We like to think of Apple Inc. as our favorite Mac maker, our favorite technology company, as Wall Street’s favorite technology stock. Rubbish. Technology sector notwithstanding, Apple is not a technology company.
Sure, Apple creates great technology in both hardware and software. Apple pals around with other technology companies, but the truth is settling in, even on Wall Street. Apple is not a tech company. Apple has become something of an appliance company; a maker of products where sales are routine to unspectacular, but where profits remain enormous.
Apple co-founder Steve Jobs devoted much time to studying the designs of various appliance makers. Indeed, the first Mac was more computing appliance than a device that resembled personal computers of that era.
Look at Apple’s product line today. Mac, iPhone, iPad, Watch, Apple TV, AirPods, Beats headphones. Apple is a hardware company and all but one of those products is a sealed appliance that separates the user or customer from what’s inside.
Do you muck around with your washer? Do have rip out parts from your refrigerator? Do you delve into the electronics of your stove, dishwasher, or dryer? No, no, no, and uh uh. Those are appliances that do their deeds unceremoniously throughout a specified lifetime.
That’s what Apple’s products do today. The only moving part is the software inside.
What of the Mac?
Yes, there are some Macs which can be upgraded– a little– by the customers. The Mac mini. If you have the right tools. The Mac Pro. If you can afford the RAM and SSD storage. And a few iMacs have an option for user-upgradeable RAM, but little else without specialized training and tools.
80-percent of all the Macs sold each year are Mac notebooks and for most of us, that means no upgrades, and that’s how Apple wants it because Apple is less about technology– on the storefront– than any other gadget maker.
Wall Street seems to have picked up the cue that Apple has over 1-billion very happy customers who shop online and in Apple Stores and seem satisfied to upgrade somewhat regularly to the latest and greatest without creating a trend out of changing teams.
Even at present unit sales, Apple makes a whopping profit, and Services helps the overall revenue and profitability grow. Apple is more like an appliance maker or personal goods maker than a technology company.