A few days ago, The Wall Street Journal quoted our Senior Investment Analyst Arif Karim in its reporting about Apple’s stock price decline since its recent earning call and earnings misses of its suppliers since.

Arif shared that we believe the market is adjusting its view from Apple as a company whose value is driven by iPhone unit growth to one that has a huge base of high value customers (top 20% income earning in the world) that it can create additional value for via greater service offerings (iCloud, Music, App Store, AppleCare, etc.), accessories (Watch, AirPods, Beats, even iPads), and moderate price increases – even for its high end iPhones at $1000, iPhones cost its users ~$1/day over a 3 year period, a fraction of the cost of a cup of coffee.

As of the date of the post, clients invested in Ensemble Capital Management’s core equity strategy own shares of Apple (AAPL). This company represent only a percentage of the full strategy. As a result of client-specific circumstances, individual clients may hold positions that are not part of Ensemble Capital’s core equity strategy. Ensemble is a fully discretionary advisor and may exit a portfolio position at any time without notice, in its own discretion.

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