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Apple Inc. (AAPL)’s Decline and the Opportunity it Provides

This isn’t even taking into consideration the products. iOS has been hailed as perfection, while Windows 8 has received more complaints than any of the previous Windows operating systems. Apple sold 34 million iPhones in the last quarter, while Google Inc (NASDAQ:GOOG) Android accounted for 156 million phones. Apple increased its market share of phones by 1.4%, to 39.2% in the time between January and April.

The reason Google Android has such a large market share (45.9%) is because they provide operating systems to LG, Motorola, HTC, and Samsung. Apple, however, makes more money per phone. Apple has a 70% profit margin per iPhone, and sells around 48 million iPhones. At an average price of $300 per iPhone, Apple takes away $210 per iPhone. $210 times the 48 million iPhones sold is 10 billion dollars from phone sales alone.

Android may have a large share of the market, but this isn’t to say we should count Apple out for future products. The way Apple is run has always been “different,” and they have a track record of coming out with products that revolutionize markets. They aim for the emotions, and their most recent commercials exemplify that. “The experience of a product, how it’ll make someone feel. Will it make life better, does it deserve to exist?” (quote from commercial). I can’t imagine comparing Apple products to those from Microsoft and Google after that commercial. Apple is saying that Google’s Android may have a larger variety of products, but Apple makes products that “deserve to exist.” That’s bold.

Anything’s Possible With an Imagination (And 130 Billion Dollars)

Google has begun developing self-driving car, so will Apple jump in on the high tech automotive industry as well? With almost $130 billion in free cash, Apple has the power to launch into any market it wants to.  With such potential comes great responsibility, but we all know that, “Until everything we touch, enhances each life it touches. Only then do we sign our work” (quote from commercial). Apple has been very expensive for a long time, which means that this dip could be the time to buy. An quick look at Apple and its competitor’s SEC filings shows that Apple is cheap. Get on board this train while you can.

The article Apple’s Decline and the Opportunity it Provides originally appeared on Fool.com and is written by Joel Wasserman.

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

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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