Steve Jobs And Early Apple Investors Knew This… Do You?
I would bet few investors really understand what’s behind the success of technology behemoth, Apple, Inc. (Nasdaq: AAPL).
#-ad_banner-#The rags to riches story of Steve Jobs and Steve Wozniak building the first Apple computer in a garage is widely known. And of course, it’s products like the iPod, iPhone and Macbook that first come to mind when you think of the company’s biggest hits.
But today I want to share with you the secret that’s led Apple to become the world’s largest company by market capitalization and helped its share price sky rocket more than 9,000% since 2001.
You see, it’s not the company’s revolutionary products that drive its success…
The key to understanding the company’s success can be seen in a simple pattern. Once you identify this pattern, the catalyst to future growth for Apple — and the way investors can make money from the company today — will be apparent.
After Apple sold the first iPod in October 2001, it was not received well by critics, consumers and investors.
Just look at this chart showing Apple’s share price in the 18 months following the iPod launch:
Not what you’d expect, right? Apple shares lost 29% of their value after introducing one of the most revolutionary products in its storied history.
But in April 2003, Apple would dramatically change not only the music industry, but how we purchased music. It introduced the iTunes Store, offering 200,000 songs for $0.99 each.
No longer would we have to rip music electronically from our favorite CD, manually type in the song title and artist and then load it to our iPod… we could simply purchase our favorite songs and seamlessly put them on our iPod.
In the third quarter of 2003, Apple sold 336,000 iPods, up 140% from the same quarter a year before. Two years later, Apple sold nearly 6.5 million iPods in the third quarter alone — 20 times more than in the third quarter of 2003.
This was the first step of a repeating pattern that has taken Apple from a $4.8 billion market capitalization in 2003 to its current $700 billion market cap.
You see, it isn’t Apple’s hardware that drives growth. The hardware is merely the vehicle, but the engine is the software.
The strategy is quite simple:
1. Identify a complacent industry with a huge target market and unlimited upside.
2. Create a product that people can’t live without and deliver a software application to seamlessly sync with that product.
3. Make win-win partnerships with key players that are already in the established industry.
The research team and I have been quietly outlining their method for the past few weeks.
Last month, we wrote about the iPhone 6, the iWatch and its newest software Apple Pay, which enables consumers to buy goods with a simple tap of their phone. We detailed how near field communication (NFC) chips now allow smartphones and cash registers to communicate, making cash and credit cards obsolete.
And last week, I wrote about the $11 trillion market opportunity that Apple Pay could unlock and the key partnerships that will help make it happen.
Now that I’ve revealed the company’s strategy, you’ll understand why we have been pounding the table on Apple Pay.
The iPhone 6 is on track to skyrocket Apple’s profits in the same way the iPod did more than ten years ago. And this time it could lead to more revenue than the iPod, iPhone and iPad combined. But it’s not only Apple’s bottom line that will benefit… it will also pad the pockets of Apple’s key suppliers.
In my premium advisory, Game-Changing Stocks, I correctly predicted in 2012 that Apple would introduce a mobile payment feature in the iPhone. But more importantly, I pointed out that it would be the key supplier of Apple’s NFC chips that came out the biggest winner. It’s a bet that’s already led readers to gain more 225% in just over two years.
You see, shares of Apple are likely to do quite well in the months and years ahead, but that’s not the play here… The dirty little secret about Apple that most investors ignore is the fact that the company’s key suppliers have a history of outperforming Apple after the company launches one of its revolutionary new products. That’s why I predict more monumental gain potential ahead for this NFC chip manufacturer and four other key Apple suppliers. To see my case as to why, I invite you to check out this brand-new research video by clicking here.