The Wall Street Journal ran a feature on Apple yesterday which included the chart below. The article highlighted the transformation of Apple from a purveyor of personal computers to one of the largest mobile phone manufacturer in the world.
The chart shows the percentage of revenue that comes from various apple products. As you can clearly see, in the span of ten years Apple has completely transformed itself into a company almost entirely reliant on mobile phones.
Apple should be applauded for its success over the last decade, but if there is any industry where the past is rarely prologue, it is consumer electronics.
Apple’s own success over the last ten years proves the point, and it should give anyone considering an investment in the company pause. Yes, the iPhone may be more fundamental to consumers lives than a personal computer, but the history of the industry should inform every potential investor in the stock to insist on a healthy margin of safety.
Jeremy Jones, CFA
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