
      • art hackett

        I’d like to imagine it’s possible as the whole automotive paradigm is well overdue for disruption, not to mention the appalling waste of resources.
        Another iPhone style revolution would be phenomenal, and maybe even possible as the entrenched would never see it coming – frogs, boiling water, etc. Maybe the iPhone is giving Apple the resources to attack this incredibly huge and critical problem.

  • H. Jackson Kumaasi

    Apple is an innovation company. Write that down. And not just product/service innovation. That’s just the head fake. Manufacturing excellence, design processes, supplier relations, supply chain elasticity — and a slew of other areas where they are competing only with themselves. The elements that customers never see but about which Apple is obsessed anyway. Top to bottom innovation.