But according to Barron’s, Apple’s strategy of hooking users to “its software and its suite of toys” was still working. It cited a report from Apple earlier this month that said customers had downloaded 40 billion programs to their iPhones, iPads, and iPods since the 2008 launch of the App Store, and that half of those came in 2012 alone.
Its rumored plans to launch a cheaper iPhone were part of the same strategy and not “a death knell for margins” or “a desperately belated grab for the lower-end market,” the article added. “As it did with iPods and iPads, Apple has always made a splashy debut with a pricey new device that gets the world hooked before it eventually moves down in price as the market matures — either by selling older generations of the product at lower prices or packing more features into the same gadget for the same price,” it said.
In addition, the fact that Apple had more than $29 billion in cash and more than $92 billion in other securities was a comforting one. Despite all the worries, the stock still offered a 2 percent dividend yield and was fetching just 10.6 times 2013 profit.
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