Motley Fool: Apple Stock Driven by Retail + Disruption
by , 2:30 PM EST, January 2nd, 2008
Apple's stock is a winner due to the combined effects of a very efficient retail sales process in revenue per square foot combined with the disruptive effects of its technologies, according to The Motley Fool on Monday.
Compared to other retailers, Apple generates many times the dollars per square foot. For example, Best Buy generates US$32B on 33 million square feet annually, and while Apple only generates only $4.1B per year retail, it does it with only 1.5 million square feet.
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That sales efficiency wouldn't be possible without Apple's disruptive influence on the markets it enters. While other companies appear to be in the same busines as Apple, their focus and execution lag. For example, Apple may be poised to kill off Netflix and Palm. Microsoft is feeling the heat. [Wall-Mart has already cancelled its own movie download service after just one year.]
Not only is Apple disruptive, but it does so at an eye-popping pace. Doing the math, Tim Beyers pointed out that Apple has turned the iPhone into more than a U.S. billion dollar business in a mere six months. Other companies seem to move at a snail's pace by comparison.
The author's conclusion was that Apple's price, at $200 per share, is just the beginning of an explosion in retail presence and disruption: 40 more stores are planned worldwide for 2008.