Look what Apple has done over the past five years. They’ve completely restructured the smart phone industry since the iPhone was launched five years ago. Apple built and grew the nascent tablet industry with the iPad, launched just two years ago.
Year after year, quarter after quarter, Apple rings the cash register like few companies have. Ever. The company sits on about $100-billion, owns an 80-percent share of cell phone maker profits, and the stock continually flirts with record numbers.
How does Apple do all that? It’s easy. Apple uses a stacked deck.
By rolling out new products throughout the world on a carefully calculated, staged, and well timed process, Apple gets the most from revenue growth and profit growth.
Here in the U.S. we’re anxiously awaiting the so-called iPhone 5 while the rest of the world has just recently been handed the hot-selling iPhone 4S. The same scaled, structured roll out process was used to make the iPhone 4 the hottest selling smart phone ever.
The staggered roll out keeps the revenue stream growing at just the right time during the year, so that quarter after quarter Apple can produce record sales numbers.
The same methodology is used in the iPad’s worldwide rollout. First, the U.S. and a few other countries. The revenue growth begins. Then other countries get the new product line and the revenue stream continues and grows throughout the year.
Because the life span of a smart phone and tablet isn’t equal to the life span of a PC or Mac, Apple’s revenue gets a huge bump the following year when pent up demand for the latest and greatest takes over and another cycle of launch, and staggered revenue growth begins anew.
What’s the best selling smart phone ever? The iPhone 4, which is nearly two years old. What do most of those iPhone 4 customers want? The iPhone 4S? Nope. They want the iPhone 5, which is likely to see unprecedented demand.
Along with that demand will be Apple’s now infamous staggered roll out, timed perfectly so demand grows, revenue grows, profit grows. This rolling procedure is one which Apple executes brilliantly, quarter after quarter, year after year.
Even better, the last major country to get Apple’s new wares is usually China, which has hundreds of millions of customers moving steadily into the middle class. What do they want to show off their new socio economic status? An Apple product.
China’s growth is the envy of the world, and the only negative Apple seems to encounter (besides some bad press over manufacturing conditions) is a decided dearth of Apple Stores to display iPhones and iPads to China’s masses.
As China grows, so does Apple’s fortunes– revenue and profits.
The non-smart phone is going the way of the dinosaur and dodo bird, as smart phones take an ever larger share of the cell phone unit sales worldwide. Apple benefits in many ways from this staggered roll out of new products. It enables the company to meet or exceed Wall Street’s expectations quarter after quarter as new products are launched in an increasing number of new markets.
That’s how Apple stacks the deck, runs up the numbers, and keeps a stock price that’s an absolute bargain by traditional price to earnings ratios.