Apple Inc. (AAPL): Pros and Cons of Being an Owner

Competitive environment – Apple operates in an immensely competitive environment. The mobile computing market represents a lucrative new avenue for growth in the tech sector.

According to a Bloomberg article, IDC expects Google to exceed Apple in tablet market share. In 2013, the Google Android devices are expected to hit 49% market share with Apple commanding less at 46%. Even Microsoft’s Surface is expected to hit a 7% market share by 2017, eating a little more into Apple’s pie.

Lower growth momentum – Apple’s overall sales growth of 18% exceeded Microsoft’s tepid growth of 3%. However, Google won the growth contest with 36%, partially explaining its recent run up in stock price.

Conclusion

On the whole, pros outweigh the cons. Apple possesses a super balance sheet with plenty of cash and no debt, making it possible for Apple to continue its current dividend. The shift to the mobile computing paradigm and away from PCs will continue to drive the demand of Apple’s iPad and iPhone. However, it will also drive the demand for the tablets and smartphones of Apple’s competitors: Google and Microsoft. Moreover, Apple’s dividend capability remains intact with rumors of hope for a boost in payout.

On the minus side, its product pipeline remains a mystery. Tech consumers need new products to hold interest. This indicates a slowdown in growth. With this said, Apple status will move from a high powered “growth” stock to a more value oriented “income stock.”

The article Apple: Pros and Cons of Being an Owner originally appeared on Fool.com.

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