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Technology Stocks : Apple Inc.
AAPL 271.06-1.0%3:24 PM EST
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To: Ryan Bartholomew who wrote (165317)2/4/2014 3:20:56 PM
From: pyslent  Read Replies (1) of 213177
 
Under that scenario, Apple would throw in the towel on trying to combat their dwindling global share and they would hunker down and focus on maintaining profits from their loyal base (which is willing to keep paying the premium).

This is already what they are doing now, the strategy I called "business as usual," when the 5C was announced. They can try to expand their addressible market, but they haven't yet, and what we've seen is that the current addressible market has nearly flatlined outside of carrier launches. But flatlined does not mean declined. What makes you think that selling into Apple's addressible market can't generate 150m in annual unit sales indefinitely? With your $15/sh projection, you are saying that the "loyal base" represents only a small fraction of Apple's current base (about a 3rd)? I agree that the premium market could shrink as a fraction of the whole handset market; I couldn't put a number on how much, but I wouldn't guess by more than half in the foreseeable future.
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