Apple's Orchard Is Expanding
The tech giant's ability to continuously produce quality products and services will allow the firm to broaden its user base even further and build on its competitive advantages.
The tech giant's ability to continuously produce quality products and services will allow the firm to broaden its user base even further and build on its competitive advantages.
The Morningstar Minute is our quick take on investments, the market, economic indicators, and more. Join us every day for fresh insights from our analyst team.
Brian Colello: There are always a lot of fast-moving industries in the tech sector, but underneath all the news of new devices, we think companies are creating more sustainable competitive advantages.
We think Apple is a good example of a company with a widening moat. It has a narrow moat and a positive moat trend in our view. Historically, in the handset business companies like Nokia and Motorola were leaders, but customers were able to switch back and forth because all of the devices did the same thing.
Apple is doing a much better job than handset makers in the past of creating reasons for customers to stick with the platform by creating switching costs. Whether its services like FaceTime and iMessage, whether it's the ownership in media content, or whether it's the syncing between multiple devices using iCloud, we think Apple is growing an increasingly loyal customer base. And as that base grows and grows over time, we think Apple's moat is widening.
Barring a couple of massive product flops, we think Apple's moat will continue to grow as long as the size of this loyal customer base grows as well. We have a $570 fair value on Apple stock, so we think there is a little more upside at this point.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals
and individual investors. These products and services are usually sold through
license agreements or subscriptions. Our investment management business generates
asset-based fees, which are calculated as a percentage of assets under management.
We also sell both admissions and sponsorship packages for our investment conferences
and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.