As Apple's growth slows, media questions if 'patience' & 'resolve' of Wall Street investors will las

Posted:
in AAPL Investors edited May 2014
Ahead of Apple's earnings call this afternoon, two major publications have openly questioned whether investors will continue to stand by one of the most profitable companies in the world, with the perception that Wall Street may be losing its patience with the iPhone maker in the face of slowing growth.


The New York Stock Exchange, credit Carlos Delgado via Wikipedia.


Slowing sales for both the iPhone and iPad are testing "investor resolve," Adam Satariano wrote in a piece for Bloomberg published Wednesday. A similar theme was echoed by Chris O'Brien of the Los Angeles Times, who authored a story that suggested Apple's March quarter could "test investors' patience."

Negative sentiment before Apple even announces the results of its its second fiscal quarter comes after the company's growth has shown signs of slowdown in the maturing smartphone and tablet markets. Apple sold a record 51 million iPhones last quarter, but that represented just a 6.7 percent year over year increase -- well off from years prior, when Apple was seeing sales double year over year in the midst of the smartphone boom.

Satariano wrote Wednesday that although Apple is an "immensely profitable" company, Chief Executive Tim Cook faces "pressure" from the investment community to "introduce a new hit product."
As Apple prepares to announce its March quarter results, investors are already fretting over what the company will or will not do in late 2014 and beyond.
And O'Brien questioned "how long investors will be content to ride out a quiet period" until the company's "mythical new products appear."

Regarding those "mythical" products, many on Wall Street expect Apple to introduce new iPhones with larger displays this year. But even that may not be enough to satiate the demands of investors and media, as Satariano stated in Wednesday's report that it's "unclear what happens for Apple after bigger-screen devices."

Some still feel like Cook needs to introduce his company's next blockbuster product category, outside of smartphones and tablets, to reignite growth. That's why a number of investors have pinned their hopes on a so-called "iWatch," a rumored wrist-worn smart device that many on Wall Street hope is in the works for a late 2014 launch. Still others hope Apple will unveil an enhanced Apple TV set-top box, or perhaps even a full-fledged television set.




As for Apple's actual financial performance for the March quarter, AppleInsider previewed investor expectations on Monday, noting that Wall Street generally expects the company to report that revenue was about flat with the same period from a year ago. Many analysts on Wall Street do still remain bullish on Apple, recommending that investors buy ahead of anticipated new products expected to launch in the second half of 2014.

One thing highly unlikely to be on tap for this afternoon's earnings report are any hints at new products. Apple's notoriously tight lipped executive team rarely offer any indication about where the company may be headed during quarterly earnings conference calls.

Instead, investors waiting for Apple's next big thing will likely have to wait until early June, when the company's annual Worldwide Developers Conference will kick off. It's expected that Apple will unveil both iOS 8 and OS X 10.10 at this year's conference.
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Comments

  • Reply 1 of 126
    nkhmnkhm Posts: 928member

    This does make me laugh.  Of course growth slows.  You reach a point where everyone has an iPod, then iMac, then iPad, and then apple TV and iWatch - if a company is still making huge profits, then what difference does it make if the rate of growth slows. Profit is profit. And once you're into the billions, the actual amount is irrelevant.

     

    Analysts and investors are pointless to this arena.  Apple need to de-list, become a private company again and do what they do best.  Make great products that people want and make a shed load of money doing so.

  • Reply 2 of 126
    rogifanrogifan Posts: 10,669member
    nkhm wrote: »
    This does make me laugh.  Of course growth slows.  You reach a point where everyone has an iPod, then iMac, then iPad, and then apple TV and iWatch - if a company is still making huge profits, then what difference does it make if the rate of growth slows. Profit is profit. And once you're into the billions, the actual amount is irrelevant.

    Analysts and investors are pointless to this arena.  Apple need to de-list, become a private company again and do what they do best.  Make great products that people want and make a shed load of money doing so.
    So basically you're saying its fine if Apple becomes what Microsoft was the last decade or so. Would that support the current stock price and valuation?
  • Reply 3 of 126
    saareksaarek Posts: 1,105member
    It's been a very boring start to the year for Apple fans. All going well Apple will have an exciting June - December
  • Reply 4 of 126
    512ke512ke Posts: 781member
    Dear Media, if you think Apple's growth has forever slowed and Apple's best days are behind it, I will happily buy any APPL shares you happen to own at current prices. Thank you.
  • Reply 5 of 126
    I feel the same way. Their last major product was the ipad. Everything else is just spec bumps. Don't get wrong, I love my apple stuff n I'm a very happy customer, I just wish they would get involved with other stuff n make them better.
  • Reply 6 of 126
    nkhmnkhm Posts: 928member
    Quote:
    Originally Posted by Rogifan View Post





    So basically you're saying its fine if Apple becomes what Microsoft was the last decade or so. Would that support the current stock price and valuation?

    I'm saying nothing of the sort.

     

    I'm saying that Apple Continue to innovate, and if you look at landmark products - iMac, iPod, iPhone, iPad we are far from 'overdue' the next big thing.  The next big thing will come, unfortunately analysts want a groundbreaking revolutionary product every six months.  That is a stupid expectation.

     

    My statement was that growth slows - it's inevitable.  That is neither a bad thing, nor an unusual thing.  Why read any more into the statement than my black and white text on the screen?

     

    Oh, and as regards "would that support the current stock price and valuation" - I don't care.  I don't think Apple really do either, as long as they're making profit and making great products and software. Stock price is completely irrelevant to that.

  • Reply 7 of 126
    "Patience and resolve"? Wall Street? Please.

    Investors invest in things they expect to work. Right now they are not sure what to expect, thus the turmoil. One thing that is for sure is that at Apple's size it takes a very big deal indeed to matter to the bottom line.
  • Reply 8 of 126
    tallest skiltallest skil Posts: 43,399member
    Originally Posted by AjbDtc826 View Post

    Their last major product was the ipad.

     

    Do you expect anyone to believe you when you say this? Anyone at all? A single user here?

     

    Don’t get wrong, I love my apple stuff n I’m a very happy customer…


     

  • Reply 9 of 126
    rogifan wrote: »
    So basically you're saying its fine if Apple becomes what Microsoft was the last decade or so. Would that support the current stock price and valuation?

    No-growth Microsoft has a PE ratio today of 14.68. Apple's is at 13.11 today. So, AAPL price is already presuming worse future results than Microsoft...
  • Reply 10 of 126

    "Become a private company again"? Their IPO was 34 years ago.

  • Reply 11 of 126
    macinthe408macinthe408 Posts: 1,050member

    The most rhetorical question in the world: 

     

    "Do you want your money now or later?" 

  • Reply 12 of 126
    richlorichlo Posts: 46member
    I dont think the words investor and resolve go hand in hand with Apple stock. If you look at where the stock is compared to about two years ago the market has priced in their feelings about the company and lack of new products.
    If a new product does appear I am sure the stock will reflect it.
  • Reply 13 of 126
    dasanman69dasanman69 Posts: 12,973member
    nkhm wrote: »
    I'm saying nothing of the sort.

    I'm saying that Apple Continue to innovate, and if you look at landmark products - iMac, iPod, iPhone, iPad we are far from 'overdue' the next big thing.  The next big thing will come, unfortunately analysts want a groundbreaking revolutionary product every six months.  That is a stupid expectation.

    My statement was that growth slows - it's inevitable.  That is neither a bad thing, nor an unusual thing.  Why read any more into the statement than my black and white text on the screen?

    Oh, and as regards "would that support the current stock price and valuation" - I don't care.  I don't think Apple really do either, as long as they're making profit and making great products and software. Stock price is completely irrelevant to that.

    It was 3 years between the iPhone, and iPad. We are now going on 4 years since the iPad. That's hardly every 6 months.
  • Reply 14 of 126

    Apple is about to launch a new product category that most likely will be incredibly popular. The employees, who obviously aren't allowed to talk about it, are very excited about it. This hand-wringing will go away soon. 

  • Reply 15 of 126
    slurpyslurpy Posts: 5,107member
    I'm sorry, where the **** is this "patience and resolve" form Wallstreet? If they had any "resolve" or "patience" the stock would be much higher than where is at now. Wallstreet has never been right throughout Apple's entire history. They can go **** themselves, a bunch of clowns. Apple will release the next big thing when its ready, not to pad some quarterly results, or please wallstreet "expectations".
  • Reply 16 of 126
    512ke512ke Posts: 781member

    I agree with Hopeless (sorry to double post so quickly).  Apple is going to prove it's still got the new category mojo magic this year.

     

    It just took a while, because it's a company of perfectionists who don't like to make a mistake, plus they are being JUDGED and SCRUTINIZED to an insane degree, and they got burned by the MAPS debacle/ridicule.

     

    But they will step up and swing for the fences at least, soon, in my opinion.

  • Reply 17 of 126
    rogifanrogifan Posts: 10,669member
    iMore.com has an interesting article about what Apple could do to spur growth. And the suggestion is for Apple to expand their hardware offerings in support of this whole "internet of things". I actually agree with a lot of it.

    http://www.imore.com/how-can-apple-excite-investor-beyond-today-s-boring-quarterly-report

    When Google bought Nest I heard a lot of people say that Apple wasn't going to build a thermostat but would provide the hooks into iOS for third parties. That's all well and good, but how much money does Apple make off that if anything? The Nest thermostat was very popular the Apple online and retail stores. I'm sure plenty of iOS uses forked over $250 for one of those devices. Rather than iOS users giving that money to Google, why not give it to Apple instead? Does anyone think Apple wouldn't be able to designs beautiful looking, functional device rear integrated well with iOS devices? Of course they could. And that's just one example.

    Licensing fees from 3rd party hardware accessories is certainly not exciting and I don't know how much that grows Apple's top and bottom line. I'm not suggesting Apple should start making refrigerators and dishwashers but I do think the internet of things is going to be huge and it would be a shame to see Apple completely leave the "things" part to others. With iPhone and iPad leveling off in terms of growth, Apple needs to look beyond them for their growth.
  • Reply 18 of 126
    rogifanrogifan Posts: 10,669member
    No-growth Microsoft has a PE ratio today of 14.68. Apple's is at 13.11 today. So, AAPL price is already presuming worse future results than Microsoft...
    But is Microsoft no-growth right now?
  • Reply 19 of 126
    nkhmnkhm Posts: 928member
    Quote:

    Originally Posted by dasanman69 View Post





    It was 3 years between the iPhone, and iPad. We are now going on 4 years since the iPad. That's hardly every 6 months.

    You are an argumentative one aren't you. Even to the extent of making up your own argument.  If you choose to timeline - look at the gap between the mac, iMac, iPod, Apple TV, iPad - and now we have the wearable on the way.  Products come when they're ready.  Analysts opinions of this are pointless.  Share price is irrelevant. Profit is relevant.  Apple seem to be doing just fine. 

     

    So carry on an argument with yourself, but the point I made (which you choose to ignore/misinterpret) is that slowing growth is inevitable. It's not a bad thing, not an unusual thing and not specific to Apple. 

  • Reply 20 of 126
    jungmarkjungmark Posts: 6,647member
    dasanman69 wrote: »
    It was 3 years between the iPhone, and iPad. We are now going on 4 years since the iPad. That's hardly every 6 months.

    And six between the iPod and iPhone. Point is you can't schedule innovation.

    Oh and F*** Wall Street.
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