Apple Inc. (AAPL): Is it Finally the Right Time to Take a Bite out of This Tech Titan?

Price/Earnings Ratio 9.60 25.36 17.24 3430.72 ~ 16.15
Price/Book Ratio 2.78 3.80 3.66 14.69 0.80 2.27

Balance Sheet

As of the second quarter of 2013, Apple possessed $144.69 billion of cash and cash equivalents and $4.3 billion of total debt, resulting in a net cash position of $140.39 billion, or roughly $149.33 per share. The financial strength the company possesses allows the company to pay out its 3.03% dividend yield and allowed the company to initiate its $60 billion share repurchase program recently.

Expanding upon the dividend, with a payout ratio of only 29.12% Apple can retain the majority of its earnings to finance the products of tomorrow (TTM Research & Development Spending: $3.91 billion).

Industry & Competitors

The handset, tablet, computer, and media player markets (all of which Apple competes in) are constantly evolving, with persistent innovation required for companies to remain relevant and popular. The ability of Apple to control all aspects of its product has long distinguished the company’s products from others, however recent offerings have been criticized for falling behind the competition (example: offering the larger screen size on the iPhone after Samsung had). The industries Apple operates in are among the most competitive in the world, with many of the largest companies in the world being concentrated in these waters. Major competitors include Google Inc (NASDAQ:GOOG)Microsoft Corporation (NASDAQ:MSFT), Inc. (NASDAQ:AMZN), and Research In Motion Ltd (NASDAQ:BBRY) BlackBerry.

Google’s Android operating system has long competed with Apple’ iOS for the spot as the premier smartphone operating system in the world. Additionally, many of the services Google Inc (NASDAQ:GOOG) offers rival those presented to Apple device users, as both companies attempt to lock consumers into their ecosystems.

Microsoft Corporation (NASDAQ:MSFT) competes most directly with Apple in the computer industry, as their Windows operating system rivals Apple’s OS X operating system. Additionally, Microsoft has recently partnered with Nokia Corporation (ADR) (NYSE:NOK) to begin producing smartphones, and the company recently entered the smartphone market.

Amazon’s Kindle Fire tablets have posed a serious threat to Apple’s iPad segment, and the success of the Kindle Fire prompted Apple to launch the iPad Mini. While, Inc. (NASDAQ:AMZN)’s core business is concentrated in the online retail sector, Amazon’s tablets, cloud services, and future products will compete with Apple.

Research In Motion Ltd (NASDAQ:BBRY) BlackBerry’s signature brand has been revived by the company, with the launch of the Z10; however, Blackberry has yet to make a sizable mark on the smartphone industry of today.

Looking Into the Future

After the passing of Steve Jobs, questions have been raised as to whether the company has lost its innovative touch, which has allowed Apple to revolutionize industry after industry. However, several opportunities are presented to the company to take advantage of in the future and products are rumored to be in the company’s pipeline. Apple recently released its radio streaming service, presenting a Pandora Media Inc (NYSE:P)-like alternative. Furthermore, an iWatch is slated to be released later this year, and while myself and many analysts do not expect this to be a major product, projections place this “smartwatch” as creating as much as $6 billion in revenue. The largest product in the company’s pipeline is the iTV, which is rumored to be a product that would revolutionize the television market. Television is one of the final industries Steve Jobs was attempting to revolutionize before his death, and expectations are sky-high for this particular product. Moreover, a cheaper version of the iPhone for emerging markets is anticipated, and would threaten Android’s dominant presence in emerging markets.