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Apple’s earnings shoot sky-high on Friday

by Kelly MacNeil on July 25, 2011

Apple recently saw its highest earnings to date on Friday, with shares up more than $6 on Friday, reaching an all-time high price of $371.06. The company is expected to announce its financial earnings for the second quarter on Tuesday and most economists expect that the numbers will paint quite a sunny picture. 

"People are coming around to the fact that Apple should be valued differently," principal analyst Rob Enderle explained to FoxBusiness.com. "Apple's been undervalued because it's been valued as a hardware company. It's really something different. It’s a different kind of beast."

One of the categories of product Enderle pointed to as a success is intangible, but revenue-generating all the same – peripherals. These take the form of annuities and contracts, which can be very profitable, because the payments become continual sources of income for Apple.

Not only that, Apple has managed to generate a broad following of loyalists who anticipate each and every Apple product with a passion that isn't found for competitor's products, whether that's Amazon's Kindle going against the iPad or any number of MP3 players that hang unnoticed in retail stores.

"The buyers are wedded to the product and the services and they can't and don't want to move," Enderle told the website. "[Apple] could almost give the hardware away and still make money off the services and the royalties off the peripherals like apps."

Investment writer Conrad deAenlle remains skeptical of Apple's long-term growth prospects. He writes on BNET.com that it will become harder and harder for Apple to have "repeat performances" that continue to beat forecasts, in part due to the increasing number of competitive products. He points to the fact that Google's Android is showing formidable strength against Apple's iPhone.  

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