WWDC '18s Impact on Apple Shareholders
Apple stock increased in price during and after the company's developers conference on June 4, 2018. Investors continued to buy into Apple boosting the stock price closer to its eventual trillion dollar valuation. However, there were some stock market spectators and even a few Apple shareholders who wondered why the stock was increasing when no new hardware was revealed during the conference.
We believe Apple used WWDC '18 to showcase the foundation for the up and coming hardware releases. Why do we think the software is the foundation? Our phones, computers, laptops, and tablets are pretty useless without the software. No matter how light the laptop is, how big and clear the phone screen is, or how powerful the tablet is, without software it's like a car with no gas, not very useful.
Source: Apple's WWDC 2018
Two of our last three The Seville Report quarterly newsletters featured Apple as company to invest in. Our thesis for an investment in Apple revolved around it's growing "Services" business. Apple understands the concept of "value added" as well as any other tech company. Even users - like myself - who don't have the latest edition iPhone will be able to experience the benefits of the new software and its features. The update's that were discussed at WWDC '18 will be available for the iPhone 5S and phones manufactured after the 5S.
These software updates give new life to the iPhone 8 and iPhone X as well. Last year around this time there was a lot made of consumers waiting for the new Apple release in September instead of upgrading. iOS 12 should give consumers a few more reasons to consider an upgrade now over waiting until September.
We believe what Apple showcased at WWDC '18 will be used to make the next generation of iPhones, iPads, Macs, MacBooks, Apple Watches, Apple TVs, and HomePods that much better for the user. Long term Apple investors should keep an eye on Apple to see how the full package (software and new hardware together) influences purchase decisions by consumers.
For now if you're an investor in Apple, enjoy the ride to a trillion-dollar valuation and the potential break of $200 per share.