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Apple Inc. (AAPL): What’s Next?

I believe that acquiring Nuance Communications Inc. (NASDAQ:NUAN) would benefit Apple, since they are already heavily involved in voice recognition technology with Siri. Also, I believe that Apple’s name and marketing expertise would provide a huge benefit in the long-term development of Nuance’s impressive  products.

Corning Incorporated (NYSE:GLW) is an innovative, global company that is the world leader in specialty glass and ceramics. Corning operates in five business segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials, and Life Sciences.

Corning Incorporated (NYSE:GLW)’s specialized glass products, which are used for a wide variety of applications including smartphones and TV’s, would provide an immediate benefit for Apple, especially if Apple becomes successful in the TV business. Corning Incorporated (NYSE:GLW) has been providing innovative products for 160 years, and I believe that their strong R&D division would compliment Apple’s R&D efforts nicely.

Some of their business segments, such as environmental technologies and life sciences, are areas that Apple Inc. (NASDAQ:AAPL) has never been involved in. However, it was not very long ago when the telephone industry was also a business that Apple had never been involved in, and I would have to say that it worked out just fine!

The Foolish bottom line

Recently, Apple has become a victim of its own success. Over the last five years, its net income grew from $3.5 Billion to $41.7 Billion, which raised expectations to very high levels. Although this remarkable level of growth is simply not sustainable, I believe that steady, more moderate growth will be achieved going forward.

I do not know which direction Apple is heading towards next, but I believe that there are some phenomenal developments in the works, such as the rumored Apple TV or perhaps a life-changing product that none of us are aware of that will knock our socks off.

Apple’s current P/E is only 9.7 and the dividend yield is 2.5%. With a payout ratio of only 12%, Apple Inc. (NASDAQ:AAPL) could significantly boost the annual dividend if they choose to do so. I believe that this is a very attractive entry point and I highly recommend opening or adding to a position in Apple as part of a diversified, well managed portfolio.

Greg Williamson owns shares of Apple, Nuance Communications, and Corning. The Motley Fool recommends Apple, Corning, and Nuance Communications. The Motley Fool owns shares of Apple, Corning, and Nuance Communications.