Why You Should Own Apple

Matt Thalman

Apple Company logo on a piece of hardware

Not many analysts emphasize the importance of Apple Inc.’s (NASDAQ:AAPL) cloud business, but it could be one of the main but relatively under-the-radar reasons to own the stock.

Long-time followers of the company may recall that Apple’s ‘iTunes’ ecosystem helped the company to retain many of its customers years ago but its next must-have feature for users could be its cloud storage. Other reasons for owning shares of Apple include its $256 billion in cash, a new iPhone launch planned for the fall, a 10% increase in its dividend payout and a $1 billion “advanced manufacturing fund” that could lead to Apple to build iPhones or other devices in the United States.

Nonetheless, the cloud‘s importance to Apple’s future is growing. Currently, Apple offers 5GB of free cloud storage and then charges $0.99 to $19.99 per month, depending on what cloud package customers order. What is so beautiful about the cloud business is that once Apple has a customer hooked, it is very unlikely that user will reduce the amount of storage space or leave Apple and the iPhone all together because the cost of switching to a different provider would be high.

Similar to how music downloaded on iTunes kept customers connected to Apple’s ecosystem, the cloud storage business appears to be doing the same thing. Moving forward, many experts are expecting cloud storage to increase in popularity along with the use of data, including precious photos, users want to save.

That trend would continue not only to intertwine customer’s lives with Apple, but boost the revenues and profits of Apple’s “service” unit, which encompasses cloud storage.

Exclusive  Goodnight, Songbird 
Apple’s “service” business

In addition, with the company’s planned iPhone 8 upgrade coming this fall, it shouldn’t be a surprise to see a big spike in Apple’s cloud business as customers seek to save photos and videos when upgrading from one phone to the next. The upgrade cycle will likely be a big catalyst for Apple’s “service” business.

Years ago, Apple changed the way many people listened to music with the advent of iTunes. During a time when free illegal downloading of sounds was destroying the music industry, Apple came along and started charging $1 to download a song. It helped to launch iTunes and turned out to be a stroke of genius.

While the iPhone may have been Apple’s best product, both in terms of dollar sales and margins, iTunes was the reason people kept buying new iPhones and remained loyal to the Apple brand. Today, downloading music is no longer as popular, but Apple’s cloud storage gives its customers another reason to keep subscribing and buying iPhones.

In the most recent quarter, Apple reported its “services” unit posted revenue of $7.04 billion, an 18% increase from the same quarter a year earlier. The prior quarterly results reported in February, Apple posted a similar $7 billion in “services” revenue. Services is Apple’s second largest revenue producing unit, behind only the iPhone, and topping its Mac and iPad units.

While the services unit is not completely made up of cloud storage, it has been noted by top Apple executives, including CEO Tim Cook, as a promising growth area due in large part to its cloud business.

Exclusive  The Nasdaq and Cryptocurrencies Finally Part Ways

Matt Thalman

Matt Thalman has been writing since 2011, shortly after gaining his MBA, but his love for the markets began in undergrad when he first learned about the awesome power of compound interest. Thalman mainly focuses on consumer-facing stocks and general investing topics, but will also cover other areas of the markets if he believes there is something important investors need to know. Follow him on Twitter @mthalman5513.


At the time of this writing, Matt Thalman owned shares of Verizon, Amazon.com, Netflix, and Tesla. 

share on:

Like This Article?
Now Get Mark's FREE Special Report:
3 Dividend Plays with Sky-High Returns

This newly-released report by a top-20 living economist details three investments that are your best bets for income and appreciation for the rest of the year and beyond.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader


Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor