Apple’s strategy of growing subscription services and reducing device costs has paid off. At almost $238 a share, Apple’s stock is at its highest point ever.
By Chand Bellur
October 14, 2019 at 11:47 a.m. PDT
Apple Stock Hits $237.90
Apple stock reached an all time high of $237.90 today. The price reflects the Cupertino company’s successful new strategies, in addition to positive sales reports for the new iPhone 11. Apple’s gains are also energized by a bullish market, with the DOW and Nasdaq both in positive territory.
Growing Services to Increase Revenues
It’s no secret that iPhone sales have been in a slump for the past few quarters. The devices are well-made and offer four to five years of iOS updates. Apple’s desire to attract customers with a robust and up-to-date device had the consequence of lengthening the upgrade cycle.
The iPhone used to account for two-thirds of Apple’s revenues. Today, the iconic device only makes up about half of their earnings.
In a move to grow revenues and placate investors, Apple entered into the subscription service market. The Cupertino company’s first foray into services came with iCloud, which offers cloud-based storage for a monthly fee.
Apple Music saw the company release a Spotify clone, yet gain a significant subscriber base. Leveraging ecosystem synergies, Apple is able to market their music subscription service to customers directly on the device. Although Spotify is still the market leader, investors have taken note of Apple Music’s rapidly expanding customer base. The service is tightly integrated into the Apple ecosystem, with Siri and Home Pod support providing attractive features for Apple customers.
Other new subscription services, such as Apple TV+, Apple Arcade and Apple News+, are also appealing to investors. The new services signal that Apple has a strategy to take them beyond peak iPhone demand.
Astonishing iPhone 11 Sales
Apple’s market rally is also driven by massive demand for the new iPhone. The new device has proven so successful, it’s actually difficult to buy one right now. Apple has been vague about actual sales numbers, however, Tim Cook has indicated that demand is strong. Analysts have upgraded iPhone 11 quarterly sales by 1 million units, a sign that the device is much more popular than expected.