Apple Inc. (NASDAQ:AAPL) shares traded at $510’s this morning before rebounding to the 520’s at midday riding a bit higher on news that the App Store just had its biggest December ever, with 2 billion downloads.
The monumental boost in app downloads likely comes from customers unwrapping new iPads, iPods and iPhones over the holidays. According to analysts, this projection will affect Apple’s earning call within the next two weeks. Some more skeptical analysts believe that this announcement, which usually comes at a product introduction, press event or formal earnings call comes at a suspicious time—one where Google plans to announce that it has over 800,000 apps in the Play market, surpassing Apple’s collection of 775,000.
But will the sheer number of apps contained in iTunes or the “firstness” sense that Apple Inc. (NASDAQ:AAPL) has cultivated in the app market win out among consumers? Recent reports show that Apple has not only made lists for having one of the strongest and best branding strategies—it spends a near obscene amount of money on keeping things that way and will be spending even more under Tim Cook’s leadership. If it truly takes spending money to make money, Apple will be the clear winner at the end of the day.
Piper Jaffray chief information officers are jumping on the rumor that Apple will woo more corporate consumers this year, after releasing poll results from a sampling of IT managers. According to CNET, Gene Munster reports that tablets are the rage and 57 percent of the 59 polled plan to deploy tablets in 2013 and that this market has room to grow for the next five years. CNET’s Lance Whitney also reports that the research firm Forrester has corroborated this information predicting that Apple Inc. (NASDAQ:AAPL) will sell $7 billion in Macs and $11 billion in iPads to corporate consumers.
Whitney notes the irony of this development, as Apple used to be primarily focused on consumer and education markets, but I’d argue that this development goes back to the branding strategy of “firstness.” No matter how much cheaper a competitor’s product happens to be, if a product has branding supremacy and is considered a leader in the industry, good firms know that the time spent on retraining an employee base to use cheaper equipment is still more expensive than letting them bring their own.
But what may keep shares trading low is the looming tax situation the firm finds itself in as it reports exactly how many offshore dollars and holdings it has to the U.S. Senate. If Apple were forced to pay on all its loopholes, it would owe a whopping $28 billion as of today. With no tax holiday on the horizon, Apple may have to get creative about how it brings dollars home and keeps them overseas, like acquiring an overseas tech company or a loan to the U. S. parent company through an overseas subsidiary.
In contrast, Apple Inc. (NASDAQ:AAPL) could always just pony up and pay the money out of a sense of “altruism,” creating a “firstness” sense of cultural responsibility that might drive more consumer purchases in the long run at the expense of shareholders.
How will branding, taxes and corporate consumers help Apple? Maybe only time will tell.
Disclosure: None
