Apple finally responding to market concerns

The fact we are looking at nine positive days for Apple shares out of the past 10 trading days is a miracle in itself. This is a share which collapsed from well over $200 down to $140 and now stands at $195. Indeed, the recent increase in the share price has pushed it well above recent trendlines indicating there could still be more to come. So, why is Apple back in favour?

Drip feeding news

Over the last few days Apple has begun to drip feed new products and new ideas into the marketplace. Indeed this coming Monday the company is hosting a high-profile event at which many believe Apple will announce a streaming video service. This has been rumoured for some time but finally it looks as though it is here!

We’ve also seen positive news regarding iPads, iMacs and AirPods as the company tries to mix new services with older products. A number of analysts have already significantly increased their price targets for Apple shares and the company’s within a fraction of regaining its title as the largest company by capitalisation. At around $919.9 billion, the company is not far short of the $1 trillion target.

Why would a streaming service help?

You only need to look at the likes of Netflix to see how popular Internet streaming video services have become. Many would argue the Apple should have taken this step many years ago, to encourage greater customer loyalty. The fact the company has finally taken the plunge is being seen as a positive as is the fact that video streaming services, initially free of charge, will likely encourage greater customer loyalty. As a consequence, looking at this from a purely financial point of view this would likely increase the sales life of each individual customer. Kerchiiing!

Historically Apple has been very good at managing news and expectations. We can only hope that the company is able to deliver on Monday because at the moment analyst expectations are off the grid. There is a general consensus that the company is moving into a different era but God forbid the Apple share price if Tim Cook (or Tim Apple as Donald Trump recently called him) fails to deliver.

Will Apple need to take more risks?

It is safe to say that Apple has lived off the record-breaking success of iPads and iPhones as well as many other innovative products over the years. It is only over the last 12 months or so that’s the cracks have started to emerge, expectations have been dampened by skyhigh retail prices and consumers were starting to look elsewhere. A step into the video streaming business may seem like a greater risk than we are used to with Apple, but is it?

The company already has a massive client base, innovative products which will deliver video streaming to perfection and a market which is looking for new ideas. Yes, you could argue that video streaming is not new and not particularly innovative but if you have a client base such as Apple it can be extremely lucrative. There is every chance that the company will need to take more investment risks in the short, medium and longer term. The time has passed for reclining, relaxing and sitting back while patting each other on the back.

We need to see the emergence of a new Apple, a more aggressive and more pro-risk company. Can Tim Cook deliver?

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