Apple's Long Term Growth and Shareholder Value

Apple Inc AAPL has undergone tremendous growth in the last ten years on the basis of releasing products that have resonated well with consumers. While Apple's dominance of these new markets through products such as iPods, iPads, iPhones etc has been impressive, the area that I foresee the most stable growth for Apple in the future is increasing its share in the consumer PC market and more traditional technological markets that it does not traditionally have a strong presence in. According to Pingdom, Mac operating software currently has a 15% share of the US PC market. This is certainly impressive considering where the Mac brand was ten years ago. However, I foresee the Mac brand challenging Windows for PC dominance ten to fifteen years down the road. I foresee this happening based on personal experiences of mine that have highlighted how Apple has changed the dynamics of the PC market and how these changing dynamics combined with Apple's strong culture of innovation offer Apple the opportunity to grow even faster than it has been. Last year at my university, the business school students in my year had an informational meeting with a recent graduate who was currently working for Microsoft. Coming to the university for the speech, he wasn't there as a Microsoft representative, but was simply there as a favor to the business school and to help answer any questions students may have had. During his talk he went over a number of things including where he saw the future of computers going and how companies including Microsoft were going to have to improve. During this section of his speech he stopped and asked for an informal poll of students' preferences on Windows based computers vs. Mac computers. The outcome was not even close, with a large majority of students preferring Macs, the alumni responded with a chuckle and saying that he was going to have to invest in Apple. He went on to explain himself as he felt the students in front of him were the future leaders and decision makers within the business world. And if we had so markedly shifted to and embraced Mac's, the larger market will catch up with the market shift among my generation when we graduate. I was reminded of this experience a couple of days ago when a similar situation arose. I was sitting in a large lecture hall and my class had a guest lecturer who hadn't taught in a number of years. Midway through the lecture, the professor stopped and pointed out that almost everyone in the class had a Mac laptop and how it had changed so much from when he was a regular lecturer. He went to point out that as we, in his words, join ‘the real world' we would bring our consumer habits to ‘the real world' and the market was going to undergo a massive shift. While these experiences are not scientific, they illustrate the vast potential that Apple has going forward. Apple has successfully captured the loyalty of students like me and as we enter ‘the real world' and have more disposable income, Apple will be able to leverage this for higher growth sales in different markets. Going forward, Apple has the potential to grow in more traditional technological consumer product markets instead of only being able to challenge for market leadership in newer technology consumer markets and thus give shareholders even better returns.