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.
I have some inside information. Product is built and in finishing stages. I'm pumped.
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.
Part of the problem is Tim Cook tells investors that Apple will have new products across 2014 and then almost 5 months into the new year and nothing new has been announced other than CarPlay. Maybe what Cook needs to say instead is 'good things come to those who wait'. As long as Apple decides to go quite for 6-9 months at a time you're going to have Wall Street and their media pimps fretting about the state of Apple. Heck just yesterday that rag Business Insider ran a story saying it was time to question Tim Cook's management of Apple. Going quiet for several quarters at a time causes the narrative we're seeing now.
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?
That isn't what he sad at all. The problem with the investment community is the excessive focus on growth which often drives companies to do things not in their best interest. It is a factor in the crash of many industries including the PC industry. Growth is fine but it needs to be sustainable. If not you end up hitting a plateau and suddenly don't have the resources to sustain your business ( see: Dell, Gateway and a number of others). For the long run profitability is far more important than rapid growth.
The second problem is the assumption that Apple has no future product or industries in mind. Apple might not speak about them publicly but it is asinine to think that Apple doesn't have many thing going on R&D wise. Further they likely have their eye on players in other industries they can snap up.
In a nutshell the rejectable idea here is that there is nothing more to come from Apple. I see just the opposite, Apple is just getting started.
Isn't this about the best thing that could happen? The click-baiting 'Analyst' class, the short term investor and the general idiots with their heads in their posteriors get out of the stock, the price tanks and Apple buys much of it back at a discount. Then they proceed to execute just like they historically have, and for that and the no longer diluted stock pool reasons the value goes up, to the benefit of the long term investor with their head where it belongs. Alas, the losers at NCPPR will probably still be around trying to get attention.
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.
That's exactly what people and especially investors don't get. The iPad was a one-off exception to the rule, because it was largely based on the technology developed for the iPhone, whereas some people say that technology was originally meant for a tablet either way.
The thing is: Look at everything prior to the iPad and see how many years you got in between groundbreaking new product categories the likes of the iPhone or iPad. Many years. Apple does not operate the way other companies do and certainly not the way investors expect them to.
Comparing Apple with Microsoft doesn't really work, because Microsoft has never really been innovative as a company. They never introduced groundbreaking technologies. Despite certain correct hunches such as tablet computers and smartphones, the company always failed with their attempts because of poor execution and premature technology.
That's what Apple does different. I highly doubt Steve Jobs or Tim Cook sitting in their offices contemplating the stock price and making a plan on how to react to investor actions. That would only lead to crappy DOA products, which noone really wants or likes. Look at Google Glass, look at Galaxy Gear, look at Chrome dongles, look at Surface.
Those are the kinds of products you get when trying to pull something "magical" out of your backside, without having mature technology and proper execution in order to back those visions up. You got a list of many more or less failed products, all of which are supposed to have created a whole new product category. And exactly this is the problem with WS, they kind of expect Apple to throw out products Samsung style while at the same time expecting them to be more magical than the crap of competition.
Doesn't work like this. Apple is a highly iterative company, refining their flagship products over many years, with many useful and some small revolutionary features. Apple is also a dreamer and while they might have all those little and nice new product categories up their sleeve, they have learned one lesson, no one else seems to have learned: keep those ideas in your drawer and wait for the absolute right moment, when technology has really evolved enough to create a what many people call magical products, whereas the only thing really radical about them is how well executed they are.
And exactly this is the difference between tablet PCs as Bill Gates once showed them to the world and the iPad, which represents what Apple thought they should've looked like.
Slowing sales for both the iPhone and iPad are testing "investor resolve," Adam Satariano wrote in a piece for Bloomberg published Wednesday.
This is Wall Street Speak (tm) for "when a company is growing ultra-fast, idiotic suckers are drawn into the market that we can exploit."
The stock market is a zero-sum game, just like poker. Better to sit in a game with a bunch of clueless rich guys having fun throwing money around than in a game with a bunch of hungry sharks grinding out their rent money.
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.
I wasn't arguing, I was making a point. The time lines were getting shorter. People got accustomed to that. It's not illogical to expect something new by now. I don't agree but I understand.
Apple stock simply doesn't have much upside and won't get a higher multiple because it's growth is over. This doesn't mean it won't be making large profits its just that profits won't be growing to justify a market cap larger than the almost 500B already priced in today. In other words they have the largest market cap, by far, of any company and that is because they have huge profits. But that is all you get when you don't grow. One can't look for that market cap to grow (which means stock going up) without appreciable top and bottom line growth over 10% which Apple will no longer achieve.
I predict the new products won't see the huge success of iphone or ipad. They may do ok but won't move the needle. iPad will flatten out and see margin erosion from competition and lower sales. iPhone will have a huge 2014 boost and maybe 2015 as the mega upgrade to the very late large screen format takes hold. You'll get two more years of sales roughly where they have been in the last two years as iphone goes up but ipad goes down.
After the mega iphone upgrade cycle competition and lack of innovation on iphone along with no needle movers will mean a continued stagnant market cap. Apple will make lots of money but won't do much with it.
If you buy the stock do it for the safe 2.3% dividend but don't expect any moves near 600/share ever again. The only way that happens is if Cook listens to Icahn and buys back 1/3 or more of the float and I just don't see Cook being that smart.
Investors don't care about Apple and their products. They care about their dividends and how much they can make on speculating on Apple's stock price.
Steve Jobs at least publicly, didn't care about appeasing investors -- that was not his focus. Tim Cook unfortunately did not continue that Apple tradition. I think it was a mistake.
That isn't what he sad at all. The problem with the investment community is the excessive focus on growth which often drives companies to do things not in their best interest. It is a factor in the crash of many industries including the PC industry. Growth is fine but it needs to be sustainable. If not you end up hitting a plateau and suddenly don't have the resources to sustain your business ( see: Dell, Gateway and a number of others). For the long run profitability is far more important than rapid growth.
The second problem is the assumption that Apple has no future product or industries in mind. Apple might not speak about them publicly but it is asinine to think that Apple doesn't have many thing going on R&D wise. Further they likely have their eye on players in other industries they can snap up.
In a nutshell the rejectable idea here is that there is nothing more to come from Apple. I see just the opposite, Apple is just getting started.
Ok well I certainly am not suggesting now nor ever have suggested that there is nothing more to come from Apple. But I'm not surprised at the Wall Street sentiment considering Apple has has several quarters of little to no growth and flat to declining profits. And throw in the fact they basically go quiet for 6-9 months now and this is why we have the media memes and sentiment we do. If Apple isn't going to fill the vacuum others will.
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.
None of which make sense as far as growth is concerned. The Galaxy Gear sold under 1m units and is priced at ~$150 and they had to bundle units with the Galaxy Note. If their margins are 70% on the watch, how is ~$100m in a quarter going to affect Apple's ~$13,000m? They either have to make a more compelling digital watch or a watch that could sustain a very high asking price but then it ships in very low volumes.
On the TV side, a $999 TV set can boost profits noticeably if they manage to take 10-15% of the market like Sony but the TV box route would be more profitable if they adequately monetize users as it has a faster upgrade cycle. But this takes time and they are already doing this.
If investors are looking for unit growth, Apple just needs to hit a button and make a cheaper iPhone but it might lower their profits. You don't just get profit growth by throwing everything at the wall and see what sticks because you aren't creating value:
"Samsung Electronics, the world's biggest maker of TVs and mobile phones, has forecast a drop in profit for the second quarter in a row.
It expects to make an operating profit of 8.4 trillion won ($7.9bn; £4.8bn) for the January-to-March quarter, down 4% from the same period last year.
This follows a 6% decline in operating profit in the previous quarter."
The problem with the stock is that although Apple is hitting record sales time and time again, there's a perception problem. Phil Schiller rightly said, this is a marketing problem. I think it's part of the cycle that people go through where they don't like to see the same winner all the time. It would be no fun if Superman kicked everyone's ass all the time. They have to add in the Kryptonite and the element of potential defeat only for things to turn around and have a happy ending. It happened with Microsoft first, everyone wanted Microsoft to win and now nobody gives a sh*t about them because they had their turn and it became time for Apple. People wanted Samsung to be next but Samsung has shown their hand as imitators too soon and people are bored with them. It could have been HTC next if they'd focus properly but the whole excitement in the smartphone market is dying down because so many people have them. There's no drama any more. The companies involved will just keep riding it out.
I think the iPad especially would have a larger growth boost if they'd put tactile feedback on it. That would be great for kids interacting with it if they did it right.
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.
Do you have any experience in the finance industry? Delisting would be suicide at this point.
Apple has become painfully predictable and stuck in slow motion innovation-wise. The media and Wall Street are correct! Tim Cook has put Apple in position where Cupertino now needs to prove it still possesses "fire in its belly".
?My radar leads me to conclude the iWatch is imminent. That may move the needle! A larger iPhone will plug the dyke but I think it's too late to be significant becauseeveryone expects it. By making Apple TV a hobby for way too long I fear Apple has blown that opportunity too! There are people in denial here but the fact remains, compared to what Apple was in 2007-2011, the company is a bloody mess.
Comments
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.
I have some inside information. Product is built and in finishing stages. I'm pumped.
Cue the usual, completely unfounded blather: "Wall-Street-is-a-gambling-den," "analysts-are-stupid-venal-low-lifes," "everyone-manipulates-stock-prices," "last-year's-profits-should-tell-us-all-we-need-to-know-about-this-year's-stock-prices," "Apple-should-go-private," "Time-Cook-should-stay/go," "Apple-does/does-not-innovate".
Am I missing anything?
I'm ready.
If AAPL drops later today, I will be picking up a few shares.
My finger will be on the trigger beginning at 4 PM.
The most rhetorical question in the world:
"Do you want your money now or later?"
Why is that rhetorical? Depends on the expected return associated with waiting, no?
The employees, who obviously aren't allowed to talk about it, are very excited about it.
And, you know this how?
That isn't what he sad at all. The problem with the investment community is the excessive focus on growth which often drives companies to do things not in their best interest. It is a factor in the crash of many industries including the PC industry. Growth is fine but it needs to be sustainable. If not you end up hitting a plateau and suddenly don't have the resources to sustain your business ( see: Dell, Gateway and a number of others). For the long run profitability is far more important than rapid growth.
The second problem is the assumption that Apple has no future product or industries in mind. Apple might not speak about them publicly but it is asinine to think that Apple doesn't have many thing going on R&D wise. Further they likely have their eye on players in other industries they can snap up.
In a nutshell the rejectable idea here is that there is nothing more to come from Apple. I see just the opposite, Apple is just getting started.
Then they proceed to execute just like they historically have, and for that and the no longer diluted stock pool reasons the value goes up, to the benefit of the long term investor with their head where it belongs.
Alas, the losers at NCPPR will probably still be around trying to get attention.
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.
That's exactly what people and especially investors don't get. The iPad was a one-off exception to the rule, because it was largely based on the technology developed for the iPhone, whereas some people say that technology was originally meant for a tablet either way.
The thing is: Look at everything prior to the iPad and see how many years you got in between groundbreaking new product categories the likes of the iPhone or iPad. Many years. Apple does not operate the way other companies do and certainly not the way investors expect them to.
Comparing Apple with Microsoft doesn't really work, because Microsoft has never really been innovative as a company. They never introduced groundbreaking technologies. Despite certain correct hunches such as tablet computers and smartphones, the company always failed with their attempts because of poor execution and premature technology.
That's what Apple does different. I highly doubt Steve Jobs or Tim Cook sitting in their offices contemplating the stock price and making a plan on how to react to investor actions. That would only lead to crappy DOA products, which noone really wants or likes. Look at Google Glass, look at Galaxy Gear, look at Chrome dongles, look at Surface.
Those are the kinds of products you get when trying to pull something "magical" out of your backside, without having mature technology and proper execution in order to back those visions up. You got a list of many more or less failed products, all of which are supposed to have created a whole new product category. And exactly this is the problem with WS, they kind of expect Apple to throw out products Samsung style while at the same time expecting them to be more magical than the crap of competition.
Doesn't work like this. Apple is a highly iterative company, refining their flagship products over many years, with many useful and some small revolutionary features. Apple is also a dreamer and while they might have all those little and nice new product categories up their sleeve, they have learned one lesson, no one else seems to have learned: keep those ideas in your drawer and wait for the absolute right moment, when technology has really evolved enough to create a what many people call magical products, whereas the only thing really radical about them is how well executed they are.
And exactly this is the difference between tablet PCs as Bill Gates once showed them to the world and the iPad, which represents what Apple thought they should've looked like.
Slowing sales for both the iPhone and iPad are testing "investor resolve," Adam Satariano wrote in a piece for Bloomberg published Wednesday.
This is Wall Street Speak (tm) for "when a company is growing ultra-fast, idiotic suckers are drawn into the market that we can exploit."
The stock market is a zero-sum game, just like poker. Better to sit in a game with a bunch of clueless rich guys having fun throwing money around than in a game with a bunch of hungry sharks grinding out their rent money.
If Steve Jobs were alive this wouldn't be an issue...
And oh yes, Tim Cook should be fired!
/s
I wasn't arguing, I was making a point. The time lines were getting shorter. People got accustomed to that. It's not illogical to expect something new by now. I don't agree but I understand.
Apple stock simply doesn't have much upside and won't get a higher multiple because it's growth is over. This doesn't mean it won't be making large profits its just that profits won't be growing to justify a market cap larger than the almost 500B already priced in today. In other words they have the largest market cap, by far, of any company and that is because they have huge profits. But that is all you get when you don't grow. One can't look for that market cap to grow (which means stock going up) without appreciable top and bottom line growth over 10% which Apple will no longer achieve.
I predict the new products won't see the huge success of iphone or ipad. They may do ok but won't move the needle. iPad will flatten out and see margin erosion from competition and lower sales. iPhone will have a huge 2014 boost and maybe 2015 as the mega upgrade to the very late large screen format takes hold. You'll get two more years of sales roughly where they have been in the last two years as iphone goes up but ipad goes down.
After the mega iphone upgrade cycle competition and lack of innovation on iphone along with no needle movers will mean a continued stagnant market cap. Apple will make lots of money but won't do much with it.
If you buy the stock do it for the safe 2.3% dividend but don't expect any moves near 600/share ever again. The only way that happens is if Cook listens to Icahn and buys back 1/3 or more of the float and I just don't see Cook being that smart.
Steve Jobs at least publicly, didn't care about appeasing investors -- that was not his focus. Tim Cook unfortunately did not continue that Apple tradition. I think it was a mistake.
If you buy the stock do it for the safe 2.3% dividend but don't expect any moves near 600/share ever again.
I disagree. I don't give a crap about the dividend.
I also believe that AAPL will be much higher eventually, though exactly when is impossible to predict of course.
None of which make sense as far as growth is concerned. The Galaxy Gear sold under 1m units and is priced at ~$150 and they had to bundle units with the Galaxy Note. If their margins are 70% on the watch, how is ~$100m in a quarter going to affect Apple's ~$13,000m? They either have to make a more compelling digital watch or a watch that could sustain a very high asking price but then it ships in very low volumes.
On the TV side, a $999 TV set can boost profits noticeably if they manage to take 10-15% of the market like Sony but the TV box route would be more profitable if they adequately monetize users as it has a faster upgrade cycle. But this takes time and they are already doing this.
If investors are looking for unit growth, Apple just needs to hit a button and make a cheaper iPhone but it might lower their profits. You don't just get profit growth by throwing everything at the wall and see what sticks because you aren't creating value:
http://www.bbc.com/news/business-26933449
"Samsung Electronics, the world's biggest maker of TVs and mobile phones, has forecast a drop in profit for the second quarter in a row.
It expects to make an operating profit of 8.4 trillion won ($7.9bn; £4.8bn) for the January-to-March quarter, down 4% from the same period last year.
This follows a 6% decline in operating profit in the previous quarter."
The problem with the stock is that although Apple is hitting record sales time and time again, there's a perception problem. Phil Schiller rightly said, this is a marketing problem. I think it's part of the cycle that people go through where they don't like to see the same winner all the time. It would be no fun if Superman kicked everyone's ass all the time. They have to add in the Kryptonite and the element of potential defeat only for things to turn around and have a happy ending. It happened with Microsoft first, everyone wanted Microsoft to win and now nobody gives a sh*t about them because they had their turn and it became time for Apple. People wanted Samsung to be next but Samsung has shown their hand as imitators too soon and people are bored with them. It could have been HTC next if they'd focus properly but the whole excitement in the smartphone market is dying down because so many people have them. There's no drama any more. The companies involved will just keep riding it out.
I think the iPad especially would have a larger growth boost if they'd put tactile feedback on it. That would be great for kids interacting with it if they did it right.
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.
Do you have any experience in the finance industry? Delisting would be suicide at this point.
Apple has become painfully predictable and stuck in slow motion innovation-wise. The media and Wall Street are correct! Tim Cook has put Apple in position where Cupertino now needs to prove it still possesses "fire in its belly".
?My radar leads me to conclude the iWatch is imminent. That may move the needle! A larger iPhone will plug the dyke but I think it's too late to be significant because everyone expects it. By making Apple TV a hobby for way too long I fear Apple has blown that opportunity too! There are people in denial here but the fact remains, compared to what Apple was in 2007-2011, the company is a bloody mess.