I'm sure analysts will be clamoring for Apple to pump out that cheap iPhone now to move more volume wise than focusing on the fact they still made more money...
Apple can't charge $600 for an iPhone in China and take any appreciable amount of the market.
Ironic? that China is the key market for resellers going grey and selling the phones for 2-3 times that while they wait for their government to approve the iPhone for sale each year.
We'll see how this new finance thing goes in terms of increasing share in the area
Apple can't charge $600 for an iPhone in China and take any appreciable amount of the market.
Ironic? that China is the key market for resellers going grey and selling the phones for 2-3 times that while they wait for their government to approve the iPhone for sale each year.
We'll see how this new finance thing goes in terms of increasing share in the area
Apple can't charge $600 for an iPhone in China and take any appreciable amount of the market.
Ironic? that China is the key market for resellers going grey and selling the phones for 2-3 times that while they wait for their government to approve the iPhone for sale each year.
We'll see how this new finance thing goes in terms of increasing share in the area
Apple is the best software company in the world, and packaging it in gorgeous hardware that they can't make fast enough. At this stage, investors are obviously, mindlessly rewarding market share.
Good point.
Everyone says Apple needs more market share because they are getting creamed across the globe by Android.
No one can argue that Android has a ton of market share... it absolutely does.
But no one wants to comment on all those $100 phones sold in developing nations that are stuck on Gingerbread. Maybe market share isn't all it's cracked up to be.
"If the stock keeps going down they could buy themselves with the cash they have. Get the stock down to $200 and it could be done."
Since companies are owned by people, who would own Apple if they took it private? Who is "they"? So Tim Cook, Jony Ive, etal, are going to take that $140 Billion in cash, that's not theirs by the way, but rather belongs to the shareholders, and buy the company?
So is that why they sold more iPhones than ever before this past quarter? Is that why they just had one of their best quarters ever? Is that why they are sitting on $136 Billion on cash?
Do you even realize how abjectly stupid your post is?
Except that from an investor stand point, he may be right.
Apple's a growth stock. A lot of their valuation is based on the expectation of Apple coming out with something game changing periodically that will blow up earnings with revenue from a new market.
And Apple's now running out of new markets to exploit. The next big one will be TV. But that's a tough nut to crack. Even for Apple.
And worse, their competition isn't a company that cares about hardware margins that Apple is so reliant on. Samsung may not be, but Google is incentivized to sell their wares as cheaply as possible and to commoditize the very market that Apple is so reliant on for their stratospheric profits. Look at the $300 Nexus 4. Look at the end of subsidies at T-Mobile USA. These are all real threats to Apple in the long run. The latter particularly so. Phone subsidies are virtually a direct transfer of profits from the telcos to Apple. Telcos and their shareholders resent being held hostage and forced to pay Apple exorbitant subsidies when there are similar hardware devices for less than the cost of the subsidy. There's a real risk that more telcos will follow T-Mobile's lead. What would be your projection for the stock price if more telcos balked at subsidies or decided they would sharply limit them (say $300 for 2 years...making Nexus 4 free and making the iPhone 5 $350 for 2 years)?
Maybe, but Amazon is in fundamentally a low margin business. When you're reselling a product that someone else makes, you will never get huge margins. If you try, someone else will sell it for less.
Apple's NET profit was around 25% of sales. That's after subtracting all your direct costs and overheads AND reinvesting in new business. Amazon's net is 0.3% of sales. Even if they increase their sales 10 fold, they're still only going to be generating a tiny fraction of the profits that Apple generates - and when you consider the opportunity cost, it's a huge loser (you can put the money in the bank and earn more than that).
By ANY reasonable standard, AMZN's P/E is ridiculously high and AAPL's is ridiculously low.
What would Apple's stock price be if they had a single disastrous iPhone launch (think "you're holding it wrong"...but that turns out to be a real flaw")? That risk is exactly why AAPL's PE is "ridiculously low".
Amazon is no where as dependent on any single market as Apple is on the iPhone. So naturally, if iPhone sales miss, the stock will tank. AAPL is really an iPhone growth story.
After hours trading is very light. I think we'll see the stock come back most if not all of that 10%. I think Wall Street knew revenue would be light, which is why the stock has been pummeled for the last few months.
I think what is really going on here is people that bought the iphone 4S can't upgrade for free until 18 months or more. The device isn't enough better to justify paying full price. I think Apple will continue to sell throughout the year as people's contracts are renewed. I don't think people are leaving Apple for other devices.
The mac and ipad lineups will take off again when Apple switches to IGZO displays and produces higher resolution with better power usage and thinner devices.
This train has plenty of steam to keep going. Wait for 9 more months.
You're making a few obvious mistakes here though like:
- You think that "Wall Street" knows anything
- You seem to believe the stock market is somehow a rational thing.
- You (crazily) seem to believe that "missing consensus estimates" equates to poor sales.
- You mysteriously think that sales one of the fastest selling and most popular products in the world today (the iPad and iPad mini) have slowed (they haven't).
In fact almost all the assumptions that underline your post are completely without support. In your defence, yours is the majority position and many people think the same, but that doesn't make them right or change the facts.
As much as I hate 9to5Mac, I think all you really need to know to really understand what's going on here is the headline from one of their latest stories
Even when he was alive, it wasn't like Apple was releasing groundbreaking, disruptive products every year. There were many years in between those disruptive products, like from the iPod, to the iPhone.
Apple has released more disruptive products than any other tech company, yet some fools who don't know much about anything expect Apple to re-invent the wheel every 12 months.
The issue at hand isn't that Apple constantly released groundbreaking products before and now does not. It's that Steve Jobs was seen as the reason that Apple could release such products, and it hasn't been proven since his death that they still can.
I don't blame the stock for falling. After Steve Jobs, Tim Cook needs to prove Apple isn't turning into another Sony. And the veil of secrecy Apple keeps doest not provide any comfort to investors in addition to the gigantic mistakes that have been made - Maps, a corporate reshuffling of executives and production problems - you can't buy an iMac without waiting 4 weeks and I had to wait 6 weeks for my iPhone 5.
There's no way I would invest in Apple right now.
The maps was such a "disaster" that people use the new maps more than they used the old maps before, in addition they forced Google to make features available for the iPhone that Google wanted to keep an Android exclusive, i.e. turn-by-turn directions and vector maps. iPhone users, and thus Apple won all the way.
The corporate reshuffling wasn't a mistake, it got some obstructionists out of the way who tried to elbow their way into Cook's chair and are responsible for some of the nasty directions Apple software and GUI has developed in recent years (i.e. dumbing down beyond the point of useful simplicity).
The iMac problem, well, not ideal, but not the first time, and it's nothing that stops sales, just delays them. If Apple doesn't use cutting edge stuff, they stop being Apple, and using cutting edge stuff means that occasionally there are lower than expected production yields and snafus as production is ramped up. It's an intrinsic part of Apple being Apple.
People should not invest in a company they don't understand. Too many investors jumped onto Apple the way they jumped onto Madoff funds: expecting an ever growing miracle. Apple is a real company operating in the real world, where shit happens. However, Apple is extremely well managed, and so even things that would be major problems in other companies Apple puts away without a decline in profits and significantly growing overall revenue.
I hope we're finally done shaking the unrealistic investors (and I hope that somehow some of the institutional options traders who have distorted the stock price lately were at least for one day on the wrong side of the trade and lost their shirts, too), such that we can back to sensible investing.
In an Apple style world, Apple no longer has a unique product to sell. That is the problem.
They would except for the failure of the law to back them up on the patent stuff.
The only other player making any inroads at all is Samsung which rode to fame on Apple's back due to Google's evil plan to steal iOS and the reluctance of the courts to support long established law.
In any case, people forget that Apple doesn't *want* the whole market. Here I'll say it again ... APPLE DOESN'T WANT THE WHOLE MARKET.
The bottom end of the market is anyone's to take and lets face it, what better to fill that space than a ripped off clone of iOS (Android).
What the failure of a much better (better than Android that is) mobile OS (WebOS), and the complete failure of a reasonably stupid but at least *original* mobile OS (WindPhone 8 Metrospecial Extreme), proves is that people don't want two completely different mobile OS's. What they really seem to want is iOS ... and a cheap copy of it. It really makes a lot of sense when you think about it.
What would have happened if Microsoft Windows hadn't captured the whole desktop pie? Would we really be using three or four or five completely different desktop operating systems that all operated different ways? Really? Would it really have made sense to have a certain part of the market on Windows, some on Mac, some on OS/2, some on Solaris, some on Atari, some on Amiga?
Isn't it true that Mac OS didn't really "take off," and that OS-X only became super popular at the exact moment that it started to operate so much like Windows that a user could easily transpose their skills to the new platform?
It would be quite easy to construct an argument that the only possible alternative to iOS devices are things that act very very much like iOS devices. Different isn't selling right now.
So is that why they sold more iPhones than ever before this past quarter? Is that why they just had one of their best quarters ever? Is that why they are sitting on $136 Billion on cash?
Do you even realize how abjectly stupid your post is?
Except that from an investor stand point, he may be right.
Apple's a growth stock. A lot of their valuation is based on the expectation of Apple coming out with something game changing periodically that will blow up earnings with revenue from a new market.
And Apple's now running out of new markets to exploit. The next big one will be TV. But that's a tough nut to crack. Even for Apple.
And worse, their competition isn't a company that cares about hardware margins that Apple is so reliant on. Samsung may not be, but Google is incentivized to sell their wares as cheaply as possible and to commoditize the very market that Apple is so reliant on for their stratospheric profits. Look at the $300 Nexus 4. Look at the end of subsidies at T-Mobile USA. These are all real threats to Apple in the long run. The latter particularly so. Phone subsidies are virtually a direct transfer of profits from the telcos to Apple. Telcos and their shareholders resent being held hostage and forced to pay Apple exorbitant subsidies when there are similar hardware devices for less than the cost of the subsidy. There's a real risk that more telcos will follow T-Mobile's lead. What would be your projection for the stock price if more telcos balked at subsidies or decided they would sharply limit them (say $300 for 2 years...making Nexus 4 free and making the iPhone 5 $350 for 2 years)?
Look at it from a different point of view: the pile of cash Apple is sitting on is more than $100/stock. So the valuation of the company (minus cash), is only $350 (given the after hours trading range). Apple also pays more dividend than a government bond pays in interest.
So consider Apple for a moment like a utlity stock: people will keep buying smart phones, computers, tablets, etc. People are lazy switching platforms once they are in a particular eco system. If Apple just is good enough at keeping up with everyone else, without being the leaps and bounds leader, then they can make enough revenue and profits to justify the stock price with ZERO GROWTH.
But even that would be hard to do, because there are significant markets Apple has barely started to tap into, so even without groundbreaking new products, Apple has years of growth ahead.
Apple is certainly not asleep at the wheel; they innovate on many levels, down to things like alternative energy sources, so they have IP they can license for revenue streams investors don't even think about. And that's without going into potential future markets such as embedded systems (home/car), TV, photo/video, etc.
Plus they still have a huge pile of cash with which to buy into growth opportunities in case they totally forgot how to innovate.
And investors forget, that while Jobs was involved with a lot of things and had his names on a few patents in the sense that he was involved in details of design and such, it's not Jobs' engineering skills, etc. that produced these products. The innovation at Apple comes from the many smart people who work for the company, Jobs was mainly a great figurehead, leader, marketing guy; a person around which the media could focus the cult of Apple; but nowhere near as important as people make him out to be, aside from breaking out from certain common "wisdoms" such as e.g. false cost cutting, etc.
But these important deviations have long become part of the Apple corporate fabric, they don't rely on Jobs being there to remain there for a long time to come.
Comments
And the iPhone Max, Apple TV etc
Laurel Powell Jobs?
Is she getting gender reassignment?
Ironic? that China is the key market for resellers going grey and selling the phones for 2-3 times that while they wait for their government to approve the iPhone for sale each year.
We'll see how this new finance thing goes in terms of increasing share in the area
Ironic? that China is the key market for resellers going grey and selling the phones for 2-3 times that while they wait for their government to approve the iPhone for sale each year.
We'll see how this new finance thing goes in terms of increasing share in the area
Ironic? that China is the key market for resellers going grey and selling the phones for 2-3 times that while they wait for their government to approve the iPhone for sale each year.
We'll see how this new finance thing goes in terms of increasing share in the area
Good point.
Everyone says Apple needs more market share because they are getting creamed across the globe by Android.
No one can argue that Android has a ton of market share... it absolutely does.
But no one wants to comment on all those $100 phones sold in developing nations that are stuck on Gingerbread. Maybe market share isn't all it's cracked up to be.
Since companies are owned by people, who would own Apple if they took it private? Who is "they"? So Tim Cook, Jony Ive, etal, are going to take that $140 Billion in cash, that's not theirs by the way, but rather belongs to the shareholders, and buy the company?
Apple stock at $200? Who ARE you?
Quote:
Originally Posted by lkrupp
So is that why they sold more iPhones than ever before this past quarter? Is that why they just had one of their best quarters ever? Is that why they are sitting on $136 Billion on cash?
Do you even realize how abjectly stupid your post is?
Except that from an investor stand point, he may be right.
Apple's a growth stock. A lot of their valuation is based on the expectation of Apple coming out with something game changing periodically that will blow up earnings with revenue from a new market.
And Apple's now running out of new markets to exploit. The next big one will be TV. But that's a tough nut to crack. Even for Apple.
And worse, their competition isn't a company that cares about hardware margins that Apple is so reliant on. Samsung may not be, but Google is incentivized to sell their wares as cheaply as possible and to commoditize the very market that Apple is so reliant on for their stratospheric profits. Look at the $300 Nexus 4. Look at the end of subsidies at T-Mobile USA. These are all real threats to Apple in the long run. The latter particularly so. Phone subsidies are virtually a direct transfer of profits from the telcos to Apple. Telcos and their shareholders resent being held hostage and forced to pay Apple exorbitant subsidies when there are similar hardware devices for less than the cost of the subsidy. There's a real risk that more telcos will follow T-Mobile's lead. What would be your projection for the stock price if more telcos balked at subsidies or decided they would sharply limit them (say $300 for 2 years...making Nexus 4 free and making the iPhone 5 $350 for 2 years)?
Quote:
Originally Posted by jragosta
Maybe, but Amazon is in fundamentally a low margin business. When you're reselling a product that someone else makes, you will never get huge margins. If you try, someone else will sell it for less.
Apple's NET profit was around 25% of sales. That's after subtracting all your direct costs and overheads AND reinvesting in new business. Amazon's net is 0.3% of sales. Even if they increase their sales 10 fold, they're still only going to be generating a tiny fraction of the profits that Apple generates - and when you consider the opportunity cost, it's a huge loser (you can put the money in the bank and earn more than that).
By ANY reasonable standard, AMZN's P/E is ridiculously high and AAPL's is ridiculously low.
What would Apple's stock price be if they had a single disastrous iPhone launch (think "you're holding it wrong"...but that turns out to be a real flaw")? That risk is exactly why AAPL's PE is "ridiculously low".
Amazon is no where as dependent on any single market as Apple is on the iPhone. So naturally, if iPhone sales miss, the stock will tank. AAPL is really an iPhone growth story.
Quote:
Originally Posted by ash471
After hours trading is very light. I think we'll see the stock come back most if not all of that 10%. I think Wall Street knew revenue would be light, which is why the stock has been pummeled for the last few months.
I think what is really going on here is people that bought the iphone 4S can't upgrade for free until 18 months or more. The device isn't enough better to justify paying full price. I think Apple will continue to sell throughout the year as people's contracts are renewed. I don't think people are leaving Apple for other devices.
The mac and ipad lineups will take off again when Apple switches to IGZO displays and produces higher resolution with better power usage and thinner devices.
This train has plenty of steam to keep going. Wait for 9 more months.
You're making a few obvious mistakes here though like:
- You think that "Wall Street" knows anything
- You seem to believe the stock market is somehow a rational thing.
- You (crazily) seem to believe that "missing consensus estimates" equates to poor sales.
- You mysteriously think that sales one of the fastest selling and most popular products in the world today (the iPad and iPad mini) have slowed (they haven't).
In fact almost all the assumptions that underline your post are completely without support. In your defence, yours is the majority position and many people think the same, but that doesn't make them right or change the facts.
As much as I hate 9to5Mac, I think all you really need to know to really understand what's going on here is the headline from one of their latest stories
"Apple reports the largest corporate earnings in the history of the earth, stock down 10%"
Yeah, those Wall street guys really know what's going on. You should keep listening to them.
Quote:
Originally Posted by Apple ][
Steve Jobs died a little more than a year ago.
Even when he was alive, it wasn't like Apple was releasing groundbreaking, disruptive products every year. There were many years in between those disruptive products, like from the iPod, to the iPhone.
Apple has released more disruptive products than any other tech company, yet some fools who don't know much about anything expect Apple to re-invent the wheel every 12 months.
The issue at hand isn't that Apple constantly released groundbreaking products before and now does not. It's that Steve Jobs was seen as the reason that Apple could release such products, and it hasn't been proven since his death that they still can.
Quote:
Originally Posted by SolipsismX
Is she getting gender reassignment?
eh?
Laurel is a girls name (despite the error).
Quote:
Originally Posted by bdkennedy1
I don't blame the stock for falling. After Steve Jobs, Tim Cook needs to prove Apple isn't turning into another Sony. And the veil of secrecy Apple keeps doest not provide any comfort to investors in addition to the gigantic mistakes that have been made - Maps, a corporate reshuffling of executives and production problems - you can't buy an iMac without waiting 4 weeks and I had to wait 6 weeks for my iPhone 5.
There's no way I would invest in Apple right now.
The maps was such a "disaster" that people use the new maps more than they used the old maps before, in addition they forced Google to make features available for the iPhone that Google wanted to keep an Android exclusive, i.e. turn-by-turn directions and vector maps. iPhone users, and thus Apple won all the way.
The corporate reshuffling wasn't a mistake, it got some obstructionists out of the way who tried to elbow their way into Cook's chair and are responsible for some of the nasty directions Apple software and GUI has developed in recent years (i.e. dumbing down beyond the point of useful simplicity).
The iMac problem, well, not ideal, but not the first time, and it's nothing that stops sales, just delays them. If Apple doesn't use cutting edge stuff, they stop being Apple, and using cutting edge stuff means that occasionally there are lower than expected production yields and snafus as production is ramped up. It's an intrinsic part of Apple being Apple.
People should not invest in a company they don't understand. Too many investors jumped onto Apple the way they jumped onto Madoff funds: expecting an ever growing miracle. Apple is a real company operating in the real world, where shit happens. However, Apple is extremely well managed, and so even things that would be major problems in other companies Apple puts away without a decline in profits and significantly growing overall revenue.
I hope we're finally done shaking the unrealistic investors (and I hope that somehow some of the institutional options traders who have distorted the stock price lately were at least for one day on the wrong side of the trade and lost their shirts, too), such that we can back to sensible investing.
Originally Posted by Gazoobee
Laurel is a girls name (despite the error).
He might be thinking of Laurel and Hardy. It's a last name, but a man held it.
Quote:
Originally Posted by ash471
Apple can't charge $600 for an iPhone in China and take any appreciable amount of the market.
I'd like to test your theory with a larger than 4" premium iPhone sold in China with Apple's normal margins attached.
My guess... you'd get a helluva surprise.
[and/or as Dick says, put phone capabilities into the iPad Mini]
No. Seriously. It's like they just copied and pasted articles from 1996, changing product names and dates…
http://www.valuewalk.com/2013/01/apple-inc-aapl-first-to-the-tech-grave-yard/
http://www.insidermonkey.com/blog/could-this-be-the-demise-of-apple-inc-aapls-earnings-41284/
These people need fired for gross stupidity.
Quote:
Originally Posted by bwik
In an Apple style world, Apple no longer has a unique product to sell. That is the problem.
They would except for the failure of the law to back them up on the patent stuff.
The only other player making any inroads at all is Samsung which rode to fame on Apple's back due to Google's evil plan to steal iOS and the reluctance of the courts to support long established law.
In any case, people forget that Apple doesn't *want* the whole market. Here I'll say it again ... APPLE DOESN'T WANT THE WHOLE MARKET.
The bottom end of the market is anyone's to take and lets face it, what better to fill that space than a ripped off clone of iOS (Android).
What the failure of a much better (better than Android that is) mobile OS (WebOS), and the complete failure of a reasonably stupid but at least *original* mobile OS (WindPhone 8 Metrospecial Extreme), proves is that people don't want two completely different mobile OS's. What they really seem to want is iOS ... and a cheap copy of it. It really makes a lot of sense when you think about it.
What would have happened if Microsoft Windows hadn't captured the whole desktop pie? Would we really be using three or four or five completely different desktop operating systems that all operated different ways? Really? Would it really have made sense to have a certain part of the market on Windows, some on Mac, some on OS/2, some on Solaris, some on Atari, some on Amiga?
Isn't it true that Mac OS didn't really "take off," and that OS-X only became super popular at the exact moment that it started to operate so much like Windows that a user could easily transpose their skills to the new platform?
It would be quite easy to construct an argument that the only possible alternative to iOS devices are things that act very very much like iOS devices. Different isn't selling right now.
Quote:
Originally Posted by Jetz
Quote:
Originally Posted by lkrupp
So is that why they sold more iPhones than ever before this past quarter? Is that why they just had one of their best quarters ever? Is that why they are sitting on $136 Billion on cash?
Do you even realize how abjectly stupid your post is?
Except that from an investor stand point, he may be right.
Apple's a growth stock. A lot of their valuation is based on the expectation of Apple coming out with something game changing periodically that will blow up earnings with revenue from a new market.
And Apple's now running out of new markets to exploit. The next big one will be TV. But that's a tough nut to crack. Even for Apple.
And worse, their competition isn't a company that cares about hardware margins that Apple is so reliant on. Samsung may not be, but Google is incentivized to sell their wares as cheaply as possible and to commoditize the very market that Apple is so reliant on for their stratospheric profits. Look at the $300 Nexus 4. Look at the end of subsidies at T-Mobile USA. These are all real threats to Apple in the long run. The latter particularly so. Phone subsidies are virtually a direct transfer of profits from the telcos to Apple. Telcos and their shareholders resent being held hostage and forced to pay Apple exorbitant subsidies when there are similar hardware devices for less than the cost of the subsidy. There's a real risk that more telcos will follow T-Mobile's lead. What would be your projection for the stock price if more telcos balked at subsidies or decided they would sharply limit them (say $300 for 2 years...making Nexus 4 free and making the iPhone 5 $350 for 2 years)?
Look at it from a different point of view: the pile of cash Apple is sitting on is more than $100/stock. So the valuation of the company (minus cash), is only $350 (given the after hours trading range). Apple also pays more dividend than a government bond pays in interest.
So consider Apple for a moment like a utlity stock: people will keep buying smart phones, computers, tablets, etc. People are lazy switching platforms once they are in a particular eco system. If Apple just is good enough at keeping up with everyone else, without being the leaps and bounds leader, then they can make enough revenue and profits to justify the stock price with ZERO GROWTH.
But even that would be hard to do, because there are significant markets Apple has barely started to tap into, so even without groundbreaking new products, Apple has years of growth ahead.
Apple is certainly not asleep at the wheel; they innovate on many levels, down to things like alternative energy sources, so they have IP they can license for revenue streams investors don't even think about. And that's without going into potential future markets such as embedded systems (home/car), TV, photo/video, etc.
Plus they still have a huge pile of cash with which to buy into growth opportunities in case they totally forgot how to innovate.
And investors forget, that while Jobs was involved with a lot of things and had his names on a few patents in the sense that he was involved in details of design and such, it's not Jobs' engineering skills, etc. that produced these products. The innovation at Apple comes from the many smart people who work for the company, Jobs was mainly a great figurehead, leader, marketing guy; a person around which the media could focus the cult of Apple; but nowhere near as important as people make him out to be, aside from breaking out from certain common "wisdoms" such as e.g. false cost cutting, etc.
But these important deviations have long become part of the Apple corporate fabric, they don't rely on Jobs being there to remain there for a long time to come.
Quote:
Originally Posted by Tallest Skil
He might be thinking of Laurel and Hardy. It's a last name, but a man held it.
Right. I haven't ever met a Laurel (first name) that wasn't female but I hadn't thought of famous last names.