Investing in Apple Stock (AAPL)

What you need to know about investing in Apple

Apple Inc. (AAPL) is a global technology company that designs, manufactures, and sells smartphones, personal computers, tablets, wearables, and accessories. Some of its main products include the iPhone, the Mac line of personal computers and laptops, the iPad, the Apple Watch, and Apple TV. The company also has a fast-growing services business that includes its iCloud cloud service and its digital streaming-content services, such as Apple Music and Apple TV+.

Apple was founded in 1976 by Steve Jobs and Stephen Wozniak. The tech giant started out operating from the Jobs' family garage and has since grown into a diversified technology behemoth. Part of Apple's growth strategy has been to purchase small tech companies that it can easily integrate into its expanding line of products. Four years after its founding, on Dec. 12, 1980, Apple went public through an initial public offering (IPO) at $22.00 per share. Its stock trades on the Nasdaq Global Select Market.

Apple's headquarters is located in Cupertino, Calif. Tim Cook has been chief executive officer (CEO) since 2011. Apple is classified as a member of the information technology sector. It operates within a number of industries, including computer hardware and technology, video streaming, and cloud computing. The company faces numerous competitors, including smartphone manufacturer Samsung Electronics Co. Ltd. (KRX:005930), computer manufacturer Dell Technologies Inc. (DELL), video streaming company Netflix Inc. (NFLX), and other giant technology firms like Microsoft Corp. (MSFT). Apple posted net income of $57.4 billion on net sales of $274.5 billion in FY 2020, which ended Sept. 26, 2020.

Key Takeaways

  • Apple manufactures smartphones, personal computers, tablets, wearables, and accessories, and offers digital streaming-content services.
  • Apple's rivals include Samsung Electronics Co. Ltd. (KRX:005930), Dell Technologies Inc. (DELL), Netflix Inc. (NFLX), and Microsoft Corp. (MSFT).
  • Apple earned net income of $57.4 billion on $274.5 billion of net sales in FY 2020.
  • A federal judge ruled in September 2021 that Apple must loosen its App Store restrictions to allow developers to provide links to alternative payment systems.

Apple's Recent Developments

  • On Sept. 10, 2021, a U.S. district judge ordered Apple within 90 days to begin letting developers send customers outside Apple's App Store for payments. Apple won an important partial victory, however, because the judge did not find that Apple had a monopoly on the mobile game market. (See details in Q&A below).
  • On Sept. 9, 2021, the Irish High Court challenged a decision to extend the life of a planning permission that would allow Apple to build a data center in Galway County. Apple won permission from local authorities to build the data center in 2016, then shelved the project in 2018, citing lengthy delays. Galway County granted the five-year planning permission extension for the facility in August 2021. The examination of the case is expected to take place in October 2021.

Apple briefly became the world's first $3 trillion company during intraday trading on Jan. 3, 2022. The iPhone maker also holds the distinction of being the world's first company to reach $1 trillion and $2 trillion.

What's Happening with Epic Games' Lawsuit Against Apple?

On Sept 10, 2021, a U.S. district judge ordered that Apple will no longer be able to block developers from sending customers outside the App Store to use alternative payments systems. The ruling follows an initial lawsuit launched by Epic Games, the maker of the popular video game Fortnite, against Apple in August 2020. Epic accused Apple of violating antitrust laws by forcing developers to use its own payments system. In the latest ruling, however, the judge said that Apple acted legally in removing the Fortnite video game from its App Store and ruled that owner Epic Games must pay damages due to breach of contract. The ruling also does not prevent Apple from keeping the App Store as the only place where users can download programs. The ruling also allowed Apple to continue charging commissions of between 15-30% for its own payment system. On Sept. 12, 2021, Epic said in a legal filing that it plans to appeal the ruling.

What's Happening with Antitrust Suits Against Apple?

In addition to antitrust litigation related to its App Store, Apple faces several other antitrust lawsuits, including these below.

On Oct. 6, 2021, Reuters reported that the European Union (EU) will soon file an antitrust charge against Apple over the company's near-field communication (NFC) chip technology, according to people familiar with the matter. The chip technology allows for tap-and-go payments on iPhones. The charge follows an investigation into Apple Pay launched last year by the EU. The EU looked into whether Apple engaged in anticompetitive behavior by refusing rivals' access to Apple's payment system. The EU's main focus now is the company's NFC chip.

On April 30, 2021, the European Commission, the EU's antitrust regulator, charged Apple with levying high commission fees in the App Store and prohibiting developers from providing information on alternative ways to use their services.


FAQs

Has AAPL ever split its stock?

Apple's stock has split five times on the dates below:

  • Aug. 28, 2020: a 4-for-1 stock split.
  • June 9, 2014: a 7-for-1 stock split.
  • Feb. 28, 2005: a 2-for-1 stock split.
  • June 21, 2000: a 2-for-1 stock split.
  • June 16, 1987: a 2-for-1 stock split.

Does AAPL pay a dividend?

Yes. Apple pays a quarterly regular cash dividend of $0.22 per share.

How many shares of AAPL stock are there?

As of July 16, 2021, Apple had 16,530,166,000 shares outstanding.

How Profitable Is Apple?

Apple had a net income of $21.7 billion for the quarter that ended June 26, 2021, according to its most recent quarterly filing, which was released on July 28, 2021. That's a 93.2% year-over-year (YOY) increase from the same quarter in 2020. It also reported quarterly revenue of $81.4 billion, a 36.4% YOY increase, and earnings per share of $1.30, a YOY increase of 100%.

Who Owns the Most Apple Stock?

The biggest individual insider shareholder of Apple is Arthur Levinson, who has been the company's chair of the board since 2011. As of Feb. 2, 2021, Levinson owns 4.5 million shares of Apple stock. The biggest institutional shareholder of Apple is The Vanguard Group, which owns 1.3 billion shares, representing 7.8% of total shares outstanding, according to the company's most recent proxy filing, reflecting the number of shares as of Jan. 5, 2021.

Who Invented the Apple iPhone?

The late Steve Jobs, co-founder and former chair and CEO of Apple Inc., invented the iPhone with his team of engineers and designers in the early 2000s. Jobs announced the first iPhone in January 2007 at the Macworld conference during an hour-long presentation. After the announcement, Apple scrambled in the following months to turn Jobs' demo phone into a mass-market product. The first iPhone was released to the public in June 2007.

Who is Apple's CEO?

Tim Cook is CEO and serves on the company's board of directors. Prior to assuming the CEO position in 2011, when he succeeded Jobs, Cook was Apple's chief operating officer (COO). He also spent time leading the company's Macintosh division. Cook has been with the company since 1998.

Article Sources

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