Apple After Steve Jobs: A Legacy of Success

Last Updated Oct 6, 2011 12:21 AM EDT

Apple co-founder and chairman Steve Jobs died Wednesday, the company's board of directors said in a media release, succumbing at age 56 after a long bout with pancreatic cancer.

The passing of Steve Jobs leaves the tech world and Apple (AAPL) in a state of deep mourning. He truly was a visionary and a revolutionary -- someone who conjured products and services we didn't even know we wanted, and which changed our relationship with technology profoundly and probably forever.

But Apple the company and Apple the stock will be more than okay despite the void left by Jobs' death -- initial disappointment over the iPhone 4S launch, notwithstanding. For among Steve Jobs' many legacies is that he bequeathed his successor CEO Tim Cook a company that's in great shape.

Income statements and balance sheets aren't exactly things of beauty, but in Apple's case they're as shiny, appealing and pristine as the gadgets the company churns out. Apple's retail stores, meanwhile, are a model of efficiency.

And, perhaps most important, Apple's pipeline of goodies -- from Macbooks to iPhones to iPads -- are still the envy of the industry. After all, we're just at the very beginning of the tablet age.

The latest financials were stunning, helping propel Apple to become the second most valuable public company in the world. For its most recent quarter, Apple posted a 125 percent jump in profit on more than 80 percent revenue growth.

Operating margins are north of 30 percent and net margins -- real profits after all costs and items are written off -- stand at nearly 25 percent. Even after taxes and depreciation the company keeps almost 25 cents of every dollar in sales.

That's an enviably high-margin business. For comparison, at the other end of the spectrum stands Wal-Mart (WMT), the world's largest retailer. It keeps a net of about 4 cents on the dollar.

As for the balance sheet, Apple's is loaded with cash and has zero debt. As of the latest quarter Apple had more than $28 billion in cold, hard cash and cash equivalents sitting in its coffers and $75 billion in total assets.

That's a rock-solid balance sheet -- one that affords the new leadership with quite a cushion to get things right.

No, you can't just go out and buy a new visionary, but you can plow money into research and development. Or, if shareholders become restive, borrow money at historically low interest rates and -- gasp -- start paying a dividend.

Of course a dividend is hardly necessary at this point. Apple's shares are trading at such low valuation levels the stock looks to have more upside than down.

Then there's the retail business. Apple stores are by far the most profitable in the nation as measured by sales per square foot of retail space, crushing luxury names such as Tiffany (TIF), Coach (COH) and Polo Ralph Lauren (RL), according to RetailSails.

More impressive, the bricks-and-mortar model is accelerating. Apple's sales per square foot grew nearly 50 percent year-over-year to $5,626. For comparison, Tiffany, which came in second to Apple, generated slightly less than $3,000 a square foot.

And then there are iPads, the latest gizmo we didn't know we wanted. Ten years ago, everyone made MP3 players. But consumers didn't want MP3 players. They wanted iPods. Now history looks ready to repeat itself, with iPads as the game-changer gadget in the tablet business.

Don't forget: when Steve Jobs launched the iPad, everyone snickered at the name. Who's laughing now?

What comes after the iPad is anyone's guess. That was Steve Jobs' job. But we're still very early in the iPad cycle. There are years of upgrades to come.

And as for iPhone, well, we're still breathlessly waiting for No. 5.

He will be missed. He is irreplaceable. But Apple's future, even without Steve Jobs, looks plenty bright for many years to come.

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    Dan Burrows, a veteran of Aol's DailyFinance, SmartMoney and MarketWatch from Dow Jones, covers the markets and economy with an eye toward investing for the long haul.

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