Apple remained a quality technology stock with a growing range of products and services, Craigs Investment Partners broker Chris Timms said yesterday.
Apple's guidance for the current quarter came in slightly below market expectations, sending the company's share price down 6.6% in after-market trading.
But the company had strong margins, an unmatched cash hoard and relatively recurring revenue streams from users upgrading to new versions of the devices.
''We acknowledge that Apple faces strong competition from other device manufacturers such as Samsung, Lenovo and LG. However, the Apple ecosystem generates very strong brand loyalty. Purchasing one Apple product is likely to lead to purchases of additional devices, accessories and services,'' Mr Timms said.
The company was only starting to make progress in software and services and those advances would help grow and monetise its large customer base, he said.
Reviewing Apple's financial result for the June quarter, Mr Timms said the company reported another impressive result, beating both revenue and earnings expectations.
The latest result was driven by strong demand for the company's latest iPhone offerings.
The company sold 47.5 million iPhones during the quarter, an increase of 35% on the previous year and three times faster than the growth of the whole global smartphone market.
Also, it came in a quarter which was typically the weakest for iPhone sales as consumers awaited the release of Apple's products in September, he said.
Revenue from the iPhone increased by 59%, benefiting from an uplift in the average selling price as customers shifted to newer, more expensive models.
''Slowing economic growth in China didn't stand in Apple's way. Performance in the region was exceptional.''
Investor focus was also on details around the initial sales success of the company's latest product, the Apple Watch, Mr Timms said.
While Apple did not release any specific figures, there was enough information to confirm it missed the overly optimistic expectations of the market.
It was early days for the watch as it was only available in nine countries during the quarter, with nine more added at the end of the quarter, including New Zealand.
''Given the 29% increase in the company's share price over the last 12 months, we continue to believe the strong near-term growth is largely factored into Apple's current valuation.''
