Yet, the stock has continued to decline in recent weeks in tandem with the broad-based market selloff following the Fed's warning of further policy tightening to tame inflation, which has heightened market fears of a structural economic downturn ahead.īut Apple's consistent track record of outperformance and resilience as observed in recent quarters is expected to persist. The following analysis will dive into Apple's unwavering brand power, its growing iPhone installed base, and strong balance sheet - the three critical inputs to sustaining longer-term upsides for the stock. Brand PowerĪpple has built a robust brand over the years with the successful launch of a key slate of devices spanning music players, smartphones, smartwatches, and audio devices that have time and again disrupted and overtaken market share from traditional predecessors. Not only is the brand's success built on its reputation for quality, but Apple has also gone out of its way to ensure seamless integration across its broader ecosystem of offerings to ensure returning purchases, which is critical to offsetting the years-long lifecycle of many of its products (e.g. And this has continued to set the core foundation for its brand loyalty across global households, underpinning a certain level of guaranteed success whenever new products / services are launched (remember last year's frenzy on the $19 Polishing Cloth?) average iPhone upgrade cycle is approximately three to four years average Mac upgrade cycle is approximately five years). While Apple has typically maintained a tight-lipped approach on projects in the works, with no significant pre-launch marketing until the moment a new product is ready for sale, its brand reputation has always come through on securing demand. And the same is expected for the highly anticipated slate of new segment launches over the near- and longer-term: Apple Watch Pro The Apple Watch has played a critical role in boosting Apple's Wearables, Home and Accessories product segment into the size of a Fortune 120 company in the few short years since its launch in 2015. With continued improvements made to the wearable device, including a wide array of health-centric features spanning Heart Health tracking to fitness offerings, the Apple Watch has quickly become an industry favourable, dominating the smartwatch market with close to a 40% share of global sales. The much anticipated launch of a heavy-duty version of the smartwatch - or Apple Watch Pro - at the upcoming Far Out event targeting athletes is expected to further Apple's market share in the segment, and overtake extreme sports and outdoor technology rival Garmin's ( GRMN) leadership in the premium tier "for models that cost $500 and up". Although Apple has yet to provide any official confirmation on the Apple Watch Pro's debut, much of the software updates provided during this year's Apple events have already "laid the bread crumbs" for what to expect:Īpple has been ramping up investments into development new technology offerings for its wearable products in recent years to address increasing user focus on health and fitness features. The company has introduced the "Sleep App" during WWDC 2022, a highly requested suite of features by Apple Watch users. The Sleep App encompasses offerings such as heart-rate monitoring and sleep stage tracking to generate real-time data on a users' sleep patterns. The company has also enhanced its Heart Health offerings, including the introduction of "AFib History", which keeps track of atrial fibrillation detected through the Apple Watch to help users and health providers pinpoint certain heart issues.
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