Originally Posted by melgross
What some financial people don't understand it that for most of Apple's businesses, they are in a small minority of marketshare, so as long as they make very good products, that marketshare will continue to move up. When they create a new market, they have that first product to lead it. Companies that have that have an automatic advantage. But if the product isn't great, others will take over with the second generation. Investors are afraid that will happen to Apple as its happened to so many other companies in the past, including Apple earlier on when the IBM PC came out.
Take for example the eeePC which everyone came out with a knockoff product and several vendors like Dell and HP put the weak Atom chips in regular laptops and had significant amounts of the product unsold and returned. Bad product = money pit.
In my opinion, Apple is not going to survive just on iPhones, which is where most of their money is, one of two things are going to happen:
a) People hang on to their iPhones 2-3 years and only replace them when the battery no longer charges (which is roughly close to 365x3 = 1000 charge cycles for LiIon batteries) and opt to replace the phone instead of having the phone battery replaced. This is usually what people do with laptops now. A few will switch from iPhones and a few will replace the battery, but most people stick with their favorite brands as long as they like them.
b) Something better than the iPhone will come out and people will instead migrate to that. Think AR contact lenses or glasses with NI input or something hard to conceive right now because todays electronics consume too much power. I don't think there is anything "better" in the phone form factor that will happen anytime soon unless Apple discovers a way to stretch the screen from an iPhone to an iPad in the same device.
For the next 10 or so years, Apple is going to remain in the lead, but not necessarily have the best device. Meanwhile Samsung might release somewhat better devices, but the batteries will last a quarter of the standby time and you'll have to replace them every year when the next device comes out because they won't upgrade the firmware or replace the battery. This is the problem with mobile phones today, is that if the user got them for "free", the don't appreciate or take care of the device and just get another when they break it. Apple makes a profit regardless of the carrier's subsidy. As far as Apple cares, the carrier can subsidize the device to the tune of 600$. I don't think Samsung makes very much from their phones. Nobody gives a damn about how many phones Samsung shipped, only how much were sold. As stated from other sources Android devices come at the expense of feature phones and RIM (which was blind-sided and put out inferior product just like HP did.)
Or Apple can do something absurd like build the California High Speed Rail project, which will tank the stock, but it's something it could do now (in 2012 dollars) and make money forever on. Good luck on the NIMBYs.
Imagine for a minute what an Apple HSR line would be. It would probably be expensive as a plane trip, but every seat would be business class.