Apple (AAPL) has outmaneuvered and outperformed its peers. That dominance is nowhere better reflected than in the company's remarkable operating margin track record.
Apple's operating margin has been steadily climbing with little sign of a let up, reaching 30.5% for the first half of FY 2011. This extraordinary performance demonstrates Apple's ability to sell desirable products at high price points, with attention to keeping costs down.
Improving margins over an 11 year period is no mean feat, especially during a major recession. This sets Apple apart from its peers. The company has not had to sacrifice its profitability to move its products, something that almost universally happens over time to businesses. No other company comes close.
Research in Motion (RIMM) has faltered lately.
The operating margins of Hewlett-Packard (HPQ), Dell (DELL), and Nokia (NOK) have been less than stellar. Nokia's have fallen off a cliff. HP's have stagnated for the last five years. Dell's may have started to turn but they are still dwarfed by Apple's.
Apple has been responsible, in part, for the lackluster margins of its competitors. Apple has sent other technology companies scrambling for answers; that's never good for bottom lines. Apple has consistently increased its margins over the last 11 years. In contrast, its competitors generate weaker and often deteriorating margins, a sign that Apple's dominance remains unchallenged.
Disclosure: I am long AAPL.
