Apple an 'antifragile monopoly,' more secure than critics believe, analyst claims

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  • Reply 21 of 59
    seanismorrisseanismorris Posts: 1,624member
    jungmark said:
    "Some critics have in fact accused Apple of complacency, citing a lack of revolutionary products. "

    These same critics probably think the Apple watch is a flop and amazon echo/Google home is the future. Um no mention that the watch sold more than both of those devices, combined. 
    It's only a flop when expectations are unrealistic.  Everyone "needs" a phone.  No one needs a watch or an Echo... they're gadgets.

    If someone thought Apple would sell 100 million Iwatches they're out of their freaking mind.
    watto_cobra
  • Reply 22 of 59
    qwweraqwwera Posts: 281member
    Analysts are as useful and insightful as a rock laying in the gutter. I think l we can all agree time has proven that to be true.
    caliwatto_cobra
  • Reply 23 of 59
    tundraboytundraboy Posts: 1,884member
    Christ, stop throwing around words that you don't fully understand.
    'Monopoly' means you are the lone seller.
    You can have monopoly power without being a monopoly.
    You can behave monopolistically without being a monopoly.
    Monopolistic behavior is how a firm with monopoly power behaves.
    Monopoly power a.k.a. Market power a.k.a Pricing power means you have the ability to set a price above your competitors and not lose all your customers.  The less customers you lose, the greater is your power.
    In a market with many competitors, you achieve some degree of market power through unique product differentiation a.k.a branding.  I.e. You are able to raise prices above your competitors (and make more profit, otherwise what's the point of raising prices) because you are perceived by customers as offering something unique that is of value to them.
    All the article is saying is that Apple, despite analysts and pundits talking as if Apple's success is so precarious, actually has, for whatever reason, very robust market power and all they need to do is keep on doing what they're doing and they'll be fine.
    Now all the people who are saying that Apple is doomed because they are not always the lead innovators anymore are not listening to what Buffet is saying.  He said Apple is now a branded consumer products company that happens to be a tech company.  Whether Apple has the latest whiz-bang tech matters only to a very small (and anal-retentive, I might add) segment of its customers.  Most iPhone customers don't give a hoot whether it's an OLED or LED screen that's on their Phone.  They just want it to work right AND work more or less as expected.  Just like coke drinkers do not obsess about the ingredients that go into the 5 cents of carbonated sweetened water that they're willing to pay $1.50 for. (remember pricing power?)
    Does this mean Apple can ease up on the R&D? No, otherwise they'll rapidly fall behind, ruin their brand reputation and lose their customers.  But it does mean they need to be very careful in introducing new features and technology into their product, just like Coke tinkers with the traditional coke 'taste' at their peril.

    brucemcapple jockeyradarthekatStrangeDaysnetmage
  • Reply 24 of 59
    brucemcbrucemc Posts: 1,541member
    Everybody needs to chill out. Go and listen to the Critical Path podcast (latest one), which is hosted by Horace Dediu, who did the work. He provides all of the context around the few snippets that AI has used here in this article.  

    He is not implying that Apple has a traditional monopoly at all - he clearly states the opposite. He basically talks about the big 5 in tech, and how the reason for the much higher P/E ratios attributed to the others is that they are perceived to be "like" monopolies (none of them are traditional monopolies either).  The clear leaders in their field, with no real competition in their core business, and big barriers to entry. 

    Apple is perceived the opposite - no end of competition. Always under attack. The iPhone killer is right around the corner.  Hence discounted to the S&P 500 average, while the others are much higher. But he then looks at pricing power, and notes that Apple has maintained or increased pricing in most products over time. iPhone and Mac at highest levels in recent quarter.  That Apple has very strong market power like a monopoly.  And that with Facebook and Google their price per unit of advertising is going down (overall revenue still rising of course). So he simply asks the rhetorical question - who is the monopoly.  And perhaps, given Apple has been in business for 40 years, perhaps they are not so vulnerable after all. 

    Anti-fragile is used due to the fact that Apple does face competition all of the time, and thus in order to succeed over the decades they have developed the culture, processes and approach on how to deal with that. Likening it to someone who is exposed to infections all the time and develops resistance. And this might make Apple stronger in the long run than some of the firms who are like de facto monopolies. 

    But what does he know vs the geniuses on the AI forum...
    edited March 2017 bestkeptsecretdelreyjonesradarthekatStrangeDaysnetmagecornchip
  • Reply 25 of 59
    brucemcbrucemc Posts: 1,541member
    Right... and BlackBerry had a monopoly in smart phones, until it didn't.

    If Apple makes a miss step 6months later you'll have a new dominant player.  

    Apple doesn't have a monopoly because of pricing power.

    Monopolies are about dominance + barriers of entry.  Anyone can make a smart phone, it's just difficult (but not impossible) to take mind share.  If Amazon partnered with T-mobile (for example) and got aggressive with pricing, they could become a new dominant player.

    Cable company's have monopolies and it's basically impossible to complete with them.  They 'buy' regions of dominance from the government.  Wireless providers do the same thing with buying spectrum.  Unless you have 10s of billions of dollars you're won't and never will be able to compete.

    Even Apple and Google can't make inroads without basically buying an established player.  Google fiber's failure is an example...
    if you don't know the difference between RIM (Blackberry) and Apple, or between an iPhone and a Blackberry device, then I am afraid there is no hope for you. 
    radarthekatnetmagecornchip
  • Reply 26 of 59
    Apple in practice has monopolized or totally dominated all other companies in their category in profits. How or why one would nit pic that reality is odd. Of course, they are not a monopoly in an anti trust sense. They are good corporate citizens, generally play fair by the rules as currently on the books, environmentally sensitive and yet still retains an ASP for iPhones which monopolizes the profits available in their category. I say... Wait til they figure out India.
    And, importantly, Apple continues to offer, despite soundings of the naysayers, an ideal that is valuable to organizations and institutions with a conscience. So, the fact is that a company, with the right ethics and purpose, can thrive, innovate and monopolize profits.
    This is good! A light in the dark!
    But, as relates to Apple being anti fragile, the article is correct related to innovation and the wide moat theory. What is of important consideration is the dependence on A friendly and accommodating China. I believe Apple and China truly want to continue the successful status quo regarding US China foreign exchange. But the wild cards are still in play. South China Sea, North Korea and US Sino relations in the era of Trump is unknown by US citizens and the Chinese. 
    Just as China is punishing Lott, a South Korean Company, for the installation of THAAD on the Korean Peninsula by the US and South Korea, Apple is the perfect American foil. Trump should tread lightly in defense of American corporations doing business in China. Think before you act.
    edited March 2017 baconstangbrucemccornchip
  • Reply 27 of 59
    wood1208wood1208 Posts: 2,905member
    There is no such thing as "anti-fragile monopoly". At some point disruptive tech comes along and changes into fragility. Google may be more anti-fragile due to it's near monopoly with Search than Apple's with iphone..In fact, Apple is in constant state of paranoid to keep it's products viable.
    edited March 2017
  • Reply 28 of 59
    Wise corporate leaders learn from the mistakes of the past. I have complete confidence that Apple will continue to innovate and move forward in a sustainable way. They have a wide lead in many important technical, manufacturing and marketing indicators. These advantages are theirs to lose. I can't believe they will make those errors. Apple fragility is foreign policy presently, beyond their control to a great extent.
  • Reply 29 of 59
    @Brucemc, thanks for the info. I'm downloading the podcast now.
    delreyjones
  • Reply 30 of 59
    calicali Posts: 3,494member
    jungmark said:
    "Some critics have in fact accused Apple of complacency, citing a lack of revolutionary products. "

    These same critics probably think the Apple watch is a flop and amazon echo/Google home is the future. Um no mention that the watch sold more than both of those devices, combined. 
    It's only a flop when expectations are unrealistic.  Everyone "needs" a phone.  No one needs a watch or an Echo... they're gadgets.

    If someone thought Apple would sell 100 million Iwatches they're out of their freaking mind.
    100 million is a low achievable number. I wouldn't be surprised if Apple is a quarter way there. 
  • Reply 31 of 59
    brucemc said:

    He is not implying that Apple has a traditional monopoly at all - he clearly states the opposite. 
    You're absolutely right.  Dediu is a singular genius and until you have a thorough understanding of his analysis, you won't have a deep understanding of Apple.  As you say, Dediu makes it clear that while Apple is not a traditional monopoly, they have some of the characteristics of a traditional monopoly.  Apple does indeed have a monopoly on the Apple ecosystem, and there's never been a precedent for this business.  
    netmage
  • Reply 32 of 59
    avon b7avon b7 Posts: 7,622member
    avon b7 said:
    muadibe said:
    Good observations.   One point: ".. but these technologies have already been implemented in some Android phones." And what new 'innovations' have the Android manufactures implemented since OLED screens and wireless charging?  Since Apple is apparently always behind, surely there are several other new 'innovations' that Apple must be behind on.

    Fingerprint Scanner Gestures?
    AI for phone optimization?
    Fingerprint scanner gestures? Boy you're really digging deep for those missing, uh, innovations. 

    And I don't even know what AI phone optimization means. I'm sure it's mind blowing, tho.
    Clearly spoken by someone who has never even used fingerprint gestures and completely fails to grasp the practicality and simplicity of the idea.

    As for AI optimization:

    http://www.androidauthority.com/huawei-superphone-730347/


    edited March 2017
  • Reply 33 of 59
    rogifan_newrogifan_new Posts: 4,297member
    What is the point of this research no one other than a pro-Apple sell side analyst providing the bull case for the company? And has happened several times before Wall Street is bullish on Apple because a new form factor iPhone is coming out and they think that will drive huge sales (or as they stupidly call it a "super cycle"). Then of course next year they'll all be Apple bears again, talking about tough comps, incremental updates, lack of innovation (all because the form factor on the iPhone didn't change). Rinse and repeat.
  • Reply 34 of 59
    StrangeDaysStrangeDays Posts: 12,834member
    avon b7 said:
    avon b7 said:
    muadibe said:
    Good observations.   One point: ".. but these technologies have already been implemented in some Android phones." And what new 'innovations' have the Android manufactures implemented since OLED screens and wireless charging?  Since Apple is apparently always behind, surely there are several other new 'innovations' that Apple must be behind on.

    Fingerprint Scanner Gestures?
    AI for phone optimization?
    Fingerprint scanner gestures? Boy you're really digging deep for those missing, uh, innovations. 

    And I don't even know what AI phone optimization means. I'm sure it's mind blowing, tho.
    Clearly spoken by someone who has never even used fingerprint gestures and completely fails to grasp the practicality and simplicity of the idea.

    As for AI optimization:

    http://www.androidauthority.com/huawei-superphone-730347/
    You're missing my point -- just because your random Android knockoff has a some random feature, does not mean Apple is missing the boat on innovation. In fact I'd argue they're likely out-innovating in hardware tech your knockoff manufacturer who simply dumps Android onto their current handset, throws it against the wall, and hope it sticks. Meanwhile, if it weren't for Apple releasing TouchID your knockoff wouldnt even have a fingerprint scanner. That's the point.

    You have an iPhone-knockoff and in two years nobody will even know what it was, likely including you. I still have iPhone 4-generation devices in use by family members.
    edited March 2017 watto_cobra
  • Reply 35 of 59
    brucemcbrucemc Posts: 1,541member
    wood1208 said:
    There is no such thing as "anti-fragile monopoly". At some point disruptive tech comes along and changes into fragility. Google may be more anti-fragile due to it's near monopoly with Search than Apple's with iphone..In fact, Apple is in constant state of paranoid to keep it's products viable.
    Actually, the reason Apple is described as anti-fragile is that they are always facing competition. They have for 40 years. 10 years in the iPhone, but still on top and growing their premium segment.  Faced a lot of competition in the emerging smart watch segment but thriving. Apple is good at facing the competition. 

    Google has a de facto monopoly in search, but perhaps that makes them a bit complacent?  
    watto_cobra
  • Reply 36 of 59
    SpamSandwichSpamSandwich Posts: 33,407member
    sog35 said:
    lkrupp said:
    So after years of predicting Apple’s demise because it doesn’t follow traditional Wall Street rules the AAAA (Amalgamated Asshat Analyst Association) now has to come with some theory as to why Apple is still around. And THIS is what they came up with? Apple is a monopoly? 
    To be fair the person who came up with the Apple monopoly thesis is Horace Deidu who runs Asymco. HE HAS ALWAYS BEEN VERY POSITIVE ABOUT APPLE AND NEVER SAID THEY WERE DOOMED. NEVER.

    Check out his webiste.

    http://www.asymco.com/
    The dude is flatout the best Apple analyst on the planet. He does not give a crap about price targets or other bullshit short term crap. He sees the big picture and was the first analyst to zero in on Apple services.


    On the other hand the clown UBS analyst Steven Milunovich has said numerous times that Apple is in deep trouble. He's a total idiot and should be ignored. Just don't throw Horace Deidu in the same group of asshats.


    Horace is in fact one of the better educated Apple analysts, but he is still woefully under-informed about real-world economics. I've gotten into several arguments with him on various occasions because he wanders into speculative areas outside his experience.
    cornchip
  • Reply 37 of 59
    avon b7avon b7 Posts: 7,622member
    avon b7 said:
    avon b7 said:
    muadibe said:
    Good observations.   One point: ".. but these technologies have already been implemented in some Android phones." And what new 'innovations' have the Android manufactures implemented since OLED screens and wireless charging?  Since Apple is apparently always behind, surely there are several other new 'innovations' that Apple must be behind on.

    Fingerprint Scanner Gestures?
    AI for phone optimization?
    Fingerprint scanner gestures? Boy you're really digging deep for those missing, uh, innovations. 

    And I don't even know what AI phone optimization means. I'm sure it's mind blowing, tho.
    Clearly spoken by someone who has never even used fingerprint gestures and completely fails to grasp the practicality and simplicity of the idea.

    As for AI optimization:

    http://www.androidauthority.com/huawei-superphone-730347/
    You're missing my point -- just because your random Android knockoff has a some random feature, does not mean Apple is missing the boat on innovation. In fact I'd argue they're likely out-innovating in hardware tech your knockoff manufacturer who simply dumps Android onto their current handset, throws it against the wall, and hope it sticks. Meanwhile, if it weren't for Apple releasing TouchID your knockoff wouldnt even have a fingerprint scanner. That's the point.

    You have an iPhone-knockoff and in two years nobody will even know what it was, likely including you. I still have iPhone 4-generation devices in use by family members.
    No. I see your point. That's not the issue.

    You seem to have forgotten that my original reply was to someone else and as part of that reply I said Apple couldn't be expected to be first with innovation if they only release one phone a year.

    The same user asked what Android phones had given us after OLED. I gave a spread of answers that went from the simplest (fingerprint scanner gestures) to the most complex (AI phone optimization).

    These are not random or knock offs. 

    Even the fingerprint scanner on the iPhone was developed by someone else. All Apple did was buy the company and integrate the tech. No real innovation as such. Just a repackaging of something that has been around on computers for years. It wasn't even the first phone to feature a fingerprint scanner. Not that I find that an issue at all. I'm all for buying in someone else's work instead of reinventing the wheel.

    Are you saying that AI that learns from your personal use of the phone to optimise response times and reduce memory usage through your usage habits and tries to guess which part of the screen you will touch next is some random knock off?

    Credit where credit is due. Many Android phone features are cool and Apple should unashamedly borrow them if they make the experience better. Being first is not really important.
    edited March 2017 Roger_Fingas
  • Reply 38 of 59
    gatorguygatorguy Posts: 24,176member
    What a ridiculous story premise.

    Who in their right mind would question whether Apple's business methods have staying power. I've not heard anyone in YEARS say they thought Apple was in any danger business-wise. Heck with over $250B in the bank and if just collecting interest on it if nothing else they could lose $10B every year and still be viable 30 years out. What a silly idea for a story basis. 
    edited March 2017 SpamSandwichavon b7
  • Reply 39 of 59
    avon b7 said:
    avon b7 said:
    muadibe said:
    Good observations.   One point: ".. but these technologies have already been implemented in some Android phones." And what new 'innovations' have the Android manufactures implemented since OLED screens and wireless charging?  Since Apple is apparently always behind, surely there are several other new 'innovations' that Apple must be behind on.

    Fingerprint Scanner Gestures?
    AI for phone optimization?
    Fingerprint scanner gestures? Boy you're really digging deep for those missing, uh, innovations. 

    And I don't even know what AI phone optimization means. I'm sure it's mind blowing, tho.
    Clearly spoken by someone who has never even used fingerprint gestures and completely fails to grasp the practicality and simplicity of the idea.

    As for AI optimization:

    http://www.androidauthority.com/huawei-superphone-730347/


    Ios already does all of this.
    determening what app you're going to use based on time and location, and backround app refreshing, done.

    System ram and cpu, why do you think they use a micro kernel?
    Only android will benefet from this.
    AI optemisation, lol.
    StrangeDaysnetmagewatto_cobra
  • Reply 40 of 59
    tundraboy said:
    Christ, stop throwing around words that you don't fully understand.
    'Monopoly' means you are the lone seller.
    You can have monopoly power without being a monopoly.
    You can behave monopolistically without being a monopoly.
    Monopolistic behavior is how a firm with monopoly power behaves.
    Monopoly power a.k.a. Market power a.k.a Pricing power means you have the ability to set a price above your competitors and not lose all your customers.  The less customers you lose, the greater is your power.
    In a market with many competitors, you achieve some degree of market power through unique product differentiation a.k.a branding.  I.e. You are able to raise prices above your competitors (and make more profit, otherwise what's the point of raising prices) because you are perceived by customers as offering something unique that is of value to them.
    All the article is saying is that Apple, despite analysts and pundits talking as if Apple's success is so precarious, actually has, for whatever reason, very robust market power and all they need to do is keep on doing what they're doing and they'll be fine.
    Now all the people who are saying that Apple is doomed because they are not always the lead innovators anymore are not listening to what Buffet is saying.  He said Apple is now a branded consumer products company that happens to be a tech company.  Whether Apple has the latest whiz-bang tech matters only to a very small (and anal-retentive, I might add) segment of its customers.  Most iPhone customers don't give a hoot whether it's an OLED or LED screen that's on their Phone.  They just want it to work right AND work more or less as expected.  Just like coke drinkers do not obsess about the ingredients that go into the 5 cents of carbonated sweetened water that they're willing to pay $1.50 for. (remember pricing power?)
    Does this mean Apple can ease up on the R&D? No, otherwise they'll rapidly fall behind, ruin their brand reputation and lose their customers.  But it does mean they need to be very careful in introducing new features and technology into their product, just like Coke tinkers with the traditional coke 'taste' at their peril.

    Well, I think that Apple seriously tested their pricing power with the new MacBook's Pro they have given us. 
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