Originally Posted by jungmark
Wall Street isn't rational.
Apple has to make some strides in pumping out more products and increasing their Gross Sales with the same profit margins they been experiencing. The problem Apple has had is they didn't pump out large screen iPhones sooner and ramped up production, they were late in getting the MacPro out, and they haven't released their much anticipated wearables and SmartTV.
Part of the problem is more based on getting production levels up to speed, and pumping out new products to meet the demands of other markets they haven't gone after.
Many analysts THOUGHT Apple was going to come out with their own Smart TVs, which hasn't happened. If they did and Apple saw success in that market, Apple Gross Sales, Profits and stock price would have gone through the roof. If Apple came out with a AppleTV box that allowed cable provider access and would be a viable alternative to a cable box, they would probably increase sales enough to push the stock price up.
Wall Street looks at spreadsheets and they look at the growth rate of Gross Sales and Profits and then they look at HOW they are going to increase it at the same rate as before. When a company doesn't increase Gross Sales and Profits at the same rate, then the stock price won't increase. Apple needs to go after new markets to achieve this. these are just some of the markets Apple COULD go after and some they are and will see some benefits.
1. SmartTVs. It's a tough play, but if they did it right, they could definitely get a decent part of the market that would equal increased sales and profits, but since that market is a tough business, they are afraid to enter it. People don't replace TVs every 2 to 5 years like they do with iDevices, laptops and desktops.
2. Systems in cars. They are doing that now, but we don't know what the amount of revenue/profits from that market segment, but once it gets monetized where Wall Street can add that revenue/profits to their spreadsheets, then the stock might reflect that.
3. Larger screen iPhones.
5. A more enhanced AppleTV box that might allow things like recording shows like Tivo, playing high quality games, more channels, faster access to more content, etc.
6. 24 bit tunes on iTunes as well as adding 24 Bit DACs to their entire product line. It's a growing market, believe it or not, and if done properly, Apple could kick start some more life into increased sales of iPods, iTunes content, etc.
7. Obviously refreshing aging products. The MacMini needs to get refreshed (even though it's a small portion of revenue/profits), maybe a new beardless midrange computer that lies in between the MacMini and the MacPro. I think there is untapped revenue as the iMac is the only thing they offer and I think they need to have a headless unit that might increase desktop sales.
8. Does Apple need a larger iPad? I'm sure there is a market for that.
9. I think Wall Street is waiting for that next iPod, iPhone, IPad device category that will jump start another new revenue stream. What that is, if it even exists remains to be seen. Wearables is an interesting category, but it remains to be seen how much that category will actually bring in.
10. It's too bad Apple wasn't successful in the server market. I think Apple is going to have to buy into that market if and when they want that business. Unforauntley, it would take a LOT of money, they would have to buy the right company and that takes an obscene amount of money to make a dent and Cook doesn't have the experience to do that. I think Apple stock price would benefit greatly if they were able to go after the server market in a serious way where they could garner a solid 10 to 25% of that market in hardware, but it's a crowded space right now. They would have to merge with Oracle would be probably the best play, but I don't know if the SEC will allow that or if they could even figure out how to do it since Apple doesn't have $200 Billion in cash to blow on buying Oracle. It would have to be a mutual merger and they would have to get REAL creative to pull that one off.