Could Apple Buy A Third Of The World’s Gold?

Is there anything Apple Inc. (NASDAQ:AAPL) can’t do?

First it revolutionized the personal computing business. Then, with the launch of the iPod in 2001, it forced the music industry to change its tune. Against initial market reservations, the company succeeded at making Star Trek-like tablets hip when it released the iPad in 2010. And in Q1 2015, a record 75 million units of its now-ubiquitous iPhone were sold around the globe. The smartphone’s operating system, iOS, currently controls a jaw-dropping 89-percent share of all systems worldwide, pushing the second-place OS, Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL)’s Android, down to 11 percent from 30 percent just a year ago.

As you might already know, the company that Steve Jobs built—which we own in our All American Equity Fund (GBTFX) and Holmes Macro Trends Fund (MEGAX)—is history’s largest by net capitalization. In its last quarterly report, Apple posted a record $75 billion in revenue and is now sitting pretty on a mind-boggling $180 billion in cash. Many analysts believe the company will reach a jaw-dropping $1 trillion in market cap.

So what’s Apple’s next trick?

How about moving the world’s gold market?

iGold

This April, Apple will be venturing into the latest wearable gadget market, the smartwatch, joining competitors such as Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), Garmin and Sony Corporation (NYSE:SNE) (TYO:6758). All of the models in Apple’s stable of watches look sleek and beautifully designed—just what you’d expect from Apple—and will no doubt be capable of performing all sorts of high-tech functions such as receiving text messages, monitoring the wearer’s vitals and, of course, telling time.

But the real story here is that the company’s high-end luxury model, referred to simply as the Apple Watch Edition, will come encased in 18-karat gold.

What should make this news even more exciting to gold investors is that the company expects to produce 1 million units of this particular model per month in the second quarter of 2015 alone, according to the Wall Street Journal.

That’s a lot of gold, if true. It also proves that the Love Trade is alive and well. Apple chose to use gold in its most expensive new model because the metal is revered for its beauty and rarity.

To produce such a great quantity of units, how much of the yellow metal might be needed?

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Moon Kil Woong 5 years ago Contributor's comment

Yawn, when a tech company uses gold as a selling point for their product it always means sell. Sadly this phenomenon tends to be Asian companies trying to enter into the tech market, not someone like Apple even though I understand their desperation to make a next tech product move from Jobs' legacy which they seem to be unable to do since his departure. Ooops I forgot the giant grounded saucer... Oh Jobs thought of that too. Oh, did I mention the Apple car, oh Jobs thought up that one too. Gee, did I make my point?