U.S. oil production has increased in the last two years. As a result, the energy prices have decreased. Recently, the oil producing countries of OPEC increased their oil production so as to fulfill the increasing energy demands. This was an attempt to lower the prices of crude oil on a global scale. Consequently, the oil prices have dropped abruptly. This benefits Apple Inc. (NASDAQ:AAPL) directly. Reduced fuel prices mean that the cost of shipping reduces.
The lower prices of oil effects the savings of Apple who is making aggressive moves to shift to renewable energy sources. The company wishes to use HEP, solar power and biomass fuel cell to fulfill its energy requirements.
Apple Inc.’s consumers now have more money to spend since they reduced oil prices help them save more money. This is good for Apple Inc. as the company has prepared a line of products with premium options. The most expensive iPhone, 6 Plus, is being offered at $100 premium.
There is a sea of Android-based tablets in the market at premiums, which target the lower end. Still, Apple Inc.’s iPad Air 2 is rated as the most desirable tablet. It is predicted that the company is positioned to boost its selling prices and sales in the holiday season with lower oil prices. In addition, Apple Inc. also faces weak competition by rivals in smartphone, tablet and PC markets.
Samsung is the primary rival of Apple, but Samsung received bad reviews for its two major launches of the current fiscal year. In September, Samsung faced a decline of 73.9% in the profits from smartphone. So the rival company is in no position to challenge Apple Inc. this holiday season.
Samsung’s Galaxy Note 3 and Galaxy S5 were distinguished by the larger screens. However, iPhone 6 and 6 Plus sported larger screens as well, which crushed the competition and tackled the only edge Samsung had to offer. iPhone 6s also incorporate Touch ID so users can login using fingerprint identification. In addition, iPhone 6s have 64-bit processors, function with the phone payment service, the Apple Pay, and have fast graphics, which makes it a great device for consumer’s first choice when it comes to smartphones.
In the United States, no other smartphone company approaches Apple Inc. in terms of sales. iPhones also dominate the Japanese charts and have a huge market share in China. Apple Inc. earns a majority of its global profits from selling phones and also enjoys this position in the tablet and personal computers market.
Apple’s other rival Google Inc. is facing issues in the new Nexus. The company has also abandoned its initiatives to sell more premium Android-based devices. Meanwhile, BlackBerry’s and Windows Phones are not even a competition. Most of the consumers are running to buy the premium iPhones. Not only Apple Inc.’s stores are crowded but also other retailers that showcase Apple Inc. products.
Therefore the unique impact of reduced oil prices on iPhones sales and Apple Inc.’s (NASDAQ:AAPL) profits is not the only gain the company will get; it also has no immediate threat from its rivals.
