This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Are Secondary Markets Really That Important to Apple?

Stocks in this article: AAPL GOOG

NEW YORK ( TheStreet) -- The bulk of Apple (AAPL) analysts' criticism has centered around the iMaker's seeming unwillingness to serve secondary markets with a cheap iPhone. The argument is that Apple is losing huge market share to Samsung in markets like Russia, India and Eastern Europe. And this will eventually be Apple's undoing. I guess the premise is that market share is everything.

This obviously flies in the face of everything that has made Apple the dominant force and the one true innovator. Apple has always led the market, others follow initially with cheap knock-offs, then become more mature. However, Samsung and others lag greatly in terms of total profit compared to Apple.

The reality is that people don't want cheap Apple products. They want the good stuff. A case in point, just look at the lack of sales performance of the iPhone 5C, despite the much lower cost. And that trend isn't exclusive to the U.S. market, it's everywhere.

The fact of the matter is that people want premium-only products from Apple. But it's much more than that. They also want everything else that goes with the experience of owning an Apple product. I'm speaking of the online and physical stores, the service, the software, the entire ecosystem. When people buy Apple products, they are purchasing future innovation.

Countries like China and Russia may be buying mostly cheap phones, which are low margin trade-offs. But they are also NOT buying apps, which makes up the majority of the smart phone experience, and a healthy margin.

This market share argument is exactly the same beef when Apple competed with Macs. But now Apple is the number one laptop producer, and even though worldwide PC desktop sales have declined dramatically, Apple's share has risen equally so. But Apple foresaw this desktop decline several years ago. Maybe even a decade ago... and now Apple is the number one producer of mobile computing devices.

Apple's strategy is years ahead of even Google (GOOG), with tight integration of the cloud with all platforms. This includes laptops as well as tablets, iPhones and touch devices. It is clear that Apple has the vision and the ability to execute. This is what trumps Samsung, and others.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs