Apple Inc. (AAPL): This Mythical Stock Seems to be in Troubled Water

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A major differentiating factor between Apple Inc. (NASDAQ:AAPL) and Samsung is that the former concentrates on high end products only, which sidelines a very dominant market; the developing countries’ middle class population. This is where Samsung’s array of phones at various price points gives it an edge over Apple and a strong foothold in emerging countries where people are gradually switching over from feature phones to smartphones. Samsung’s strategy is clear as it is working by all means to dominate this segment of the market, and or this very reason; it is coming up with Mini versions of its flagship phones too.

A company with nothing to lose

Research In Motion Ltd (NASDAQ:BBRY)’s failure to innovate with the changing need of time had put it in a back seat. The company realized its mistakes and in the beginning of this year came up with a new operating system – the BB10 and a revolutionary touch phone – the Z10 which were both well received by the market. Further, BlackBerry’s Q10, its QWERTY smartphone, was launched recently and has also been appreciated. The Q10 stands apart as after a long time a non-touch smart phone has come up in the market.

BlackBerry’s enterprise customers and phone security make it stand apart. If the company keeps its focus on security, it will gain more and more government and enterprise employees as its customers and that should add stability to its top-line.

Financially too the company appears very stable. Currently, its net assets are worth $9.5 billion, which exceeds even its market cap of $7.4 billion. Further with a net working capital of $3.4 billion, its current liabilities are also well financed. The company’s balance sheet is free from debt, so there aren’t any major cash outflows in the future. As long as the company is able to keep the current momentum going and keep on adding new products, it should add value to investors’ portfolio.

Final words

In the technology industry, being innovative and moving ahead of competition is the key for success. Samsung has well understood the changing needs of the market. It realizes that future growth will be coming from low priced phones and emerging markets and is thus effectively focusing on them. Samsung is a good bet with a long-term perspective.

The article This Mythical Stock Seems to be in Troubled Water originally appeared on and is written by tarun bachhawat.

tarun bachhawat has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. tarun is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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