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Apple (AAPL) Likely to See Profits Grow Due to Wide Margins

Apple Inc (NASDAQ:AAPL)

Apple Inc. is one of the most well-known and respected brands in the world. Based in Northern California, this American tech giant has gained strong loyalty from customers towards its brand (this loyalty is exhibited when customers que for hours to purchase the latest gadget e.g. the Apple iPhone. Many buyers view the firm’s devices as superior to the competition, & are willing to pay much more for Apple’s products than for one of their competitor’s.

Apple Inc NASDAQ:AAPL cash

Apple generating high margins on iPhone SE

Today, the research firm IHS revealed that it costs Apple around $160 to manufacture their iPhone SE, which is sold for around $400. It can be deduced that the firm generates a profit of around $240 per iPhone SE sold (it is not clear if the $160 takes into account operating costs.) Today at 17:59 GMT, The Daily Mail published an article that Apple Inc. is building the “Apple Campus 2”, which is set to cost around $5 billion. The building will be almost 3 million square feet in size. It will be the home of 13,000 techs, more than 10,000 vehicles and 7,000 trees.

Several sites also reported that Apple is trying to patent software that can automatically censor explicit language in music & audio books. A share in the firm was trading at $111.12 (up by more than 1% today) as the market closed.

Apple’s large profit margins & its continued innovation & strong brand loyalty tells us that the firm will continue to be profitable, yielding large returns for investors via big dividend payments. Apple generates its revenue through several avenues. As well as selling a large number of consumer electronics, they also created the Safari Web Browser, the ITunes Media Player, & their own operating software, known as IOS (which is used in their electronic devices.)

As of July 2015, Apple employed more than 110,000 full time staff, with more than 475 retail stores in nearly 20 different countries. In November 2014, Apple became the largest publically trade corporation internationally by market capitalization. They also became the first American company to be valued at more than $700 billion. In 2015, the company generated revenue in excess of $200 billion, with a net income of nearly $55 billion. Despite this strong recent performance, Apple is working hard to maintain their position.

In other tech related news, it was reported that Samsung (LON: BC94) is developing a flexible smartphone, that can be folded. It is rumoured that the phone will be available to purchase in 2017. The device would be a hybrid phone-tablet. If true, then this a noteworthy development, as it could be significantly different to the current smartphones or tablets for sale. The flexibility of the device could give Samsung a USP (unique selling points), and allow it claim more market share from its competitors.

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