How Wall Street undervalues Apple’s sticky moat
July 2, 2018 by Steven M. Peters
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.
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