Market share v. profits

John Kirk has posted a terrific piece describing how large swaths of tech reporters seem unable to focus their “analysis” on anything other than market share. While Android’s world-wide market share is larger than Apple’s iOS, the higher market share is meaningless if the much higher profitability of iOS continues. After all, profits are the goal of businesses.

The article is worth a full read.

Disclosure: I am long AAPL.

Apple quote of the day

Apple took a major step forward by issuing debt and announcing it will return $100 billion to shareholders over the next three years. This is a vastly more shareholder-friendly capital allocation policy then where Apple stood a few months ago. We have added to our Apple position. Now we just wait for the release of Apple’s next blockbuster product.

David Einhorn, CEO of Greenlight Capital, who last month pressured Apple to free more of its cash hoard for investors.

Disclosure: I am long Apple.

Apple is number one in the US smartphone market

A new study from comScore shows that, during the first quarter, Apple is the number one manufacturer in the US, with a 39% share. Samsung is second, with a 27% share.

comscore_US_smartphones_march_2013

The value of a technology ecosystem

Apple has painstakingly built out a full-featured ecosystem for its iPhone and iPad iOS devices.  Why is this important? It seems that Apple is successfully luring more and more customers who buy into its ecosystem and will likely stay, once they have begun to purchase media and apps that run on the iOS operating system.

John Paczkowski, writing in All Things D, notes that, at least in the United States, this lock-in is increasing over time.  The entire piece is worth a full read, but here is a taste.

So, Android’s seemingly inexorable ascension over the iPhone? Not quite so inexorable anymore. Apple’s smartphone continues to gain share over devices running Google’s mobile OS in the U.S.; so much so that, according to the Yankee Group, iPhone ownership in the U.S. will exceed Android ownership by 2015. The reason: Platform loyalty.

Apple in perspective

If you follow Apple stock, you should read this essay by John Kirk. He does an admirable job of dissecting the true current and future performance of the company.

His bottom line:

If you look at Apple’s numbers for this quarter and the next, you might think you see a company in decline. But if you look at Apple’s numbers over the fiscal or annual year, you see anything but decline. Let’s put this in perspective: Would you rather have Apple’s profits or those of Google, Amazon, Microsoft or Samsung? Once you put it that way, the answer as to how Apple is doing becomes clear.

Apple dominates the most dominant tech sectors of our times. And unless I’m gravely mistaken, that’s a good thing. A very good thing.

Disclosure: I am long AAPL.