Apple Inc. (AAPL)’s Inevitable Tactic Change

Samsung’s Galaxy S4 has already logged 20 million device sales, while Nokia’s Lumia 920 and 928 phones continue to struggle in the U.S. However, according to reports, Nokia Lumia seems to be doing well in Europe, which is part of the reason Apple is underperforming in the region. Research In Motion Ltd (NASDAQ:BBRY), on the other hand, continues to struggle in North America, especially with the Z10 model. Analysts are of the opinion that the Q10 model has more potential than the Z10 due to the usability of the QWERTY keypad.

Performance and valuation

In the most recent quarter, Apple Inc. (NASDAQ:AAPL)’s revenue grew by 11%, compared to Samsung’s 16.8% and BlackBerry’s 9% from the same quarter last year. On the other hand, Nokia Corporation (ADR) (NYSE:NOK)’s revenue declined by 20% year-over-year. Apples earnings fell by 17.9% per share compared to Samsung’s 43.5% growth last year.

The company’s gross margin for the last four fiscal quarters, cumulatively, stands at 40%, well above Nokia’s 29% and Blackberry’s 33%. Its operating margin is equally impressive at 31%, compared to Nokia’s operating loss of 1% and Research In Motion Ltd (NASDAQ:BBRY)’s loss of 5%. On the other hand, Samsung’s operating margin stands at 15.4%.

In terms of valuation, Apple trades at a price to earnings (P/E) ratio of 10.04 times, compared to Samsung’s 7.54. Its price to sales (P/S) ratio of 2.32 times is also higher than Samsung’s 0.79, while Nokia’s stands at 0.38 and BlackBerry’s at 0.45. All these parameters indicate that Apple is expensively priced against its fellow smartphone manufacturers.

The bottom line

Apple’s stock price is currently 40% below its all-time high, achieved in September last year, just after the launch of the iPhone 5. The company seems to hit a ceiling when the stock price approaches $450, as it has oscillated around that mark over the last several weeks.

However, introducing more than one device to its largest revenue contributor, the iPhone-line-up, could spark a massive rally. Fundamentally, we can already see that Apple Inc. (NASDAQ:AAPL) remains strong, with nothing much to worry about. The two devices will not only refresh the iPhone line-up, but thrust the company into a more competitive position.

The article Apple’s Inevitable Tactic Change originally appeared on Fool.com and is written by Nicholas Kitonyi.

Nicholas Kitonyi has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Nicholas is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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