The world we are living in is constantly changing; it is a world of inventions; of new developments and we have to keep pace with these moving times. Hence it is but natural to be expected of leading and novel technology stocks to perform well in the markets and reap good corporate earnings due to the same. Apple Inc. (NASDAQ/AAPL) is one such leading technology stock; the brainchild behind the popular “iPhone” and the “iPad” that have harvested corporate earnings of significant proportions.
Unlike many other technology stocks that have done little to venture out of their comfort zone of known products and sectors, over the years Apple has grown by leaps and bounds and undergone many a transformation to create a niche for itself as one of the most innovative and force-driven companies that is undaunted in taking risks and exploring unknown territories, where other technology stocks have already established themselves as pioneers in the field. It is highly commendable that through its products, Apple has successfully managed to gauge the customer-requirements and bring about a revolution in the market outlook of the consumer. Indeed, Apple holds the upper hand in such aspects amongst its peers of technology stocks! No wonder then that this firm operates at higher profit margins and nets a generous share of corporate earnings.
Consider the iPod, for instance. MP3 players were already established concepts brought about by technology stocks in the industry. What Apple did was, it redefined the looks and feel of the MP3 player and placed it on such a flattering pedestal that its (iPod) ownership gave one a sense of pride; a cut above the rest. When a technology stock can thus be distinguished in a swarming market place, it points out to an availability of higher margins and in turn, paves way for greater corporate earnings. Apple has not stopped at that. It is reported that the busy firm is now in the process of developing a new set top box that will simplify the viewing abilities for TV programming. It is to be expected that Apple will provide a ‘Midas’ touch to the TV interface, just as, by cleaning and simplifying the MP3 interface, it transformed its looks and feels as compared to other technology stocks.
Presently a majority of the cable companies offer an interface that is not user-friendly. But if a streamlined version is made available, it would work wonders and in all possibility, lead the way for good corporate earnings. Rumors say that the device would also have the capability to store TV programs on the internet; to be viewed at any time. And it would not come as a surprise if Apple took the initiative and packaged such services as mentioned above, to integrate and stream the saved TV shows to the iPad! And of course, there will be a much greater possibility that the corporate earnings will escalate due to this greater integration.
If we consider that the rumors are correct, it is most likely that Apple is presently in talks with the cable companies; asking them to offer this box to their customers. This could prove to be a boost to the corporate earnings, considering that there are a number of cable operators in the U.S. Not only will the set top box sell like hot bricks, but Apple will be able to cross-promote its whole catalog of media offerings. This one incorporated system, “iTunes” comprises all of Apple’s products; effectively rendering other technology stocks and their corporate earnings almost motionless. The reason is that if a consumer already owns all of Apple’s products, that means he/ she has complete faith in the firm’s offers and will, in future too, rely on those products of the firm rather than on that of any other technology stock. Thus Apple has the ability and the vision to collect its customers, keep them and grow and expand with their expanding numbers!
Of course, there are certain obstacles that these rumored plans may have to encounter, such as requirement of entertainment companies to add to the above arrangement. But it is not the success or the failure of any one product that needs pondering over. Whenever technology stocks take risks, there are chances of acceptances as well as rejections. It is only when a new product creates waves in the industry that its resultant corporate earnings touch a new high ceiling that any other previous experiments of the like are completely over shadowed by comparison!
The crux of the matter that Apple teaches us is that not only for technology stocks, but for any company as well, maintaining and growing corporate profits requires constant novelty, improvement, modernization and exploitation of new avenues and products. This comes as a bit of warning to those whose investment portfolios speak of firms that are constantly dabbling in their own familiar zones. It is time to move on and choose those technology stocks whose managers have a quest for treading unfamiliar grounds and landing laudable success thereon; reaping the sweet ripe fruits of sizeable corporate earnings!