Apple is still the most powerful brand in the world
Apple managed to win the top Oscar award for the best picture with its film, CODA. This is a feat considering that Apple has only launched the streaming service 3 years ago and this is the very first nominated work in the Oscar.
This is also the first time for a streaming service to win the Best Picture, even though Netflix has been nominated for several occasions only not to be able to win it. Apple didn't seem like trying that hard - it was a volume game for Netflix but Apple has limited selection.
To rub salt in the wound, just Apple's iPad sales of $32 billion is more than Netflix's revenue of $30 billion. FYI, iPad contributes the least to Apple's revenue in FY21. iPhone sales are equivalent to 6 Netflix and Apple's net profit of $95 billion is more than 3x the revenue of Netflix. Such are mind boggling numbers.
About 11 years ago, Jobs handed the CEO job to Cook and many wondered if Apple will ever be the same again. Cook didn't disappoint and Apple became the most valuable company in the world by market cap and was the first stock to touch the US$3 trillion market cap earlier this year.
Apple is Berkshire's largest equity investment currently and it sounds contradictory when Buffett says he doesn't understand tech and don't invest in things outside his circle of competency. This is because Buffett doesn't see Apple as a tech company, he sees it as a powerful brand - a consumer product that he is great at evaluating.
I recalled a BBC documentary on brands and in one episode a neuroscientist was performing brain scans on consumers as different products were put in front of them. Jesus Christ was used as a baseline for comparison since he symbolises their religion. The parts of the brain that lit up for Jesus Christ lit up for Apple products too. This shows that Apple's branding is at the religious level.
Most part of Apple's value is not in its tech. There are many companies doing innovative stuff. But it is the brand that sets the difference. For e.g. Apple is able to convince its customers to part $50 for a USB-C cable. How innovative is that and which company can get away with it?
Apple is a luxury brand selling status. The difference is that a luxury brand like LVMH typically could only sell to a few. They play the exclusive game. But Apple is inclusive. It is selling luxury products to the masses, the more the merrier. As such Apple enjoys a 26% net profit margin as compared to LVMH's 19%. Apple's net profit of $95 billion is more than LVMH's revenue of $73 billion.
Few companies can reach this cult-like stature and the other company I can think of is Tesla but that's for another day. There are none from the other parts of the world. Not even China. The Americans are still best at the branding game.
$Apple(AAPL.US$
This is also the first time for a streaming service to win the Best Picture, even though Netflix has been nominated for several occasions only not to be able to win it. Apple didn't seem like trying that hard - it was a volume game for Netflix but Apple has limited selection.
To rub salt in the wound, just Apple's iPad sales of $32 billion is more than Netflix's revenue of $30 billion. FYI, iPad contributes the least to Apple's revenue in FY21. iPhone sales are equivalent to 6 Netflix and Apple's net profit of $95 billion is more than 3x the revenue of Netflix. Such are mind boggling numbers.
About 11 years ago, Jobs handed the CEO job to Cook and many wondered if Apple will ever be the same again. Cook didn't disappoint and Apple became the most valuable company in the world by market cap and was the first stock to touch the US$3 trillion market cap earlier this year.
Apple is Berkshire's largest equity investment currently and it sounds contradictory when Buffett says he doesn't understand tech and don't invest in things outside his circle of competency. This is because Buffett doesn't see Apple as a tech company, he sees it as a powerful brand - a consumer product that he is great at evaluating.
I recalled a BBC documentary on brands and in one episode a neuroscientist was performing brain scans on consumers as different products were put in front of them. Jesus Christ was used as a baseline for comparison since he symbolises their religion. The parts of the brain that lit up for Jesus Christ lit up for Apple products too. This shows that Apple's branding is at the religious level.
Most part of Apple's value is not in its tech. There are many companies doing innovative stuff. But it is the brand that sets the difference. For e.g. Apple is able to convince its customers to part $50 for a USB-C cable. How innovative is that and which company can get away with it?
Apple is a luxury brand selling status. The difference is that a luxury brand like LVMH typically could only sell to a few. They play the exclusive game. But Apple is inclusive. It is selling luxury products to the masses, the more the merrier. As such Apple enjoys a 26% net profit margin as compared to LVMH's 19%. Apple's net profit of $95 billion is more than LVMH's revenue of $73 billion.
Few companies can reach this cult-like stature and the other company I can think of is Tesla but that's for another day. There are none from the other parts of the world. Not even China. The Americans are still best at the branding game.
$Apple(AAPL.US$
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Captain Woon : Buffett might be right as we do not see a lot of advance tech from Apple but more on business strategy...like the recent hareware subscription plan.
71642201 : I agree