Will Apple Do it Again? | Brady Barrows
Will Apple Do it Again?
Posted by in Blog | 0 comments

Apple surely has impressed investors since its beginning in Steve Job’s garage in 1976 to become the multinational technology company it is today. “During the first five years of operations revenues grew exponentially, doubling about every four months. Between September 1977 and September 1980 yearly sales grew from $775,000 to $118m, an average annual growth rate of 533%.” Wikipedia

This trend of continuing to impress investors and increasing profit for Apple is amazing. The question is will Apple do it again?

In 1980, when Apple went public at $22 per share, generating more capital than any IPO since Ford Motor Company in 1956 and instantly creating more millionaires (about 300) than any company in history according to this same source, Apple continued to surprise investors with the development of the Macintosh in 1984, and after suffering a terrible decline from 1991 through 1997 when Jobs left, recovered profitability by bringing Jobs back to Apple as an advisor and eventual interim CEO and restructuring the company’s product line in July 1997. For the next ten years Jobs as CEO identified the design talent of Jonathan Ive, and the pair worked collaboratively to rebuild Apple’s status. In 2001 Apple began opening it first retail stores which have now grown to 490 retail stores in 20 countries and an online store available in 39 countries and also released the iPod (in 2001) which made incredible profit for Apple. Some of Job’s decisions included producing Intel-based Mac computers in 2006 replacing the PowerPC processors, the introduction of the first iPhone in 2007 and the iPad in 2010, which soared Apple shares to an all-time high, eclipsing $300 in 2010. The iPhone has continued to make Apple more profit than any other mobile device manufacturer. As The Motley Fool explains, “In its last fiscal year, Apple reported net revenue of $215.64 billion — a substantial sum. On that revenue, it generated gross profit of $84.26 billion….In other words, Apple’s sales and marketing organization is effective and its brand so powerful that Apple can spend a fraction of what its fiercest competitor does and still generate more revenue.”

This year marks the tenth anniversary of the iPhone and rumors have been flying high with what Apple may bring to the market introducing the iPhone 8. Daniel Eran Dilger, appleinsider, has a technically detailed article explaining the success of Apple decisions in the software and hardware it uses predicting that Apple may be investing in a new GPU that may create “a significant technical leap forward that could be as big of an advance as iOS was ten years ago.” Dilger explains that Apple is better at software/hardware innovations than its rivals because “Unlike any other company, Apple has the unique ability to immediately roll out new technologies across hundreds of millions of devices, both via software updates to its existing installed base, and through high-volume premium device sales that are effectively guaranteed to find buyers…..Every year it refreshes 80 percent or more of its iOS installed base with modern software….Apple could introduce a radical new GPU architecture and establish it across its product line extremely rapidly, potentially as quickly as this year, with iPhone 8, Apple TV 5 and Apple Watch 3. As it has in earlier years, it could also update previous models with a new SoC, including its new GPU on them as well.”
According to Dilger, Apple spends over $10 billion annually on R&D. While Apple nearest rival, Samsung spends more than Apple on R&D ($13 billion according to AndroidHeadlines), Samsung receives less bang for its buck in R&D spending because, as Dilger explains, “Apple’s largest competitor sells roughly 300 million smartphones every year, but only around 40-45 million of those will be premium class Galaxy S8 flagship models. Many are shipped new with old versions of Android, and will never be updated. Samsung could design a new premium GPU but would have trouble spreading it very far because most of its phones are low-end models.”

So if Dilger is correct, Apple may again dazzle us with a new GPU that makes rendering images, video and photos better than any other mobile device, and, “may also be the perfect timing for Apple to launch a radically new GPU design that breaks with the existing status quo to offer a major leap in graphics capabilities,” and Apple does it again.