the company’s financial activities

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An Analysis of Apple’s Future Investment Value
Apple Inc.

is a tech company founded by Steve Jobs. It majorly does the design, production, and marketing of mobile phones, computers, and portable music devices such as its iPhone, iPad, and Macbook computers. The company also operates online stores such as the iTunes Store, iBooks Store, App Store and the Mac App store which it uses to sell digital content. Apple Inc. is one of the most popular and valuable brands in the world in the manufacture of innovative electric devices.
Apple Inc. has delivered impressive results to its investors over the years. It is a relatively successful company that generates a lot of cash flow alongside maintaining a sound balance sheet. Although Apple’s stock has been performing relatively well, it has recorded what may seem as its worst showing in recent times. In 2015, the value of the stock was at nearly $133 which it later fell to $92 then on the rise again to $124 after which a downward trend towards $90 per share is on track. Heading into the future, what investors are worried about is whether to buy, sell, or hold their stock. Apple’s iPhone sales have dropped from $70 million to $54 million in the same financial quarter as that of 2015 as shown in Appendix A. This fall in earnings has shown a slowdown which has led to a panic over the future of the company by its investors. However, things might still look up for the tech giant as the iPhone has proven it is still a major revenue earner after the release of its new iPhone 7. MacBook sales and Apple watch sales are also products that factor in to put Apple as a company with a solid basis although it may not be recording the growth that it experienced in the past.
An important consideration is that although Apple’s growth has leveled out and it may not see the growth it experienced in the past, it may not be a bad bet for a dividend investor. Apple Inc. generated a net income of about $10.5 billion which reflects about $1.90 per share. Basing this on its projected earnings, the amount of earnings that will be directed to pay its dividends is at about 23%. However, Apple is a firm that has a lot of cash less debt standing at $161 billion net cash position. With this current position, it would mean that even if iPhone sales fall to zero the company will still be able to pay its dividends for up to 14 years with minimal earnings. (U.S. News &Amp; World Report)
Apple Inc. has heavily invested in its research and development budget. It is projected that this spending will increase to $10million in 2016 which is a 30% increase from 2015. This kind of expenditure in research suggests that Apple has several products that are still in the research phase and enhancing the current iPhones, iPads and Macs for the future. But according to the size of this research budget, it may seem that they could be developing new products as well. There are rumors already that Apple could be venturing into the automotive industry. (www.investopedia.com)
Apple’s steady decline in growth is not a bad thing. It just shows that it has developed into a mature company such as what Microsoft experienced. This trend is the natural life cycle of any business. However, Apple still has room for growth a great future potential.

Appendix A

Figure SEQ Figure * ARABIC 1: Apple Quarterly IPhone Sale (Horwitz, Quartz)

Figure SEQ Figure * ARABIC 2: Apple’s Quarterly Revenue (Horwitz, Quartz)

Works Cited
“U.S. News &Amp; World Report.” U.S. News &Amp; World Report, U.S. News &Amp;WorldReport,money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/articles/2016-05-05/aapl-what-to-do-now-with-apple-stock.
www.investopedia.com/articles/investing/012716/apples-performance-2016-growth-value.asp./Horwitz, Josh. “Nintendo Finally Shared More Details on Its Long-awaited Hybrid Console and Investors Said “meh”.” Quartz. Quartz, 12 Jan. 2017. Web. 13 Jan. 2017.