While facing increasing competition, this innovative company is known for:
1. Retaining large market share
· CEO Tim Cook is not pursuing market share at all costs, saying, “Our objective has always been to make the best, not the most.”
This is good when you consider that their iPad market share was 100%, so the only way to go is down.
2. Providing high profit margins, AND
· Even though it trails Android in market share, the iPhone is far more profitable now. The market is bigger, and Apple maintains higher margins than all competitors.
3. Increasing stock price
· Huge cash reserves (should they distribute more to shareholders?).
· Valuation based on the present value of expected future cash flows.
Is the forecast of Apple’s expected future cash flows accurate?
