Apple has beat its own record high of both closing share and intraday trading from April 2015, through a three-pronged approach of buying back shares, strengthening its services division, and relying on its flagship model – the iPhone. The all-time high closing share price is now $133.29 and intraday trading record is $134.54.
It is a golden period for iPhone application development companies, as investors line up to avail their services for the most happening revenue-minting device in the market – the iPhone.
A contradictory phenomenon
This sudden leap from the trailing stock figures from late 2015 onwards till most of 2016 has taken the financial markets by storm. Trade pundits are at a loss to explain these gains despite the recent slack in iPhone sales. However, it might be the trade pundits and financial specialists themselves who might have contributed heavily to the staggering all-time high figures of February 2017.
How Apple’s all-time high record is driven by financial specialists
Financial specialists have decided to pitch their weight behind the now industry-veteran Apple and desisted from writing the stock off despite the stagnant iPhone sales figures since the last two years. This, and the constant public conversations held by the CEO Tim Cook – outlining Apple’s growth plans in the service and device industry, have held the market steady till the tech-giant bounces back with its latest offerings – the 10th Anniversary iPhone!
Let’s have a look at how Apple held its fort and even hit an all-time high with the help of financial specialists:
- Massive buy back drive.
Apple has been on a buy back spree since September 2015 and has managed to buy back 6% of the total market shares. This basic step has sent the market into a tizzy as there are fewer Apple shares that can be ‘bought’. If this drive continues at the present rate, the shares are even predicted to rocket to $160. Although, it must also be noted that where this increases the individual share price, the present market capitalization is still $75 billion less than the high.
- A planned expansion in services division.
With over a billion iPhone devices owned by consumers, Apple is practically sitting on a gold mine where exclusive pay-on-stream services like Apple Music, iCloud, App Store, etc. This also indicates a huge revenue leap for the iPhone application development companies that cater to such service apps.If the 18% growth in 2016’s December ending quarter amounting to $7.2 billion in revenue is anything to go by, Tim Cook’s claim of doubling the services revenue in the next 4 years seems entirely plausible. The necessary steps in that direction are already being taken with Apple Music subscription service set to broadcast 2 exclusive reality TV shows. Speculations are rife over Apple needing to (and planning to) acquire a content company (like Disney!) in order to achieve its $48 billion target.
- Buzz around the new iPhone, and renewed interest in the existing version.
After recovering from the near fiasco post iPhone 6 spike in 2014-15, Apple has been stabilized at a point where 2/3rd of its revenue still comes iPhone sales. The recent holidays have boosted iPhone sales of the existing versions, as some customers have opted for the present iPhone instead of waiting for the promised iPhone 8 (or, if sources are to be believed – iPhone X, touted as the 10th Anniversary version).
It is important to note that iPhone sales had last seen a record high when it launched iPhone 6, which was a revolutionary version considering the large screen sizes and new connectivity options. Since the subsequent versions (iPhone 6s, iPhone 6s Plus, iPhone 7, iPhone 7s plus) have more or less maintained the look and feel of iPhone 6, the sales figures were stagnant (even declining) in the last year.
Banking on the same formula, and capitalizing on the 10th Anniversary hype created by financial specialists, Apple is said to be working on cutting edge technology like its patented full face display, 3D image capturing, etc. to come up with an iPhone that does justice to its primary revenue source – the device!