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Barclays downgrades rating on Apple stock due to maturing smartphone market, tells investors to... - Page 2

post #41 of 96
Quote:
Originally Posted by nagromme View Post



I don't think anyone--not Apple, not anyone--will ever invent a product that is as WIDELY desired as a smartphone, AND costs as much. <...>

 

 

What about something which would enable you to monitor the most precious thing you possess : your health ?

There is more stupidity than hydrogen in the universe, and it has a longer shelf life.

Frank Zappa

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There is more stupidity than hydrogen in the universe, and it has a longer shelf life.

Frank Zappa

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post #42 of 96
Quote:
Originally Posted by pjscar View Post
 

Been reading this board for several years but first time post.   Yeah, I am a share holder.  I have to laugh to the responses here when investment firms downgrade APPL,   Face it folks, until Apple develops new products the stock is range bound.  I think we have been fortunate it has stayed above $500.  Apple is a growth company and until there are signs of growth, no buy back, dividend increase, etc., is going to really move the valuation or the stock price.  Its the way of the market.   I own a few shares of Tesla, unfortunately not enough, and it announced it is going to sell an additional 3-5,000 cars next year and the stock price doubled.   makes no sense, but that is the way it is....

 

You're on the wrong forum if you own APPL stock. The fundamental issue is that AAPL's valuation is already artificially low. When you remove cash, it's P/E is less than 8. For sure, a company's actual value versus the stockmarket's valuation is not going to match up because most stock traders are nothing more than gamblers. Over the next 10 years, AAPL will continue to increase in actual value. Whether the stock price reflects that is, as always, a guess.

post #43 of 96
Quote:
Originally Posted by Rogifan View Post

Why does AI publish this garbage....the same garbage that gets trotted out on Business Insider for page views. Ooh someone compared Apple to Microsoft, quick throw up an article because we know it will get lots of clicks and will be great for trolling. 1rolleyes.gif

 

Well, we have to separate what Wall Street wants from Apple from what WE want out of Apple, and they are two different things. Wall Street wants continuous growth to justify the stock price. WE want great, quality products, innovation, etc., and don’t really care about marketshare and the race to the bottom. Instead of Microsoft let’s take AT&T. T has been trading in a narrow range ($30-$35) for at least the last decade and they are still one of the most widely held stocks in the world. They pay a nice dividend and nobody is worried about AT&T going out of business. It’s a safe stock for mom and pop’s retirement IRA. As a few analysts have pointed out Apple is bedeviled by the law of large numbers. There’s no way they can continue to grow at the pace they have for the last decade. So Wall Street is apoplectic.

 

Finally, whoever said the stock market is rational? Just look at GOOG for the perfect example of this irrationality.

post #44 of 96
Quote:
Originally Posted by Constable Odo View Post
 

Investors have been stepping aside from Apple since the infamous share price fiasco in 2012 when Apple handed over the smartphone market to Samsung.  There's probably no recovery from that.  It definitely left Wall Street and Apple shareholders with a bitter taste in their mouths.  Most successful companies with wads of cash don't give their market share position away that easily.  Even after this recent buyback Apple shares are still stuttering and misfiring like some ancient engine with bad plugs and fouled carbs.  Everything Apple does is like pouring sugar into a gas tank and the share price tanks.  Meanwhile, Google is running like a world-class F1 racer leaving Apple sucking fumes.

 

Apple really should have gone after Tesla to show that it means business.  Every time Apple's share price moves up a bit, an analyst or two will jump in and say Apple has gone up TOO much and downgrade the stock.  Apple's iPhone and tablet business has been completely overwhelmed by half-priced Android devices.  Most consumers simply can't resist really cheap devices because they think they're getting a bargain.  I'm not sure whether Apple deserves a downgrade or not but I always expect it to happen.  The stock has no momentum whatsoever.  It will move up and bit and then boom, analyst downgrade and share collapse.  It's really a pain to be an Apple shareholder nowadays while the rest of the market is on a roll.  At least I can count on the dividends to see me through.  Apple refuses to play Wall Street's game and would rather sit on a mountain of cash than excite Wall Street investors.  That's the breaks.  Apple can't seem to increase institutional ownership which pretty much shows Apple has stagnated.

Apple really should have gone after Tesla to show that it means business. I do not think you would have been happy because here what would have happened if Apple had done or does as you write... Every time Apple's share price moves up a bit, an analyst or two will jump in and say Apple has gone up TOO much and downgrade the stock. Wall Street would have found a way to shred the purchase and make it a negative. Not one positive would have been written about the purchase.

 

After selling 51 million iPhones and 26 million iPads, which were more than it had ever sold in a three-month period, Wall Street and you were not happy. Apple earned more money than it had ever earned. The amount ranked Apple as the fourth largest ever earned by any company in the world and the largest by a non-oil company. Wall Street dumped Apple's stock. You now write... Apple's iPhone and tablet business has been completely overwhelmed by half-priced Android devices.

 

Of the 210 million mobile phones in the USA market in 2013, Apple reportedly captured 45% or 94.5 million of the sold mobile phones. What does Barclay's decide to do? Downgrade Apple. What do you write? Apple refuses to play Wall Street's game and would rather sit on a mountain of cash than excite Wall Street investors.

 

Apple cannot win because Wall Street has chosen to not allow it to win.

post #45 of 96
Quote:
Originally Posted by PhilBoogie View Post

With Facebook having some 1.2B users, wouldn't that market me saturated as well? Why hasn't their stock been down rated¿

 

Look at their financials...

 

Operating income:

Facebook      2012           538,000,000

                        2013       2,804,000,000

 

Apple              2012       55,000,000,000

                        2013        50,000,000,000

 

Obviously Apple makes way more than Facebook, but stock price is a valuation.  Apple is valued way higher than Facebook.  Apple isn't doomed by any stretch- they are simply valued at a 'company that makes around 50 bil a year'  The downgrade is just saying if you're an investor don't expect Apple shares to move up much unless they find a way to be a company that makes more than 50b a year.  75% of Apples income is iPad and iPhone related.  Apple owns 80% of the profits in the high end market whose growth has more or less stopped.  So far this year it looks like Apple will break even or make slightly less than their 2013 numbers.  Again, Apple isn't doomed, they are just correctly valued for their current earnings.  If they take the world by surprise and have a new breakout product, that could change the outlook.  In order for that 'new thing' to have meaningful impact to Apples financials it would have to be a behemoth right out of the crate to even be a ripple in the iPhone stream.  That particular analyst doesn't view that as likely.

 

When Facebooks numbers flatten out, it will face the same downgrade status.

 

Take the passion out of it.  Companies get upgraded and downgraded all the time.  For some reason Apple fans take it personally and/or think Apple is being singled out when it happens to Apple.  It just isn't the case.

post #46 of 96
I've said before that I don't like these long quiet periods from Apple because they create a vacuum that gets filled with FUD and D&G. But, and this is a big BUT, I'm glad Apple beats to its own drum and doesn't make product decisions based on Wall Street analysts or some need to match what others are doing. I trust that Cook and team are doing what they think is best for Apple not what will give CNBC something to talk about for a day.
post #47 of 96
Being that Apple is a Barclays partner in the US for consumer financing, that's a pretty crappy move.
post #48 of 96
Oh God, you people are so stupid. Constable Odo is the smartest guy in the room.
post #49 of 96
Originally Posted by Potsie Webber View Post
Oh God, you people are so stupid. Constable Odo is the smartest guy in the room.


Both of you need to work on typing your “/s”. :lol:

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #50 of 96
Quote:
Originally Posted by Frood View Post

Quote:
Originally Posted by PhilBoogie View Post

With Facebook having some 1.2B users, wouldn't that market me saturated as well? Why hasn't their stock been down rated¿

Look at their financials...

Operating income:
Facebook      2012           538,000,000
                        2013       2,804,000,000

Apple              2012       55,000,000,000
                        2013        50,000,000,000

Obviously Apple makes way more than Facebook, but stock price is a valuation.  Apple is valued way higher than Facebook.  Apple isn't doomed by any stretch- they are simply valued at a 'company that makes around 50 bil a year'  The downgrade is just saying if you're an investor don't expect Apple shares to move up much unless they find a way to be a company that makes more than 50b a year.  75% of Apples income is iPad and iPhone related.  Apple owns 80% of the profits in the high end market whose growth has more or less stopped.  So far this year it looks like Apple will break even or make slightly less than their 2013 numbers.  Again, Apple isn't doomed, they are just correctly valued for their current earnings.  If they take the world by surprise and have a new breakout product, that could change the outlook.  In order for that 'new thing' to have meaningful impact to Apples financials it would have to be a behemoth right out of the crate to even be a ripple in the iPhone stream.  That particular analyst doesn't view that as likely.

When Facebooks numbers flatten out, it will face the same downgrade status.

Take the passion out of it.  Companies get upgraded and downgraded all the time.  For some reason Apple fans take it personally and/or think Apple is being singled out when it happens to Apple.  It just isn't the case.

You should ask a mod to make this a sticky to every thread on the topic of (Apple) stock; I think you're very spot on.
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post #51 of 96
Don't they have to disclose that they have a massive call spread in favor of the share price tanking? Isn't this manipulation 101 and illegal?
post #52 of 96
Quote:
Originally Posted by iObserve View Post

Don't they have to disclose that they have a massive call spread in favor of the share price tanking? Isn't this manipulation 101 and illegal?

How are call spreads used in Bear investing?   Why not use puts?

post #53 of 96
Originally Posted by AppleInsider View Post
We believe Apple's story is all about iPhones and 'new categories' seem to be designed to make the iPhone more useful ...

 

Aha.  There's your problem, Ben.

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post #54 of 96
Ben A. Reitzes should be thrown in jail for stock price manipulation. Barclays is a joke. This whole idea of randomly setting a target stock price needs to be outlawed by the SEC right now! It is a self serving exercise that benefits these Wall Street clowns.
post #55 of 96
Quote:
Originally Posted by Roly View Post

Someone said: "I think there is something that report overlooked, the actual hardware account for a fraction of Apple revenu. Apple is makings a lot more money selling digital media and apps than selling iOS or Mac hardware".

Actually that's not true - Apple makes the vast majority of it's profits from selling hardware. It's not making 'a lot more money' selling digital media and apps. Where are you getting this information from?

 

 

I believe the reality is that Apple makes most of its money from hardware, but it makes more money from content than some other large companies are making in total. It is making something like $7 Billion in revenue from iTunes a quarter. $28 Billion in annual revenue eclipses quite a few very good companies.  

post #56 of 96

I sincerely hope that everyone who was involved with this prediction at Barclays and everyone who listens to this prediction loses everything they ever had in stocks. Apple is bleeding good news. Read the latest on China Mobile. This is all just a game to drive prices back down so the astute morons at Barclays can then chasing their tune and buy, buy, buy! Market manipulation by a few greedy evil trolls. 

post #57 of 96

You forgot the valuation part, FB is valued at 53 times earnings in 2014 vs AAPL's 13 (before discounting for cash). Yes, FB grew faster than AAPL last year (who knows for how long), but their valuation assumes that they will grow something like 4 times faster than AAPL for the next couple of years. They might just do that, but assuming zero growth for AAPL is perhaps too conservative.

post #58 of 96
Quote:
Originally Posted by Constable Odo View Post

Investors have been stepping aside from Apple since the infamous share price fiasco in 2012 when Apple handed over the smartphone market to Samsung.  There's probably no recovery from that.  It definitely left Wall Street and Apple shareholders with a bitter taste in their mouths.  Most successful companies with wads of cash don't give their market share position away that easily.  Even after this recent buyback Apple shares are still stuttering and misfiring like some ancient engine with bad plugs and fouled carbs.  Everything Apple does is like pouring sugar into a gas tank and the share price tanks.  Meanwhile, Google is running like a world-class F1 racer leaving Apple sucking fumes.

Apple really should have gone after Tesla to show that it means business.  Every time Apple's share price moves up a bit, an analyst or two will jump in and say Apple has gone up TOO much and downgrade the stock.  Apple's iPhone and tablet business has been completely overwhelmed by half-priced Android devices.  Most consumers simply can't resist really cheap devices because they think they're getting a bargain.  I'm not sure whether Apple deserves a downgrade or not but I always expect it to happen.  The stock has no momentum whatsoever.  It will move up and bit and then boom, analyst downgrade and share collapse.  It's really a pain to be an Apple shareholder nowadays while the rest of the market is on a roll.  At least I can count on the dividends to see me through.  Apple refuses to play Wall Street's game and would rather sit on a mountain of cash than excite Wall Street investors.  That's the breaks.  Apple can't seem to increase institutional ownership which pretty much shows Apple has stagnated.

Making bad management decisions to please Wall Street would seem a far worse course of action.
Been using Apple since Apple ][ - Long on AAPL so biased
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #59 of 96
Quote:
Originally Posted by SudoNym View Post
 

How are call spreads used in Bear investing?   Why not use puts?

Call spreads can be bullish or bearish (as can put spreads).  It all depends on which calls (the ones you are selling or the ones you are buying) are at higher strike prices.

 

Thompson 

post #60 of 96

well, after earnings report on January stock recovered faster than i expected, so this "correction" is nothing new for everyone who owns AAPL. Im curious what will happen in next weeks, because:

 

monday - samsung galaxy S5 (potential downside for AAPL)

friday - shareholder meeting (potential down / upside)

 

and probably most importantly, overall market correction is waiting, but here is possible that if market will fall 10%, AAPL can fall lower 5% or so.

post #61 of 96

That is a weird call to make with all the rumors going on about an Apple TV w/apps and games, iWatch, iphablet, ipad pro and a bigger screen iphones....

post #62 of 96
Quote:
Originally Posted by thompr View Post
 

Well even if Apple's business stays at zero growth, they could still buy back half of their remaining shares in 5 - 10 years, depending on repatriation tax implications or issuing debt.  If you assume their P/E stays the same (and there really isn't any room for it to go lower) then that would result in a doubling of the share price for that reason alone.  Now before anyone starts pointing out that buybacks didn't work out so well for company X, please note that all such companies began with large P/Es that needed to come down to match their level of low - or no - growth.

 

Thompson

 

True.  and imo Apple will be able to pull off some growth, even if its only 10% per year.

post #63 of 96
AAPL is MANIPULATED by VILLAIN !
Barclay Has MUCH to Do With " High Frequency Trader " GETCO !!!
Both Barclay and GETCO are Lackay and BAGMAN of VILLAIN who Masterminds The Whole Scenario ofFelling Down Apple for EVIL's SAKE.
This is A War: Main Street ( Ordinary People ) VS Wall Street ( Controlled by DEMON )
Get ANGRY, Americans !
Not Only Economy but Politics of Your Country is Still SUBORDINATE of VILLAIN which Lives in EUROPE !
GS ( Goldman Sachs ), Barclay etc. etc., They Are ALL Originally Has HeadQuarter in Europe.
post #64 of 96
Quote:
Originally Posted by Hydrogen View Post
 

 

 

What about something which would enable you to monitor the most precious thing you possess : your health ?

 

Not a chance: it will cost less than a smartphone (remember the unsubsidized true price) and not everyone will want it enough to buy it. It's GOOD for them, and they should want it. I would want it! Many people will... but everyone wants to communicate and do all the other things an iPhone puts in your pocket. (Camera, phone, email, web, social media, games, navigation, weather, creativity, a zillion special-purpose apps... a computer in your pocket!)

 

A health monitor (or something that does that along with other things) could be a great success--and I think Apple will indeed do that. it just won't be an iPhone sized success: product price multiplied by number of people who will actually buy it.

 

I also think people actually have a certain amount of aversion to health info. It's human nature for at least two reasons: a) people are afraid of bad news, and b) people don't want to be told to give up their vices (eat better, exercise more). The same reasons some people procrastinate about going to the doctor, or find it hard to resist dessert.

post #65 of 96
Quote:
Originally Posted by sog35 View Post
 

Comparing Apples stock price from 2011 to present to Microsoft's stock price during the 1999/2000 tech bubble?

 

how ridiculous can you get.

 

The ridiculous part is P/E based, those are 2 completly different stories.  The 2000 tech bubble was... a bubble with very high P/E stocks. Apple P/E at the 700 peak was like 17?  Not even close of being a bubble.

 

Tesla, amazon, twitter, facebook, ... those are stocks in bubble mode.

post #66 of 96
Quote:
Originally Posted by herbapou View Post
 

 

True.  and imo Apple will be able to pull off some growth, even if its only 10% per year.

Agreed.  I'm a happy long.

 

Thompson

post #67 of 96
Working at Barclay's must be great. They can say whatever they want and bear absolutely no responsibility. Name one other company that doesnt have to answer for lousy products in one form or another. Maybe if I get my PhD I'll apply for a job there.
post #68 of 96

Seriously ! - does anyone actually know what value Barclays produces other than to rip people off from their hard earned cash ? - I wouldn't be surprised that they are forcing down the share price so they can reap a huge profit at a later date. I would take them about as seriously as a drunk sailor. All vinegar and wind.

post #69 of 96
Quote:
Originally Posted by Constable Odo View Post
 

Investors have been stepping aside from Apple since the infamous share price fiasco in 2012 when Apple handed over the smartphone market to Samsung.  There's probably no recovery from that.  It definitely left Wall Street and Apple shareholders with a bitter taste in their mouths.  Most successful companies with wads of cash don't give their market share position away that easily.  Even after this recent buyback Apple shares are still stuttering and misfiring like some ancient engine with bad plugs and fouled carbs.  Everything Apple does is like pouring sugar into a gas tank and the share price tanks.  Meanwhile, Google is running like a world-class F1 racer leaving Apple sucking fumes.

 

Apple really should have gone after Tesla to show that it means business.  Every time Apple's share price moves up a bit, an analyst or two will jump in and say Apple has gone up TOO much and downgrade the stock.  Apple's iPhone and tablet business has been completely overwhelmed by half-priced Android devices.  Most consumers simply can't resist really cheap devices because they think they're getting a bargain.  I'm not sure whether Apple deserves a downgrade or not but I always expect it to happen.  The stock has no momentum whatsoever.  It will move up and bit and then boom, analyst downgrade and share collapse.  It's really a pain to be an Apple shareholder nowadays while the rest of the market is on a roll.  At least I can count on the dividends to see me through.  Apple refuses to play Wall Street's game and would rather sit on a mountain of cash than excite Wall Street investors.  That's the breaks.  Apple can't seem to increase institutional ownership which pretty much shows Apple has stagnated.

Odoo-doo, have you stopped to consider that if Apple acquired Tesla, it would actually have to manage it? You talk a lot about Tesla, but I haven't seen you present a rational business case as to how that would turn out successfully. Let's put that bright idea of yours back in the oven to bake a while longer.

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post #70 of 96
Interesting comment on the part of Barclays Analist - one thing about it, they will reverse their opinion as soon as they anticipate being wrong or need to make a revision and no one will remember that what they said or hold them accountable. Now what was it Barclays was wrong about in the past and was there something they were accused of manipulating ? Let me think . . . After Barclays' comment, we may may not see any new significant products in 2014 from Apple. We all know they are incorrect, but just waiting to make a revised revision.
post #71 of 96

Now, as to all these enraged howls that Apple isn't somehow still the sine qua non among investment strategies, go take cold showers. Apple continues to be a great company, but it is no longer upsetting as many "apple carts" (pardon the pun) and disrupting as many businesses and categories as it did in the last decade. Over the next few years, a transition may well take place from an insanely explosive growth company and stock to a steady, income-generating business.

 

Hey, I made a lot of money from owning AAPL between late 2008 and mid-2012. And I would have made more if I'd bought in earlier, but nothing's perfect. But let's face it. If you bought in 2012 (as that investing genius Odoo-doo appears to have done), you were late to the party and your holding got trashed. Buy AAPL now and you're unlikely to enjoy the same rate of ROI. That's not necessarily bad. Volatility at this point is down. If you buy AAPL, you're unlikely to reap the same gains as that overheated period that ended 2011, but the risk is less and you'll not so likely end up sitting around, licking your wounds and endlessly complaining (does that resemble anybody, Odoo-doo?).

 

Let's read Barclay's latest with a little more insight. I take it to mean that if you're now looking for more aggressive stock gains in the tech sector, they're suggesting that you might want to scan the horizon for different opportunities - enterprises that resemble where Apple was 10 years ago - embarking on the rapid growth phase of the business cycle.

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post #72 of 96
Quote:
Originally Posted by PhilBoogie View Post

With Facebook having some 1.2B users, wouldn't that market me saturated as well? Why hasn't their stock been down rated¿

They are growing revenue. Which is what these companies do. Get customers. Monetise later.
Quote:
Originally Posted by focher View Post

You're on the wrong forum if you own APPL stock. The fundamental issue is that AAPL's valuation is already artificially low. When you remove cash, it's P/E is less than 8. For sure, a company's actual value versus the stockmarket's valuation is not going to match up because most stock traders are nothing more than gamblers. Over the next 10 years, AAPL will continue to increase in actual value. Whether the stock price reflects that is, as always, a guess.

The stock market isn't fond of cash, isn't that after all why people urge a buy back? To get higher EPS? well the EPS would be higher but the cash per share should balance it out.

So why was DED eulogising about stock buy backs at the weekend? Because the stock market doesn't rate cash, the p/e is too low.
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post #73 of 96
Quote:
Originally Posted by nagromme View Post

I can't speak to the "current range" or specific time frames, and I'm sure Apple will be a success for a very long time to come--both in terms of income and user satisfaction (the latter meaning the most to me). They'll also have some big product hits and some "flops" (just like under Jobs--although an Apple hardware "flop" is a success most companies would kill to have).

BUT... I'm certain that Apple's iPhone-spurred profit growth will never be repeated. Smartphones, as re-invented by Apple, are in a unique position to be a fairly pricey product that almost everyone on Earth could potentially use. (Cars could be similar, except limited to a smaller number of buyers and kept running much longer. And lots of cheap products like toothbrushes count... but have little profit.)

I don't think anyone--not Apple, not anyone--will ever invent a product that is as WIDELY desired as a smartphone, AND costs as much. A watch? A TV? Health tracker? In-car systems? Smaller markets, smaller price tags. They could be successes, but none like the iPhone. Tablets? Yes, as they replace computers for most people (gradually) that's pretty big--but still not as big as smartphones. More people will have their own personal phone than their own personal tablet. Apple can hold onto the huge market they created (high-end modern smartphones), and that's terrific, but that market can't grow forever and no other product can have the same kind of market. I just don't see it (and that's fine by me).

So the stock SHOULD reflect that Apple's done something that can't be repeated. Which is why I don't consider stock price a measure of success as much as it is a measure of the market's craziness (and the influence of PR/press/manipulation). But even a purely sane, fair stock price wouldn't rise forever.

What price would reflect that reality? I don't know--probably higher than it is! I think people have underestimated Apple for a long time (or pretended to). But whatever the fair price may be, it can't rise forever at the same rate the iPhone caused. (And for the record, I don't think the iPhone growth is anywhere near over yet--even if Apple stays away from the profit-free bottom end. And the iPad growth is just beginning.)

Before the iPhone came out, no one saw a use for smartphones. I had the Palm Treo but I only used it for texts and calls. Maybe the internet once but that was a hassle. Before the iPad came out , most people declared it a horrible idea cause why the hell would anyone need a big ass iPhone?? So any product they haven't attempted yet and you already decided would not be a difference maker for them is a story that's been told before.
Edited by justp1ayin - 2/20/14 at 2:39pm
post #74 of 96
Quote:
Originally Posted by justp1ayin View Post

Before the iPhone came out, no one saw a use for smartphones. I had the Palm Treo but I only used it for texts and calls. Maybe the internet once but that was a hassle. Before the iPad came out , most people declared it a horrible idea cause why the hell would anyone need a big ass iPhone?? So any product they haven't attempted yet and you already decided would not be a difference maker for them is a sorry that's been told before.

Let's see what happens on Cooks reign. I have the sinking feeling that they've moved into health because the CEO is a health nut, and out of TV because he doesn't watch TV. Jobs liked music - and so we got the iPod. The number of people interested in music is universal, in health gadgets not so much.
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post #75 of 96
Future historians would say the game was lost - or not won - in the failure to actually price a plastic phone competively. And the lack of the big screen. And one product refresh a year. Apple became the biggest company in the world but didn't act like it.

Anyway they're hardly doomed. But neither is the future rosy.
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post #76 of 96
Quote:
Originally Posted by asdasd View Post

Let's see what happens on Cooks reign. I have the sinking feeling that they've moved into health because the CEO is a health nut, and out of TV because he doesn't watch TV. Jobs liked music - and so we got the iPod. The number of people interested in music is universal, in health gadgets not so much.

That's true, but before the iPod, how many songs did you own on your computer. I fought off an iPod for years because it was stupid to me. I had my cd book with all the booklets, it was great. Sure music is universal, but downloading songs...? Not so much, it was for a few computer guys or those of us who bootlegged.... There no such thing as a 100% market reach, and if you invent something people already knew they wanted, they probably already got it and you lost that game.
post #77 of 96
Quote:
Originally Posted by JayTee View Post
 

You forgot the valuation part, FB is valued at 53 times earnings in 2014 vs AAPL's 13 (before discounting for cash). Yes, FB grew faster than AAPL last year (who knows for how long), but their valuation assumes that they will grow something like 4 times faster than AAPL for the next couple of years. They might just do that, but assuming zero growth for AAPL is perhaps too conservative.

 

Didn't really forget it.  The future outlook is a huge part (maybe even the biggest part) of a stocks valuation.  That's why analysts tend to be out to lunch quite frequently (when looked at in hindsight).  Their job is literally to predict the future.  FB does have a high P/E.  If their profits or even their revenue flatten out, their stock is going to tank and fast.  Their growth is already tapering, but that is projected in their valuation- the main 'surprise' that boosted their shares was how well they were able to capitalize on and profitize their advertising.  Even with slowing userbase growth they were able to make even more money than expected.

 

You are right, assuming zero growth for AAPL may be too conservative.  Consider also that it might be far too generous.  Apple would have loved zero profit growth in 2013.  They made 5,000,000,000 (about double facebooks profits) LESS than the year prior.  That 5,000,000,000 less was despite having record device sales AND record revenues.  They did spend about 1,000,000,000 more in R&D so you could shave that down to $4,000,000,000 but it just highlights the newer challenges the now supersized Apple faces relative to when it was smaller.

 

They own 80% of the profits in a market that isn't growing much.  That is a tremendous thing for income, but not so great a thing for growth.  Even if they are very aggressive and release that big size phone and people flock to it, are they really going to capture 90%?  Probably not.  Even if they did despite it being a huge dollar value, it is still percentage wise a modest gain for Apple.

 

Now instead of assuming the upside for Apple, assume the downside.  Subsidies make sense in a growth market to attract consumers.  In a flat market with everyone giving subsidies there is no competitive advantage in doing so.  Carriers are simply just handing money to phone makers and not getting the same return.  T-Mobile is already able to offer better plans than the competition because they aren't paying the 'subsidy tax'  The competition is poising themselves to follow suit- they have to prevent continuing losses to their lower priced competitior.  What happens when an iPhone and an Android phone are no longer 'about 100-300 dollars' each,  but instead consumers are faced with buying a Nexus phone for $350 or an iPhone for $700.    Apple's margins are going to collapse fast or they aren't going to be selling record numbers of phones in the blink of an eye.  With 75% of their profits reliant on that subsidy model Apple would need one hell of a home run just to make up for their decline in revenues from their phone stream.

 

Either way, you have to predict what *you* think the future holds for any company and invest accordingly.

 

Also either way, I think its almost better for Apple fans to detach themselves from the stock and stock price.  No matter what their stock price does, Apple simply makes and builds great products.  I think in either of the two scenarios above it is a given that Apple would continue to build the same great products they have always built, whether their stock is trading at $400 or $1000.

post #78 of 96
Why 75%. There aren't subsidies in Europe ( not in the same way anyway).
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post #79 of 96
Quote:
Originally Posted by PhilBoogie View Post


You should ask a mod to make this a sticky to every thread on the topic of (Apple) stock; I think you're very spot on.

 

Won't help.

 

Just read the replies after that comment.

 

Proof enough.

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post #80 of 96
Quote:
Originally Posted by BigMac2 View Post

Yet another anal-y-sis 

I think there is something that report overlooked, the actual hardware account for a fraction of Apple revenu.  Apple is makings a lot more money selling digital media and apps than selling iOS or Mac hardware. 

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