Apple (AAPL) is its own asset class, its success says very little about the rest of the economy. Indeed, if the details of Apple's enormous earnings beat are to be believed, the U.S. economy is softer than the headlines suggest.
"My read on the quarter is that if you took out China, the company probably would have missed in terms of shipments," says David Garrity, the head of GVA Research, in the attached clip. "So the fact that they brought on China Unicom (CHU) and China Mobile (CHL) on January 14 obviously made the quarter."
Said differently, not even the pathetic global economy could stop the growth that Apple has achieved simply by introducing one product into an untapped, albeit huge, market.
Garrity says Apple is good enough to increase earnings, regardless of a fallow economic recovery. "The most telling indicator is that their market share, even after all their success, is still 6% in terms of these main two markets into which they sell, meaning PCs and cellphones."
Obviously there's "plenty of room for them to grow." Even when that room starts to shrink, Apple's closed ecosystem will give them a leg up.
Thus far, the company has treated Information Technology as something of an afterthought, instead sucking up market share from the consumer. Apple hasn't updated its Mac Pro in nearly two years, leaving the big hardware market to others.
Because employees are starting to demand—or, at least, politely request—iPhone- and Mac-friendly offices, IT spending is company Apple's way despite the company's apparently apathetic attitude towards the enterprise space.
Garrity's conclusion is that Apple isn't yet large enough where the company's steady stream of stunningly strong earnings are good news for Apple and its suppliers. The health, or lack thereof, of Apple's customers is incidental.
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