Apple may need $137B cash hoard to weather 'very rough' next two years, analyst says - Page 2

 

Stupid comment of the thread award! 

The article covers more than one issue but the part about capital expenditures is not fantasy. If you follow the analysis of Deidu at Asymco you probably recall that Apple's capex has been growing at an incredible rate so that it is at a level similar to chip foundries like Intel. To stay in the game they may need to tap that huge cash reserve as capex continues to soar. I don't see it as apocalyptic but rather evidence of Apple playing the long game. Most were criticizing Apple for building such a large reserve but maybe Apple had the vision to see that success would force the growth of capex and require those reserves in the future.

 

The accountability would come from people (like AI) to stop quoting this nonsense and after a short while, these people would lose their jobs, or the ability to post this crap. Or at the very least, we would not have to read it and comment on it. 

 

I would put more of the blame on AI for propagating known nonsense than for someone stupid saying stupid things. 

According to this author, Apple is going to need its cash to weather the next two years and sets up some kind of negative argument against Apple. Then he admits that new chip fab facilities need to be built because fabricators can't keep up with Apple's demand. Hmmm... Then he says hey, that cash should be used to pay higher dividends. Hmmm... but if it needs its cash to "weather the next 2 years", then how can it possibly make sense to give that cash away to investors?

And then the author really puts his foot in it by saying that Apple needs to compete with "white box" phones, clearly showing AppleInsider readership that he doesn't know Apple at all. This article is pure nonsense. Why are analysts jumping off a cliff when it comes to Apple? Simple. They don't understand the Apple. They don't get Apple's business model. They trash Apple and its stock because it's not fitting into Wall Street's mold or following Wall Street's demands.

Good for Apple! The one time Apple did try to compete by further differentiating its products was almost the death of Apple back in the 90s. Jobs re-focused Apple on just making the best products, not the most products. Apple will continue being Apple, with or without Wall Street. I own Apple stock and will not sell because I want to support this company for doing so much good in the community and treating its employees well.

Wall Street, this author and all of the analysts can spout off all they want.

So you know Tim? Who's "Ivy". Ive is a designer, not a CEO.

Steve also loved the Cube, the HiFi, and intro'd MobileMe.

The problem is that the analysts haven't just be predicting Apple's decline - they've been actively spreading FUD in order to make it fall. Some of the stories are just insane. Even if Apple's profit drops by 99%, it still won't need to dip into its cash hoard. And no one in their right ming expects that to happen.

Now, if the analysts has just stuck to "As Apple's market share has increased and smartphones are approaching saturation in the developed markets, so they won't continue to grow at double digit rates", that might be a reasonable position. Instead, they dream up ridiculous expectations and then hammer Apple for failing to meet these ridiculous expectations that Apple never committed to.

Basically, it's like a fortune teller saying that you're going to die. When you say that doesn't seem likely, they pull out a gun and shoot you. Self-fulfilling prophecy.

If Apple doesn't get their shit together on the desktop & Pro market they are going to end up being a trinket company that spends tons of money to compete in a market that can collapse overnight. Pro users, like my self, kept Apple alive through the lean years. We used to argue about how fast a machine was, and now we are touting how thin it can be made (with lackluster performance)?? iMacs are not pro machines. Like many I also teach, consult and manage computer labs. If I have to go back to Windows to compete in the pro market I'm taking all those others with me. I can't afford to do dual support and teach two systems at once. Apple lost the education market once, and they are just getting it back. It can happen again. And kids buy what they learn on. While the pro market may be a small branch of Apple's total sales, it's halo impact is bigger than they think it is.

Yea its ruff making record profits every quarter. It could be a very hard two years of record breaking sales. 

Anal-ists and there total STUPIDITY!

They are the only ones that see Apple in there own dreams as suddenly drying up with no sales, no products, whatever.

Go to an Apple store in the mall and they will be the only store that is packed, even if there's a Microsoft store right next to it or across from it.

OPEN YOUR EYES Anal-ists!!!

Apple is still running strong as ever, get off your STUPIDITY TRAIN please.

 

He is a bit pessimistic, but this could very well play out like this, which would be bad for my invesments.  We have too many fans here seeing things through pink glasses, which is not better than lowballing it imo.

 

That being said I am not very impress with Apple R&D, but I am still hoping they can make a come back and bring the growth.  ATM Apple is stall in terms of growth and its getting dangerously close of starting to decline. 

7-8% growth isn't stalled. Why aren't u impressed with the R&D? Because Apple hasn't reinvented a new product category? I don't remember Apple reinventing one on a yearly basis.

 

They're just trying to explain why Apple didn't want to distribute $137B cash hoard.  Nothing more.

 

When a stock is down for 6 months there is no rubber band effect to come back up suddenly unless Apple does something spectacular, such as a phenomenal success on iWatch or iTV. Otherwise, APPL will trade in a narrow 10% range for another 3-6 months.

I second that

"Misek said that high-quality products are forcing Apple to invest in next-generation technology."

Oh no! Investing in next-generation technology? Too bad they are being forced to do that--I'm sure they were trying desperately to avoid it.

Does this guy know he's writing about a technology company (and one with a bit of a track record of not sticking with the status quo)?

The execs sell all the shares they get for a reason.  Now they are trying to force them to hold onto a pathetically small amount (about 4% at current prices and salaries).  When you need a payment plan to afford a phone it's impossible to see any "halo" effect taking place and really hard to see people replacing their phone with any frequency at all.  With Cook claiming each slight redesign is "great" and "perfect" it's hard to hope anything really game changing is coming any time soon.

 

Hard to accept, but the best days are behind them.  The next few years are going to be about margin compression and decreasing EPS.  With a 10 multiple it could get pretty painful.  Curious to see how it plays out, but at least a big dividend hike would make the wait not as difficult and bring in another class of investor.

Take your blinders off. I hate repeating myself.

Really? can you prove the assertion that Apple had the most profitable year in human history? How about just in modern history? How is this measured? percentage of GNP? By percentage of human wealth? You don't think there were more profitable enterprises, say the Spanish collection of gold from the new world, ones that had the benefit of slave labor that might have had a better year? How about Standard Oil under Rockefeller at the turn of the century (he is considered the richest man in modern history with over 660B 2007 dollars.)

 

Congratulations, I herby award *you* the "stupid comment of the thread award."

Well, No, it's not anywhere near good enough for me and I doubt it greatly.

 

My point is that people are swallowing whole this "most profitable in human history" meme without even examining it. I think it's *very* unlikely that the claim is true. There have been many enterprises that have been incredibly profitable and when compared properly I doubt Apple is the one on top. As I mentioned earlier, Rockefeller was worth over 660B 2007 dollars. I doubt he got that way because Standard Oil was anemic in the profit category. Imagine having a monopoly on oil. Then there's the mining stupendous quantities of gold from certain mines in the Black Hills over a very short period of time (pretty fracking profitable in it's time.) If people are just looking at dollar amounts without adjusting them for inflation, it's a pretty meaningless metric.

 

Edited by DESuserIGN - 2/28/13 at 10:12pm

I disagree that Apple is going to have a tough 2 years. Tim Cook runs Apple like a machine, a relentless, merciless machine :) And he will make it more and more efficient until the competitors have a tough time competing. All those people who worry about Apple not having a product that people in the developing world can afford, rest assured that with the master of efficiency at the helm, the iPhone will be as cheap as it humanly can be.

 

And remember Apple invented the tablet market (the workable one at least) without which many people in such countries would not be able to have a computer *at all*.

Forget Rockefeller then, do you remember when Grog had two wives and an obsidian tipped spear, and the rest of the village had only one wife and just wooden clubs?

Unadjusted for inflation. Why is it meaningless? They made more raw money than any other company.

 

Which quarter has HTC lost money?  I don't recall one....  Sure, they've fallen from their peak, but they're still doing better than many others...