How Wall Street undervalues Apple’s sticky moat

Print Email

Friend-of-the-blog Fred Stein counts the ways:

While many analysts look at Apple’s 15% share of smartphone shipments, they miss the total iOS/App Store ecosystem.

  • First: iOS devices software updates propagate rapidly.
  • Second: Adjacent OSes, mainly watchOS, tvOS, and soon macOS with AppKit/UIKit are un-matched anywhere (not to mention HealthKit, HomeKit and kits to come).
  • Third: The App Store delivers the highest ROI because of the first point above and Apple’s more prosperous user base.
  • Fourth: Apple’s iPhone installed base is about 20% (vs. 15% of shipments).
  • Fifth: Strategic partners such as Cisco and IBM will make iOS the standard in the enterprise.

Combined, that’s a deep moat. A corollary of the above is that seasonal and cyclical variances in iPhone shipments have no bearing on the ecosystem’s strength.

Note: Originally posted as a comment on Apple’s June: What a month.

My take: Yup. It’s not that iPhone shipments don’t matter, it’s that minor variations from one quarter to next don’t amount to a hill of beans in this crazy world.