Will the Government Buy Apple?
With the recent sell off in momo stocks such as Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX), many investors are wondering what stocks will be next on the chopping block. Shares of Apple (NASDAQ:AAPL) have been on an amazing run over the past decade, hitting an all-time high of $426.70 on October 17. However, since then, shares have had trouble maintaining a price above $400. Shares were bruised after a rare earnings miss, but the future looks bright for the company as it looks to expand the role of its devices.
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Bloomberg reports, “The US Department of Veterans Affairs is exploring security systems that would permit employees to use as many as 100,000 mobile devices, including Apple’s iPad and phones using Google’s (NASDAQ:GOOG) Android, without endangering the privacy of sensitive information.” The report shows that Apple may be able to expand its sales to the government. Competitors such as Dell (NASDAQ:DELL) and Research in Motion (NASDAQ:RIMM) already sell technology products to the government. Last year, Dell sold nearly $2 billion of products to the government, while Research in Motion sold about $90.2 million of products. In comparison, the federal government only spent about $51 million on Apple products, either directly or through resellers and integrators, according to data complied by Bloomberg Government.
VA officials have signaled that security is a major issue with technology products. “We want to make sure that veteran information is protected while still enabling productivity enhancing applications,” Roger Baker, the VA’s chief information officer explained. Currently, RIM (NASDAQ:RIMM) is the only smartphone maker whose products have received Pentagon security certification. President Obama is considered to be the first high-tech president, after fighting to keep his personal BlackBerry, a smartphone made by RIM. If the VA moves forward with the implementation of Apple products, employees could be using the 100,000 units of iPads or iPhones within 18 months. The move may also boost confidence in businesses to use more Apple devices.