Apple's 2014 Could Be a Blowout

Apple's 2014 Could Be a Blowout

It has always been this Fool's stance that the criticisms leveled at Apple's Tim Cook have been unjustified and, frankly, incredibly harsh. While there was -- and will only ever be -- one Steve Jobs, the company was left in great shape to an individual who truly understands what Apple is about.

It's apparent on the conference calls that Apple's mission is to deliver the world's best consumer computing products. It's even more apparent that management believes that this is truly the best way to deliver shareholder value. In 2014, Cook's efforts may finally pay off in a way that even the skeptics can appreciate.

The best things take time
Apple is very rarely the first mover in any given product category. However, what Apple is exceptional at is identifying when to release a product. Apple wasn't the first to come up with the idea of a tablet, but it was the first to identify when the technology was finally there to deliver the correct user experience. A more recent example is smaller tablets. Clearly, Samsung, Amazon, and Google had 7-inch tablets out before Apple did, but when the iPad Mini arrived, it took the world by storm. There are likely very few who would argue that the iPad Mini with retina display isn't the best small tablet on the market today.

In that vein, Apple gets plenty of flak for not being first to a larger iPhone, a smart-watch, or a number of other things. While other players have done large phones reasonably well, the situation is likely to be identical to what happened with the iPad Mini. Apple will probably release a device with a display sized just right that will take the large-screen smartphone market by storm, probably overnight.

The only question here is if Apple will do multiple flagship iPhone models. Investors have already seen that Apple is willing to do multiple models for the purposes of segmentation. But will Apple launch two different, but equal, partners in the iPhone product stack? Whatever Apple ultimately does in this space, it is very likely to be the "right" way to do it -- and the customer loyalty and sales numbers show.

It's just tough to be bearish
With a strong iPad lineup and the iPhone 6 on tap for next year -- which may also include a larger version -- it's tough to be bearish on Apple's prospects going into 2014. Indeed, with margins now appearing to have bottomed, and with a robust pipeline of products -- with perhaps new categories investors aren't even aware of yet -- Apple is poised to have a record year as far as the top and bottom lines are concerned.

However, while it is tough to be bearish, the real question is whether it's time to be bullish. There's no doubt that Apple makes best-in-class products -- the sales numbers and customer loyalty answer this definitively. If Apple's margins have indeed bottomed and if sales continue to grow as they appear to be set to next year, then the shares will go higher -- potentially much higher -- from here.

However, if margins continue to compress and/or revenue growth proves elusive -- however unlikely given the current drivers -- outperforming the market may prove challenging.

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Ashraf Eassa has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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